Electric Vehicle Charging Rates

With respect to charging electric vehicles (EVs), the ideal scenario would result in a maximum amount of renewable energy flowing into the vehicle’s battery packs while at the same time utilizing our existing infrastructure (power plants, transmission/distribution lines) as efficiently as possible.   To meet this scenario, the timing of charging up vehicles must be compared to the timing of power plants supplying that electricity to the grid.  

Most utilities want EV charging to occur at off-peak times so that they don’t have to build new infrastructure to meet this new electric load.  This makes perfect sense from an efficiency perspective.  To accomplish this, some utilities are providing very low EV charging rates for consumers and in this way they hope to drive EV charging toward times when there is plenty of power plant capacity available on their system. 

If the concern is primarily on the issue of greenhouse gas (GHG) emission reductions, a more sophisticated analysis will be necessary in order to determine the best times of day for EV charging.  Depending on the utility, charging EVs at off-peak times might be worse from a GHG perspective because there might be more coal fired power at off-peak times than simply letting people charge throughout the day and night.  The time of year will also show some variations in what power is being supplied to the grid – it may be that in the winter, we want EV charging to occur off peak, but in Summer we would want daytime charging to occur. 

Assuming that off-peak is where we want to drive EV owners to charge their vehicles, Pacific Gas & Electric Company (PG&E) and other utilities offer a rate to their customers that is constructed to entice people to charge their EVs at off-peak times when power is most available. By charging batteries during off-peak hours, EV owners minimize their energy bills and also make more efficient use of utility power plants, which in turn can reduce the average cost of electricity for all customers. 

PG&E’s Time-of-Use (TOU) Low Emission Vehicle rate is known as the "E-9 rate" (Schedule E-9). The E-9 rate is mandatory for those customers that are currently on a residential electric rate and who plan on refueling an EV on their premises. The rate is as low as 5 cents/kWh and as high as 28 cents/kWh depending on the time of day, day of the week and time of year. The E-9 rate has two basic options, metering the whole house (option E9A) or just the EV charger (option E9B).

E-9 EV Charging Rate Schedule

At this point, with limited information on how well this rate structure works in terms of getting EV owners to charge at off-peak times, we will note our concern that the peak pricing may be still too low to impact behavior.  This is especially true when many of those purchasing EVs in the early years will have the financial means to afford even these relatively high, on-peak electricity prices.  With a 40-mile all-electric range, a PHEV40 will require about 2,500 kWhs per year. At peak prices of the E-9 rate, that is $700/yr, equivalent to 233 gallons of gas at $3.00/gallon, representing 8,000 miles of travel at 35 mpg.  Therefore the EV owner charging at PG&E’s peak times is still saving money compared to a highly efficiency gasoline car if they typically travel more than 8,000 miles per year.

Certainly, with the correct pricing signals and policy design, EV charging rates will be useful in controlling consumer behavior.

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