Why the future of electric vehicles depends on utilities and vice-versa

Why the future of electric vehicles depends on utilities and vice-versa

Of the three ways to get electric vehicle chargers to big market scale, the consensus emerging among EV enthusiasts, ratepayer advocates, and business leaders is that utility leadership may be the best choice.

In 2011, President Obama proposed having a million EVs on U.S. roads by the end of this year but today there are perhaps 300,000. Only utilities have the money and people to give would-be electric vehicle buyers enough places to plug in to reach that kind of goal, observers say.

Utilities have to be the ones because it will take a longer time and cost more than a private company will give it, explained Greenlots CEO Brett Hauser. Utilities can rate base the charging infrastructure upgrades and consider what is best for the community. Private sector financial concerns will focus the infrastructure on narrower, more affluent markets.

Government subsidies for charging infrastructure are typically workable only at the local level where municipalities know their transportation systems, Plug-in America Executive Director Jay Friedland explained. The private sector has been significantly more successful, with leaders like ChargePoint, Eaton, and Tesla making significant progress.

The third model is utilities, Friedland said. So far, only NRG Energy has jumped in but that is the beginning of the utility model.

Californias Utility Reform Network and other ratepayer advocates have expressed interest and concern about rate impacts from utility involvement.

 I agree that utilities should do EV infrastructure but, like smart meters, the monies spent need a lot of scrutiny, observed NC WARN Energy Expert Nancy LaPlaca.

The price you pay

Some say the rate-based infrastructure buildout will be too expensive for utility customers, but PG&E's estimate for 25,000 level two charging stations and 100 DC fast chargers was only $0.70 per month to the average residential customer, Hauser said.

Consider the alternative: EVs are coming. They are going to add considerable load. Pay $0.70 per month now or pay $10 or $20 per month later for grid upgrades to keep service reliable and the grid stable.

Greenlots was selected by Southern California Edison (SCE) to supply software for the utilitys pilot workplace charging study. Greenlots certified open automated demand response (Open ADR) software has been operating since October 2014 in the 80 EVSE level two chargers installed at nine SCE campuses.

SCE study data will be assessed by the end of this year. The utility wants to better understand consumer behavior when offered fee-based charging at different price points and different demand response options.

SCE employees who drive EVs to work are offered three pricing options at the payment kiosk, Hauser said of the pilot study. They can pay the standard rate to get a level two charge no matter what the need for demand response might be. Or there are two discounted rates.

For the less discounted rate, the EV driver chooses a level two charge but allows the system to provide less than the full level two charge if there is a demand response event.

People who drive plug-in hybrids or for another reason dont need a level two charge can access the higher discount by opting for only a level one charge. They would not need to be curtailed for a demand response event unless it was a major emergency, Hauser said.

The bigger picture

Global revenue from EV charging equipment is expected to grow from todays $81.1 million to $2.9 billion by 2023 and annual U.S. sales of workplace charging systems will reach over 63,000 by 2020, according to Navigant Research

The SCE study is independent of the utilitys larger proposal which, along with proposals from Californias two other investor owned utilities, awaits final approval by California regulators.

The Southern California Edison (SCE) $355 million Charge Ready Programs would run five years, from 2015 through 2019, and result in a rate increase of $0.001 per KWH, or 0.1% to 0.3% of the average bill. SCE would locate, design, build, own, and maintain the electrical infrastructure. Customers would choose, own, operate, and maintain the charging stations.

Phase 1, a one-year pilot, would cost $22 million and deploy up to 1,500 charging stations. Phase 2 would cost an additional $333 million and deploy up to 30,000 charging stations by 2020.

Pacific Gas and Electric (PG&E) wants to install 25,000 level two chargers and 100 DC fast chargers at a cost of $653.8 million, applied across its ratepayer base. Ratepayers would see no bill impact in 2016 and 2017, according to PG&E, and costs would reach only $0.001 per KWH over the next five years, adding an estimated $0.70 per month to the typical residential customers bill from 2018 to 2022.

The San Diego Gas & Electric (SDG&E) $103 million electric vehicle-grid integration (VGI) plan was designed to test customer response to variable rates for vehicle charging. It would build 5,500 charging stations, primarily at multi-family housing and workplaces, between 2015 and 2025. The capital cost would be approximately $59 million and operations and maintenance over the ten years would add $44 million.

Everyone talks about the utility death spiral but it is largely exaggerated, Hauser said. Just like everybody else, utilities have to evolve and find better ways to communicate and interact with their customers.

Another Greenlots feature that may have helped win the SCE bidding is that the software enables the utility-customer relationship and opens up a new utility business opportunity, Hauser said.

SCE is testing a three price level system now. But they could have everyone pay the same price when they plug in and then, if there is a demand response event, push real-time pricing information to EV  drivers via SMS and give them the option to opt in or out.

And, crucially, the message would come from SCE, not Greenlots, Hauser said. The utility interacts directly with the customer, opening the way for a new utility business relationship that could be part of the next utility business model.

Source: Utility Dive

SMART GRID Bulletin October 2017


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