LED lighting and more efficient cooling systems have caused Electric Utilities to experience a drop in the sales growth of their core product: electricity. Therefore, utility companies are looking to grow their market share in the transportation sector. That said, EV customers are quickly learning that the cost for electrical energy can vary based on when and how fast they charge their vehicles. The uncertainty in the cost for keeping EVs fueled could negatively impact market penetration, and therefore utilities are seeking new rate tariffs that create incentives for consumers to purchase EV and charge them at off peak times. Fleet managers can use smart charge control systems to save money on EV charging.
Basic Tariff Options
There are two basic rate tariffs that are common across most utilities – Standard Rate and Time of Use (“TOU”) Rate. Standard rates offer a consistent price per kilowatt-hour (“kWh”), and work well for users that want to lock-in a price no matter when energy is consumed. As the name suggests, TOU rates vary the price per kWh based on when energy is used. For both tariffs there will also be a peak demand charge which is a charge based on the highest amount of power used during a set period. In other words, part of the bill is based on how much energy over the billing period (kWh) and part is based on the maximum instantaneous power (kW). Peak demand can increase utility costs throughout the year as rates often include a base charge billed for 12 months after the peak is set.
Time of Use electric utility rate tariffs offer lower costs for electricity consumed at “Off-Peak” times and higher costs for usage during “Peak” times. The timing for these periods varies by utility and tariff, but Peak times often occur during week-day afternoons. It’s common for utilities have summer peak rates that differ from their winter rates. No matter what the specifics, TOU rates are intended to encourage users to reduce usage at times when the Utility’s cost for energy is high by shifting consumption to lower cost periods. Unfortunately, for customer’s whose largest load is either production processes or cooling, it’s difficult to profit from TOU rates without impacting either production or occupant comfort. Fortunately, for EV fleet operators moving charging to off peak hours can be accomplished with less risk of customer impact.
EV Tariffs are coming!
Two proposed residential electrical tariffs by PGE and SCE are focused on EV charging and intended to make it attractive for users to shift their EV charging to off peak hours. Both offer significantly lower off-peak pricing. The graph below shows a residential rate from PGE. It is not to scale as the summer peak price is 385% higher than the off peak price ($0.51832 vs $0.13452). Assuming a 50 kWh charge, that’s a savings of $19 per day!
PGE didn’t become a multi-billion dollar outfit accidentally so don’t think that they’re giving anything away. To get this rate, owners need to put their entire home on this rate to achieve those savings. As that includes cooling loads, those summer-time savings can turn into tremendous penalties. However, they also offer discounted rates for residents that have a dedicated EV power meter. The interesting thing about both the PGE and SCE tariffs is that neither includes a peak electrical demand charge.
The above applies to residential rates, but similar ideas are being discussed for commercial EVs. For fleets, a smart charge control systems save money. Our EV charge control system, EVauto®, was developed to deliver easy to use controls to Fleet Managers. The system includes tools that allow fleet operators to minimize the cost of charging their fleet. It accomplishes this in 3 ways: 1) Spreading out the time when vehicles charge to reduce demand charges, 2) Shifting charging to lower cost times of day to take advantage of TOU Rates, and 3) allowing fleets to participate in automatic demand response programs.
In a future posts, I’ll discuss ideas for commercial / fleet EV tariffs.