The Value Idling in Electric Vehicles — Episode 182 of Local Energy Rules

When we define that the best way to come up with a transactive energy business model that people could relate to was to use pricing signals. So if you wanna transact you would respond to a price and that’s where the rate came about. So back in 2017 when that was put together, we started to really kind of define what that looked like. It took us a couple years to figure that out. And then in 2019, 2020, we really started to focus on defining what those pricing signals were and we highlighted a basically a hundred percent avoid cost rate. So the utility stacks up all of its costs and puts them into e every single hour of the year and shows that price to the member. And if you know, the Farrell family sees that you’re a member of the co-op and you see that price and you have a device that can respond to that price to take advantage of it, then the co-op will record that information, record that usage and collect it for you over the period of a month, which is the bill, and then return it to you on your bill with a single line item. So I stated a lot there John, and there might be some questions you had in there, but hopefully that was clear.

So let’s see if we use an example, let’s use your car cuz we wanted to talk about vehicle to grid. So if your car was on the system, it would respond and send basically a file every day to our server and that file has the usage of your vehicle, whether it was either using energy or discharging energy in the proper format. Our application would then send that usage information that we get every day. It sends us, sends it directly to our billing system and more specifically it sends it to our meter data management system. So it looks like a meter. And once it looks like a meter we can do all kinds of things with it on our bill. So one of the unique aspects of this, and I don’t know that this is going to be unique for all that long, I know California is allowing this as well. The meter itself is the car, so there’s not a specific meter associated with it. So the car is talking to the internet and sending in files to our, we call it our TER application, but it’s our cloud application and those look like meter reeds.

So what that means is they, they have tested already with us, can they send us these open ADR reports and we’ve been successful there. So the important part in that arrangement is the cooperative isn’t telling the car to do anything. General Motors is. So General Motors is reading the prices every day, pulling it into their application and then sending a charging schedule down to all those GM bolts that have signed up. And General Motors has signed those up for the benefit of our members. So they would’ve contacted the member and said, Hey there’s this great program at the co-op if you want to help get your charging costs down, we think we can help you do that, go ahead and sign up. And then once that happens, we now see that car because General Motors is now sending us the reports. And then once we see that car, we know who that car belongs to because it’s been associated with one of the accounts in our system, it then can go directly to that member’s bill.

I hope that gives you a path of how the data gets from the car to the, we call it an aggregator. So General Motors would be the aggregator in this aspect and then to the co-ops systems. Now there’s another way to do that. There’s this company called Fermata Energy, they’ve also integrated with us. They have a vehicle to grid bidirectional charger which works with a Nissan Leaf. So you can buy one of those and then sign up with Ramada Energy and say, Hey I want, if you were in our service territory, I want you to go ahead and maximize or optimize my benefit on behalf of myself using the rate that the co-op is providing. And then they would, they would send instead to the car and that aspect, they’re gonna send it to their charger, their charger will say whether it’s to charge or discharge that vehicle. So those are two different ways to do the same thing, but they both get you a similar result.

So since July we have been seeing how that car will charge and discharge based on the signals that we’re sending every day. And in that example that’s using the Fermata Energy charger. So Fermata Energy is actually giving the commands to the charger and then if car is plugged in, then it’ll follow those commands. If it’s not plugged in, then, it obviously can’t, right? Because there’s, there’s nothing telling it what to do. But what’s nice about that is when a state doesn’t have to make those decisions on a day-to-day basis, they’re not waking up every day and having their cup of coffee and trying to figure out what they should do with their car. So most people buy cars to transport themselves, not necessarily to take advantage of a transactive energy rate.

So we’ve been able to test out what does that value look like because everything was theory before. And what we did is we backcast, you know, hey, what if we were running this rate back in 2018 all the way up through 2022, what would it have looked like? And when we did that, we came up with some averages and we said, well if you were trying to optimize value, you could see up to $4,000 a year for each car that’s per car. That’s, that is a lot of value. I mean that really changes the way a family would think about a car. You know, your car is getting you from A to B that does that very, very well. And what cars don’t usually do is keep money in your pocket all that well, right? There’s all kinds of things associated with cost when it comes to a car, which is fair, it’s doing transportation, but you’ve got fuel costs, you’ve got insurance costs, you’ve gotta pay for the car itself, you’ve gotta budget for maintenance. So there’s a lot of expenses that are associated with that.

If there’s an opportunity to provide needed services to your local distribution cooperative and you can pay for those services what they’re worth, you’re now taking a vehicle that you’ve invest, which is a big investment, separate of it, second to probably your home, it’s your biggest investment, maybe your education and now you’re adding some benefit to that monthly budget for that family. So we were kind of excited about that cuz that seems like that’s going to really provide a new benefit to our members. And so when we backcast that, that was all theory and, and we were able to test it since July and those numbers are proving out to be about right. I mean we had, I think in the first 45 days we were able to see a little over $850 I think of benefit by discharging at the right.

And one of the questions I think you were kind of alluding to John is that it’s like, well, I mean that’s all well good, but you do want to, you do want to take a trip to the Sea coast once in a while or you want to go somewhere with that car. You don’t wanna necessarily just be waiting around for the right time to charge or discharge the transactive energy rate or the day ahead rate that we’re putting out there for our members. There’s, I don’t know, I’d say around 300 hours per year that you’re going to see some dramatic price increases. And when you see those price increases, you either want to one or two things. You either want to discharge your car or you want to not charge your car because then you can save from those high priced hours. I mean there’s 8,760 hours in a year. I didn’t do the math, but I think we’re around two, two and a half percent or so of that is about how much time that you would be using. And usually those hours are in the evening just about when you get home. If you were, you know, working on a nine to five shift when you get home, there might be a time to go ahead and discharge your car.

Now when it comes to if I discharge my car, will I be able to go anywhere, the way it’s been explained to me so that – this is not what the co-op is doing. You know, this is what the auto manufacturers would do. They will say, Hey, there are user parameters for everybody’s vehicle. So for the Farrell family you might say, look, I always want to have enough mileage to get to the hospital and back. So if you wanna make sure you can get and say you’re, you’re not in Minneapolis, but you’re not in the outskirts of that and it takes you 15 miles to get there. So you always wanna leave 30 miles in your car no matter what. And then you might also have other restrictions on that saying, I need to be at work by eight o’clock. I wanna make sure that I always have another 20 miles or something in the car at eight o’clock every day. So now you, you’ve added another restriction on what you can do with charging and discharging of that car so that you now have 50 miles at seven o’clock cause you gotta get there, right? So 7:30, so you the whoever is going to be your aggregator we’ll say it’s General Motors or maybe it’s from Auto Energy is looking at it. They will make sure that the status of your battery will always allow you to meet those parameters that you’ve put in there. So you’re never left without enough energy to what you have stated you always want to have.

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There are ways, I’m not gonna say that we have the only way to do it, there’s lots of other ways to do it, but I think we have a way that it can help provide that energy for anything that can provide stored energy. So that could be a standalone battery or that could just be shifting your overall loads in your house. But from the car’s perspective, the auto manufacturers, their business model there is, you know, they’re, they’re helping provide that asset which is a very big purchase for our family, provide new value, new things to that family which may make them more interested in buying that particular car. So the auto manufacturer’s selling a car, that’s their primary business and this is another revenue stream or another thing you can do with that asset that they can take advantage of and it might just be a tipping point for somebody. The other part to that is they’re providing additional services for you. So when I talked about in order to take advantage of this rate, you really need to schedule your vehicle. Most families probably won’t wanna do that. I mean if you think about trying to get the kids to school and get ’em on the bus, get ’em fed and making sure they got their backpack and everything’s ready to go, that’s a busy morning and, and you don’t wanna have your laptop open also scheduling your car for the day…

So we really wanted the ability of just using an individual device so that it was controllable for the member. I had this example that way I would use from a teenager. So if you went home, if you took off for the weekend and your teenagers had a great big party at your house and they were using all types of energy, it happened to be one of those events, you had a poor experience because your whole house was on that. It’s most likely if you had, even if you did go out for the weekend and your, your teenagers had a big party at your house, they probably didn’t go and change the schedule on your standalone battery or go and change the schedule on your, your vehicle that was in the garage.

So you were still kind of held harmless from that, right? That activity that you couldn’t control, you kind of think of the device as like a submeter in the home. So all of the energy that’s either used or discharged or or produced from that device is backed out of the main meter. Yeah, we call it reconstituted but it’s, it’s, it’s set up so that you’re not paying twice for energy that’s being used in the car and you’re not getting double credit because you’ve discharged your car and you’re also feeding into the grid at the same time. That part was not that easy. That’s why I mentioned that John, is that we wanted to make sure that the member that was using that device on the transactive energy rate was really just using it on that rate. Everything else was on their, their other rate, which would be a flat rate.

My last question about the rate then comes in from my experience dealing a lot with distributed solar and with net metering, which is people will talk about net metering. Let’s just say that the conversation is very fraught between utilities and regulators and solar companies and solar customers about is this rate a good measure of the value of the energy that’s being given to the grid? There’s a lot of weeds about net metering alone about how often do you net and, and all that kind of stuff. But one of the points of general agreement is that at some point net metering as a flat fixed rate to transact with the utility, if you will, for like, for like a solar project becomes less representative the more solar projects are on the grid, especially if they’re all configured in the same way. They’re all like south facing and just trying to maximize kilowatt hour output. And so maybe that was a way longer setup than I needed for this question, but is that rate likely to change as more people participate and, and if so, how?

So if you’re trying to send a signal to folks and say, hey, pricing during these particular hours of the day are really high because the system is kind of stressed a little bit, there’s a lot of energy being used on the distribution lines and the transmission lines and if we could reduce the amount of energy that’s going through those lines, it would be less costly and we can keep the system we have for much longer so we don’t have to build new lines and we don’t have to build new substations or things like that. And so by sending that signal that during those particular hours, the costs are quite high, you would wanna see folks start to use the energy at different periods of the day, like maybe when the costs were quite low at two in the morning or something if they, if they were able to do that.

And that’s good because now you’re moving energy use to times of the day where there’s no concerns on the stress of the system. There’s plenty of capacity. The lines have plenty of room, you know, the pipes are only an eighth full, you know, instead of three quarters full. So you’re, you’re shifting energy to those hours, which gives your system kind of longevity. You don’t have to continue to build it out and build it out. So if you were to be able to do that perfectly, you would shift all those high cost hours over to those low cost hours and now you’re serving the same amount of energy every hour of the day. And then if that was the case, then the prices would be the same every hour of the day because you’re serving the same amount of energy and you’re using the same system for that and everybody’s super happy. But in reality that just won’t ever happen. So yes, you could start to see some equilibrium with the prices, but the systems are so big that the amount of energy that’s being used in those high cost hours and the next 20 to 50 years if, if everybody was sending very strong price signals, we don’t see that it’s, it’s going to change it. So those low cost hours don’t become low cost hours anymore.

So it’s not a perfect solution, but it does help maybe extend a little bit of time before you have to do an upgrade. So we do have it in there, we just don’t have it valued yet. One of the things that we have been talking about around this is we worked really, really hard to make this, the application that we have out there in the, in the cloud, the communications protocols that are there and then also the connection to our billing system. We try to keep that all super easy. So if there’s another cooperative that’s out there, it’s easier with cooperatives because we all kind of, most of us use the same billing system. So this application is already connected to our billing system, but we really wanna make sure that folks are aware that if like, hey, if you guys want to do something similar to this, you don’t have to go near what we went through to pull it together. We can we’ll share it with you.

I mean I think that’s cooperative number, principle number seven, right? You cooperate among cooperatives and we wanna do that and we kept things as open source as we possibly could. I mean not everything can just be free, right? We had to develop some applications that they would have to modify on their own so they’d have to hire somebody and make it work or do it internally. But for the most part it’s not that difficult. Like if you think about the client server relationship, the server is the TER application. The client would be your device, right? But in order for that device to talk to it, you have to be, you have to have this thing called a virtual end node, which is open ADR speak, right? We created AVE and we’ll give it to people and say, hey, if you want to connect to our system, here’s AVE that you can use to do that. And in order to test to see if it would work, one of our employees took that Ven and attached it to their water heater and was starting to deliver meter reads, right? Quotes, meter reads to our application in a day. And they’re not like some programming wiz, they are technically adept, right? Cuz they’re even trying to do this right? <laugh>. So there’s that, those types of people out there. But I wanted to just make sure that you were aware that we try, we did, we really worked hard to try to make it easily transferrable.

Well that’s out there and I think that’s been in place for multiple years now. I think four or five years maybe. I have seen stories as well as electric buses. As more electric buses are coming into the system. There are some demonstration projects that are out there for helping to use those buses for vehicle to grid. And we’ve talked with some companies about that as well that are having some projects that are around the country that they’re doing. And an electric school bus is a great example, right? It’s a much bigger battery and it’s used at a finite amount of time every day. So it’s very schedulable. And sometimes in the summer when you have capacity concerns, there’s hopefully no school going on depending where you are. And you can use those buses for rather than transportation, you can use them to help provide services to the grid. So I think there are some examples out there that projects like these are starting to take off.