ARB and the LADWP have funded a preliminary investigation into the feasibility of using electric-drive vehicles (EDVs) as distributed sources of electric power and regulation services to the California electric grid. The project team has concluded that electric-drive vehicles can become an important resource for the California electric utility system, and that their use would provide emissions, system reliability, and economic benefits.  The economic value of these benefits shows the potential to offset the initially higher costs of electric-drive vehicles and may make the net cost of purchasing and operating EDVs lower than that of conventional gasoline vehicles.  The project team concluded that the cost of electricity from EDVs is too high to be competitive for baseload power, but that EDVs may prove to be competitive in three other markets: peak power, spinning reserves, and grid regulation.