Electric Vehicles and Electric Utility Rates: Better Rates Are Essential for the Next Generation of Transportation in Pennsylvania
Philadelphia, PA –With the use of electric vehicles (EVs) accelerating, ChargEVC-PA filed a petition at the Pennsylvania Public Utility Commission (PUC) on February 4th, 2022, requesting a proceeding to discuss electric rate options for EVs. The proceeding will establish a collaborative forum in Pennsylvania for all parties to explore how electric rates can lower electricity costs for all while saving EV owners additional fuel costs.
While EVs only accounted for 1% of new vehicle sales in 2020, market trends indicate that EV adoption will grow significantly in the coming years. Nearly all of the major auto manufacturers have recently established electrification goals, while also backing up the goals with significant investments in vehicle manufacturing and technology development. At the same time, the bipartisan infrastructure bill will bring millions of dollars to Pennsylvania for investments in new public charging infrastructure.
The growth in EV adoption will bring much higher energy usage, which presents two critical opportunities for regulators in Pennsylvania. First, rates can be used to communicate with customers about the best time of day to charge their EVs. This communication will ensure that customers are not charging during peak times, minimizing new infrastructure costs as the grid supports higher demand. Second, rates can provide customers greater fuel cost savings, improving the economic case for EV adoption.
EVs reduce harmful tailpipe emissions, which improve air quality and human health. EV owners also enjoy fuel cost savings because it costs much less to operate (and maintain) an EV than a traditional car. Transitioning cars from gasoline to electricity also reduces reliance on foreign oil imports while boosting reliance on local electricity, benefiting Pennsylvania’s economy.
EVs can also provide significant benefits to the electric grid. If vehicles are charged at the right times, system efficiency is improved, and rates should decline for all customers. This is because the costs of the system are collected from a much greater volume of electricity sales (driven by the higher consumption by new EVs). However, without proper rate design, the grid benefits may not be realized because of the potential large increases in new system costs when EV owners charge during the highest system peaks.
“The way utilities charge for electricity impacts the EV market and electric prices for all customers, so having this discussion is timely and important.,” says Brendon Baatz of ChargEVC-PA.” He continues, “We’re looking forward to discussion of these issues with stakeholders that can help the Commonwealth get this right so that the benefits of electrifying transportation are realized by all, not just the drivers of EVs.”
The PUC is accepting comments for 20 calendar days (until February 24th) to determine whether it should consider the proceeding. ChargEVC-PA is calling on interested Pennsylvanians to submit comments supporting the proceeding. The petition can be found here, and the associated docket can be found here.