Californians will soon have a few more electric vehicle options to choose from. Ford has started shipping the electric Focus to dealers in California, New York and New Jersey this week. And California EV maker Tesla announced last week that its Model S will soon roll off the assembly line, earlier than previously announced. For those who snag an early Model S, a Focus Electric, or any other plug-in EV, charging up at home will impact their electricity bill. And for EV drivers who live in California, choosing the right electricity rate plan can mean the difference of up to $1,000 a year in fuel-cost savings.
In our State of Charge analysis, we found that driving an EV is cheaper than driving an average compact gasoline vehicle regardless of your electricity rate plan. But choosing the right plan is important for maximizing the fuel-cost savings from going electric.
In no place is choosing the right utility rate plan more important than in California.
The standard residential rate plans for most utility customers in California includes tiered pricing, meaning the price of the electricity changes as a function of how much is consumed. For example, a consumer may pay 10 cents/kWh (kilowatt hours (kWh) is the standard unit of measurement for billing electricity) for the first 300 kWh per month and 15 cents/kWh for electricity consumed beyond the 300 kWh threshold. So an increase in a home’s electricity consumption that pushes it into the next tier, say from plugging in an EV, will be charged at a higher rate.
In our analysis, we found that this has a profound impact on fuel-cost savings of EVs. In Oakland for example, we estimated the savings to be only about $50 a year compared to paying $3.50 per gallon of gasoline because vehicle charging would occur at the higher tier rates.
However, utilities in California offer rate plans which can lead to much greater fuel-cost savings for EV owners. Under time-of-use (TOU) plans, electricity prices are lower during off-peak times, typically overnight, when EV owners are most likely to charge up at home. While TOU plans are designed to relieve pressure on the electricity grid with rates that are higher during hours of peak electricity demand, they can offer big savings to EV owners. We found that by switching to one of these rate plans, an EV owner could increase their annual fuel.cost savings to more than $1,000 per year in some California cities. (See table of fuel-cost savings below.)
|
City |
Utility |
Annual Savings Compared with a 27 mpg Gasoline Vehicle ($/year) |
||
|
Standard Rate Plan |
Time-Of-Use Rate Plan: Whole House |
Time-Of-Use Rate Plan: EV Only |
||
| Fresno | Pacific Gas and Electric Company |
$250 |
$650 |
$1,190 |
| Long Beach | Southern California Edison |
$150 |
$690 |
$930 |
| Los Angeles | Los Angeles Department of Water and Power |
$840 |
$1,030 |
$1,030 |
| Oakland | Pacific Gas and Electric Company |
$50 |
$500 |
$1,120 |
| Sacramento | Sacramento Municipal Utility District |
$840 |
$1,070 |
$1,070 |
| San Diego | San Diego Gas and Electric |
$330 |
$850 |
$840 |
| San Francisco | Pacific Gas and Electric Company |
$130 |
$560 |
$1,140 |
| San Jose | Pacific Gas and Electric Company |
$170 |
$590 |
$1,170 |
Time-of-use rates offer the greatest potential savings, but a word of caution
Before switching to these TOU rates, however, it’s important to consider both when you will charge your EV and what rate plan you will use for the rest of your house.
Our analysis assumes that over 75 percent of charging occurs during off-peak hours, which is consistent with when most EV charging is happening today. However, if you expect to frequently need to charge your vehicle during the day, a TOU rate plan may not be for you.
There are typically two ways for a consumer to access TOU rates: switching your whole house to a TOU rate or metering your EV separately on a TOU rate and keeping your house on the current plan.
The easiest route is to switch all the electricity used in your house and for charging your car onto the TOU rate, as it does not require a second electricity meter. However, this means that the electricity you use for your air conditioning, refrigerator and anything else in your house will cost more to operate during peak hours (typically during the day) and be less costly in the middle of the night.
The second option is to meter your EV separately from your house, allowing you to opt for a TOU rate for your car and keeping your house on a standard rate plan. We found that the annual savings on electricity costs were greater for Pacific Gas and Electric (PG&E) customers by using a separate meter. A second utility meter may be prohibitively costly to install however. PG&E will install the second meter for a fee of $250, but they also note on their website (see “more information”) that a second electric panel must be installed with the meter and may cost $2,000 to $10,000,though it is unclear where the range of cost estimates comes from.
Separately metering your EV can be also be achieved by installing a sub-meter. A sub-meter is a meter installed between the main utility meter and the EV and only measures the electricity that is used to charge the vehicle. At billing time, the amount of electricity measured by the sub-meter can be subtracted from your main meter, allowing separate billing for your household electricity consumption and your EV consumption. Sub-meters can be less costly than installing a second utility meter, but most CA utility customers don’t have this as an option (including PG&E customers).
EV ownership could be made simpler and more cost-effective by enabling the use of sub-meters more widely. This would eliminate uncertainty about impacts to your household electric bill from EV charging and lets you know for sure just how much you’re paying to fill up. It could also help utilities manage the electricity demand of electric vehicles as their numbers grow by enabling unique rate plans that encourage EV owners to charge at times that are best for the electricity grid.
The California Public Utilities Commission is currently in the process of developing a protocol for sub-metering EVs along with utilities and other stakeholders. The outcome of this process is important for determining what choices EV owners will have when charging their vehicles at home and ultimately, how much one can save on fueling costs by switching from gasoline to electricity.
What rate plan did you choose for your EV?
Are you an EV owner? Share with us your experience with EV charging and the rate plan you have chosen for your EV. Are you on a TOU rate plan? Do you separately meter your EV or is your whole house on a TOU rate? We’d love to hear from you about your EV charging experience.