APS rate review proposals could benefit electric vehicles

June 24, 2016

Utilities that plan for the expected increase of electric vehicles in coming years could turn them into “an incredibly valuable grid asset,” according to a report from the Rocky Mountain Institute (RMI).

RMI, a clean-energy and sustainability think tank, recently released Electric Vehicles as Distributed Energy Resources in conjunction with the nonprofit Regulatory Assistance Project and utility San Diego Gas and Electric.

By planning for EVs, utilities can operate the grid more efficiently and create benefits such as extending the life of existing infrastructure, avoiding new investments, supplying ancillary power services and enabling greater integration of renewables, the report says.

One way to support EV adoption is through pricing structures that encourage EV owners to charge vehicles during low-demand times and not during the late afternoon and early evening, when energy demand on the grid is typically highest. Charging in the late morning and early afternoon could absorb excess solar output, while overnight charging would make more efficient use of traditional 24/7 power resources.  

In the current Rate Review, APS is proposing changes to our pricing structure and on-peak hours that would accommodate EV owners. On-peak hours would move later in the day from noon-7 p.m. to 3-8 p.m., increasing time for charging vehicles with lower-priced electricity, particularly in the early afternoon.

Demand rates also incentivize EV owners to charge their vehicles during off-peak hours. For instance, a 2016 Nissan Leaf charging at home can demand up to 6.6 kW of power, similar to the peak demand of a medium-sized home. The demand from charging a Tesla Model S can be up to 10 kW, which is comparable to adding a large house to the grid.

“In order to avoid overloading distribution grid components, utilities will need to either invest in expensive grid upgrades or offer electricity rate structures that encourage vehicle owners to recharge their vehicles when grid power demand is low,” wrote one of the report’s authors, Chris Nelder, in an RMI Outlet blog post. “Managing charging patterns is already important for neighborhoods with more than three or four EVs in places such as San Diego and Silicon Valley.”