Electric Vehicles

Public power utilities prepare for EV boom

As auto manufacturers continue announcing plans to move toward producing only electric vehicles (EVs), states such as New York are setting high targets for EV adoption. Utilities should be prepared for a potential exponential increase in electricity demand from vehicles within the next 10 years.

And while this increased demand may mean more revenue for an electric utility, it comes with added load management and operational considerations.

The first step in preparing for future load management is understanding the factors behind market forecasts for EVs. Utilities should be aware of trends such as the decreasing costs of vehicle batteries, increased model availability, and advances in charging infrastructure. Utilities should also be aware of any purchasing incentives and potential partnerships encouraging EV adoption to customers in their service territory.

Roles for public power utilities

Public power utilities have a variety of opportunities to get involved in the adoption of EVs within their service territory, from educating customers to offering incentives and developing effective price signals to manage load. During the past few years, public power utilities have readied for increased EV adoption by taking actions such as creating incentives for customers to purchase EVs, implementing EV rate programs, and undertaking pilot grid integration programs.

For example, the Redding Electric Utility in Northern California launched a rebate program that provides incentives for the purchase of a plug-in electric vehicle (PEV) or an EV charging station. The incentives are available to both residential and commercial customers.

EV system benefits

EVs place increased load on the grid, creating direct revenue for utilities that can defer or eliminate the need for subsequent rate increases for all customers. Public power utilities are also partnering with charging service companies to manage PEV charging and shift load toward times of high renewable power production and away from peak power demand.

Utilities will want to review what has been done in terms of strategic load management, from offering fast charging with dynamic pricing to demand response programs for customers charging at home. Utilities in cities including Los Angeles, Austin, New York, and Seattle have launched programs to understand how managing PEVs as part of demand response and renewables integration programs can benefit all of their customers, not just those that drive EVs. 

Before buying an EV, customers want to know how much it will cost to charge the vehicle, where they can charge it, and that they can reliably count on the availability of a charge when they need it. Utilities are well-positioned to explain the costs and benefits of vehicle electrification in their service territories using actual cost data. This can help to overcome the financial uncertainty that many potential PEV owners have when considering ownership. Public power utilities can partner with manufacturers and automotive dealers to improve understanding about EVs among customers as well. Utilities can also include information about available vehicles, local incentives, and typical costs for charging on their websites or in other customer-focused materials.

Longer term, public power utilities can adjust or expand EV efforts by evaluating the effect on sales, customer awareness, and demand response programs.

A new report from Navigant, produced exclusively for American Public Power Association members, includes case studies of successful PEV programs at public power utilities, common challenges and strategies for overcoming them, and the benefits of managing PEV energy consumption for grid operations. Public power utilities interested in increasing adoption of PEVs and understanding how to strategically manage EV load can read more in the report. To help utility leaders think through the implications of EVs on the electric system, the report includes a series of questions to help utilities self-assess opportunities to address EV adoption in their area.

Access the report, Understanding the U.S. Plug-in Electric Vehicle Market