Utility Rates for EVs

[Dave EV]

I was comparing the whole house EV rate to the separate EV rate that requires an extra meter.

So was I. Was I not clear?

The payback is much longer than 5 years.

No, it's not. See my calcs. Here they are again:

Adding EV usage onto my main meter will cost me about $0.30 / kWh to charge or at 3.5 mi / kWh about $0.086 / mi.
A separate EV meter will cost me about $0.14 / kWh to charge or at 3.5 mi / kWh about $0.04 / mi.
So I save $0.046 / mi with the EV meter. $2000 (cost of 2nd meter install) / $0.046 ~= 43,500 miles. Average person drives around 10,000 miles / year so you'll break even on your meter install around 4.35 years. I rounded up to be generous earlier when I said 5 years.

These rates are very typical for California. If you happen to live in PG&E country it could pay back much sooner - I understand their rates can be much higher. Not to mention that it will cost a lot less than $2000 to install a second meter at the same time your EVSE is installed in most cases - probably more like $1000 at the most and I'm still being generous. It took the guys who installed my 2nd meter an extra hour to install the socket for the extra meter while they were installing the EVSE. Inspector had to come out anyway to inspect the EVSE - so inspected the meter at the same time so no extra cost there. When he was done he called SDG&E who happily came out to insert the new meter at no cost to me. After all - that meter means another $2000 in revenue over 5 years which they would have likely not gotten if I couldn't charge on a separate meter at reduced rates.

But that isn't the point, why not make a smart meter that can distinguish EVSE use from other electrical use. It avoids the permits, plan checks and the expense of installing a second meter. I see this as just one more obstacle to main stream adoption of EV's.

Really the thing to do is to build it into the EVSE like the Blink - then you just have to get the utility to trust it - and use it.

Right now it's pretty clear that they only trust your standard utility grade meter - probably because they are a known quantity that is robust and make it difficult to steal from the utility unless you're willing to deal with live utility wires.

 

[Norbert]

But that isn't the point, why not make a smart meter that can distinguish EVSE use from other electrical use. It avoids the permits, plan checks and the expense of installing a second meter. I see this as just one more obstacle to main stream adoption of EV's.

Another good solution! I wish it would't even have to distinguish.

 

[Robert.Boston]

Remember that the Model S doesn't use a separate EVSE at home; we'll just plug it in to a socket. The car itself could report on its power draw, but I think it unlikely that the utility is going to be entirely satisfied relying on that self-report (even though all the power drawn will have been through the revenue-quality meter of the home).

This need for separate metering is being driven by the total-usage tiering in California, but also by this:

I'm reading a separate issue about simultaneous peak current draw and its effect on (possibly shared) step-down distribution transformers. This problem is not unique to EVs (the modern U.S. home has lots of things that can draw a lot of power, if used simultaneously), but it's certainly more likely with EV charging. A full Smart Grid installation could manage this by managing the charging rate on the EVs on a distribution circuit to keep total load within equipment normal ratings, but this approach requires (a) lots of data interchange and (b) consumers to give up the unfettered right to charge whenever they want, at whatever rate they want.

 

[Tommy]

So was I. Was I not clear?


No, it's not. See my calcs. Here they are again:

Adding EV usage onto my main meter will cost me about $0.30 / kWh to charge or at 3.5 mi / kWh about $0.086 / mi.
A separate EV meter will cost me about $0.14 / kWh to charge or at 3.5 mi / kWh about $0.04 / mi.
So I save $0.046 / mi with the EV meter. $2000 (cost of 2nd meter install) / $0.046 ~= 43,500 miles. Average person drives around 10,000 miles / year so you'll break even on your meter install around 4.35 years. I rounded up to be generous earlier when I said 5 years.

The misunderstanding is in the billing rate structure you used. The rate structure for EV can be whole house tiered rate, that is the example you give, whole house TOU, the calculation I am using, or separate TOU EV meter with TOU or tiered rate on the main meter; the rate I believe you are using. Under the whole house EV TOU plan I still charge the EV at off peak hours and get the $0.14 rate not the $0.30 rate you quote, but because it is whole house TOU, I pay a much higher rate during peak hours for household electricity than the whole house tiered rate I am now on. It is about a $10 to $15 dollar per month up charge for adding an EV to my energy use. This affects people who use little energy and are in the tier 1 and 2 rates prior to getting an EV. I can't save enough installing a second meter to make the ROI work. Those with higher energy use can see a savings as your calculations show.

 

[Norbert]

A full Smart Grid installation could manage this by managing the charging rate on the EVs on a distribution circuit to keep total load within equipment normal ratings, but this approach requires (a) lots of data interchange and (b) consumers to give up the unfettered right to charge whenever they want, at whatever rate they want.

And (c) a commitment by the utility to use this feature only to prevent blackouts in exceptional peak use, but not to avoid upgrading equipment as necessary to support common use. In general, charging during the day at high power rates should be regulated by charging a higher price, not by the utility directly controlling the charging speed arbitrarily.

I wouldn't expect (a) to be so much data that it would be a problem.

 

[Norbert]

I still charge the EV at off peak hours and get the $0.14 rate not the $0.30 rate you quote, but because it is whole house TOU, I pay a much higher rate during peak hours for household electricity than the whole house tiered rate I am now on.

The utility could solve this by saying that off-peak use will not increase the tier for peak or partial peak use, I'd guess. I heard some utilities will assign a certain amount of buffer, if they know you charge an EV, which avoids increasing the tier as long as you stay within that buffer, but this seems more arbitrary.

 

[rolosrevenge]

Nevertheless the crucial point is to have EVs charging off-peak, and until you understand how important this is, and that it does't depend on the things which you think it depends on, you won't be able to make sense of the other arguments I'm coming up with.

No, you see, this is wrong. I've proved in several peer reviewed research papers. It is a step in the right direction, but is suboptimal. What you really want is to have the EVs be controllable through unidirectional V2G schemes while promising people that they will always have the charge they need when they need it. If setting up off peak charging only needs to happen once, the same one time scheduling could allow you to tell the utility when you want your car to be fully charged, and they could extract significantly more value out of it than simply charging off peak. Simulations with real time pricing show that sometimes there is more economic and system benefit with peak charging if properly controlled.

Another issue that you ignore is there will be plenty of people who are price inelastic who will buy EVs and they will plug in when it is most convenient for them with the intent of charging as fast as possible. This will be exacerbated by the fact that even peak electricity prices will be so much cheaper than gasoline. No off peak pricing will have them shift their charging, so you will still need a bigger transformer or control.

It doesn't really matter how much I need in one night. The problem is that you are telling people to start charging at 6 pm, and that isn't off peak, that's when lots of people come home.

I'm not telling people to start then, but telling them they can.

 

[Norbert]

What you really want is to have the EVs be controllable through unidirectional V2G schemes while promising people that they will always have the charge they need when they need it.

Sorry, but with the current battery technology, I don't want V2G at all. However it may be a worthwhile subject to study for the future when we have batteries with improved cycle life.

 

[rolosrevenge]

Sorry, but with the current battery technology, I don't want V2G at all. However it may be a worthwhile subject to study for the future when we have batteries with improved cycle life.

Unidirectional V2G doesn't have any discharging and thus does nothing to reduce cycle life. It allows EVs to be dispatched while charging around a given set point to perform frequency regulation, spinning reserves, non-spinning reserves, and peak shaving. Using proper control and revenue optimization can allow you to charge using real-time prices and actually be paid to charge. If you don't want control, the best sort pricing scheme is a double auction real time nodal price based on optimal power flow. The nodes in this case are determined by any distribution segment limited by congestion. But, it only works if enough appliances have a bid curve and your larger appliances like EVs are not price inelastic. If there are too many price inelastic customers and no control, you need to figure out what rate to charge people to pay for a bigger transformer. For Duke Energy's system, EVs can be charged the same rate as any residential customer as long as they charge at 6.6 kW or less.

 

[Tommy]

I am beginning to think this talk by the utilities about daytime charging of EV's causing undue stress on the grid is a red herring. I say this because the housing track I reside in all the homes have electric ovens and we have never had a problem with transformers on the day the ovens are all in use: Thanksgiving. Keep in mind it takes 4-6 hours to cook the average turkey and across the nation all these ovens are on; yet I haven't read reports of any problems to the grid due to this extra load. Ok, some tongue in cheek on my part, but really, I think there's enough juice in the grid to take care of EV's.

 

[Dave EV]

The misunderstanding is in the billing rate structure you used. The rate structure for EV can be whole house tiered rate, that is the example you give, whole house TOU, the calculation I am using, or separate TOU EV meter with TOU or tiered rate on the main meter; the rate I believe you are using. Under the whole house EV TOU plan I still charge the EV at off peak hours and get the $0.14 rate not the $0.30 rate you quote, but because it is whole house TOU, I pay a much higher rate during peak hours for household electricity than the whole house tiered rate I am now on. It is about a $10 to $15 dollar per month up charge for adding an EV to my energy use. This affects people who use little energy and are in the tier 1 and 2 rates prior to getting an EV. I can't save enough installing a second meter to make the ROI work. Those with higher energy use can see a savings as your calculations show.

Right - definitely going whole-house TOU can be a step towards reducing your energy costs when adding an EV who's demand is easily scheduled.

That very likely gets you a lower overall cost compared to single meter whole-house tiered billing. And of course if you can manage electricity demand for the rest of your house you could get very close to the same overall costs of adding a 2nd meter for EV charging.

One thing to keep in mind is that at least PG&E and SDG&E have tiered whole-house TOU rates - exactly how that works, I'm not sure... I assume that means that once your whole house consumption has moved into the next tier, all rates jump into the next rate schedule, but am not sure. If this is the case, you're screwed either way - off-peak tier 4 rates for SDG&E anyway are basically the same as the regular DR rate. In fact - I see no incentive at all for residential customers to use the TOU rate.

 

[rolosrevenge]

Most studies with TOU rates have resulted in people paying more, because they are not willing to change their behavior significantly enough to take advantage of the savings. It's the same reason so many people buy SUVs, they don't think about operational costs, they think about comfort and convenience. People don't buy kWh, they buy comfort (heating, AC, hot showers), convenience (electric ovens, blenders, vacuums, microwaves), and recreation (TVs, DVD players, computers, game consoles). If EVs become mainstream, they will fit into one of those three categories for each person and will be charged accordingly. Since most EV owners now are tech savvy, environmentally conscious early adopters, they care more about the impact of the charging and the price they pay. I wouldn't expect the general populous to care that much sadly.

 

[Norbert]

Keep in mind it takes 4-6 hours to cook the average turkey and across the nation all these ovens are on;

You'll have to pay higher rates for above-average turkeys.

 

[Norbert]

Most studies with TOU rates have resulted in people paying more

That of course means nothing else than that most utilities have messed up the rate structure.

 

[rolosrevenge]

That of course means nothing else than that most utilities have messed up the rate structure.

Which shows that it is hardly a trivial problem to design a rate structure that shifts behavior appropriately. One of the biggest problems is that there is really no way to model how people will react, so the only way to gather data is to actually do a pilot. So far, almost all of the pilots have been unsuccessful.

 

[Norbert]

Which shows that it is hardly a trivial problem to design a rate structure that shifts behavior appropriately. One of the biggest problems is that there is really no way to model how people will react, so the only way to gather data is to actually do a pilot. So far, almost all of the pilots have been unsuccessful.

Are you not reading what Tommy writes? We have many similar reports.

When people don't change their behavior, then in general they should continue to pay about the same. But those who went through the effort of switching to a TOU rate surely had good intentions, so that's a good sign that those rate structures are trivially wrong. I'd think peak TOU rates should be only slightly above the non-TOU rate, if at all. Switching to a TOU rate should result in savings for almost everyone if not actually everyone.

 

[Robert.Boston]

Are you not reading what Tommy writes? We have many similar reports.

When people don't change their behavior, then in general they should continue to pay about the same. But those who went through the effort of switching to a TOU rate surely had good intentions, so that's a good sign that those rate structures are trivially wrong. I'd think peak TOU rates should be only slightly above the non-TOU rate, if at all. Switching to a TOU rate should result in savings for almost everyone if not actually everyone.

Err, no. Current retail rates average the cost-to-serve across all members of a rate class. If you could suss out the actual cost to serve each individual customer, you would find that some customers are paying less than their full cost, while others are paying more. That is, the cheap-to-serve customers are subsidizing the expensive-to-serve customers. When TOU rates are introduced, however, this cross-subsidies begins to unravel: the actual load profiles reveal who is expensive to serve, and who is cheap. Therefore, once TOU rates are introduced, approximately half of all customers will see higher bills, while another ~half will see a rate drop. TANNSTAAFL.

If TOU is optional, however, rational people will only choose TOU if their usage pattern results in a savings. This self-sorting ought to lead to an increase in the flat (non-TOU) rate, because the profile of the average use of people in that rate class is now more costly to serve. Until the utility applies for and receives that higher rate, however, it will be losing money. Which may be one reason why utilities aren't racing to introduce TOU rates.

 

[rolosrevenge]

But one of the biggest problem with TOU is that it isn't dynamic and can often result in peak shifting. A lot of research out of Pacific Northwest National Laboratory has shown the significant problems with TOU pricing schemes. We even used there cases as a homework problem for a smart grid class for masters students. Their goal was to try and design a proper TOU rate structure assuming all major appliances in the household were price responsive. The simulations were done in the GridLab-D simulator. Since GridLab-D recalculated the actual price using an OPF, what the real cost should be at that time, based on the usage, was compared with the TOU rate. No one was able to get them to sync up and peak shifting and some other problems were prevalent. The only true solution is the double auction system I previously mentioned which accurately determines the real time price.

 

[Robert.Boston]

Agreed, RR -- though at least in the organized markets (New England, NY, PJM, Midwest ISO, Texas, and California), there is a real-time price. Unfortunately it's calculated ex post, which limits its usefulness for the purposes of real-time DSM. It's also zonal for loads, which is far too coarse to control charging of EVs to manage distribution issues. The biggest challenge, though, is convincing state regulators to adopt RTP rates -- for some paternalistic reason, regulators don't seem to want to let consumers see the true wholesale cost of the power they're consuming.

 

[Norbert]

But one of the biggest problem with TOU is that it isn't dynamic and can often result in peak shifting.

That's not a problem but the point of the whole exercise! Peak shifting (better call it "balancing") is what leads to a more effective use of power plants and therefore to fewer necessary power plants. That means it showed success.