Electric Vehicles

Rapid EV adoption could lower rates for Ill. consumers

Robust growth of electric vehicles and the proper policy initiatives could lower electric bills for all Illinois electric customers, even those who do not own a car, according to a new report by the Illinois Citizens Utility Board.

The study, Charging Ahead: Deriving Value from Electric Vehicles For All Electricity Customers, found that consumers could reap up to $2.6 billion in cumulative benefits on their power bills through 2030, if state officials establish policies that encourage motorists to charge their cars during times of the day when there is less strain on the power grid and electricity prices are at their lowest.

Under what the report calls “optimized charging” all electric vehicle owners would charge their vehicles between 12 a.m. and 6 a.m. “Unmanaged charging” assumes EV owners charge their vehicles between 6 p.m. and 9 p.m.

Under the optimized scenario, the report found that by 2030 all Illinois electricity consumers could save between $238 million and $2 billion in energy costs, between $32 million and $124 million in capacity costs, and between $198 million and $536 million in residential electricity delivery rates.

The authors say the report’s recommendations constitute “a policy blueprint” that states should embrace to maximize the savings potential from electric vehicles.

Chief among those recommendations is a call for states to automatically enroll owners of electric vehicles in “dynamic” pricing programs that vary electric rates depending on the time of day power is consumed. These rates could apply only to the cost of charging an electric car and would allow for electric vehicle owners to opt out of the program.

Charging electric vehicles during periods of low demand can help ensure that the grid can absorb the new loads on the system without requiring expenditures for new generating plants or enhancements to transmission and distribution infrastructure.

Owners of electric vehicles, meanwhile, would benefit from electricity priced lower than regular fixed rates.

If such “smart charging” policies are not adopted, and owners charge their electric vehicles during periods of high power demand, it could put increased stress on the grid and lead to higher power bills.

“While the EV revolution is still in its infancy, we’re already approaching a crucial crossroads in how to manage the ripple effects on our electricity costs … The public can’t afford for their policy makers to wait. Action is needed now to set policies that help EV owners charge their cars in a way that benefits everyone,” David Kolata, executive director of the Citizens Utility Board, said in a statement.

Currently, there are about 15,000 electric vehicles in Illinois today, but the study estimates that number could grow to 690,000 by 2030 or as high as 2.2 million, if the state adopts an aggressive carbon dioxide emission reduction target.

The report is available here.