Utility Initiatives Foster Plug-In Electric Vehicle Charging at Home and Work
Updated January 6, 2016
Considering that electric utilities plan and make business decisions based on changes and trends in electricity demand, it's natural that these public service providers are also tuned in to plug-in electric vehicle (PEV) charging infrastructure developments. In fact, utilities began to adopt hybrid electric vehicles and PEVs into their fleets as early as the 1990s, although their encouragement and facilitation of the public’s use of PEVs and electric vehicle supply equipment (EVSE) is now more overt.
Providing EVSE, either directly or via incentives, can allow utilities to gain access to valuable data on PEV charging habits, which can help them prepare demand management solutions for future widespread PEV adoption. Utilities are not federally required to incentivize PEVs because they are uniquely structured as investor-owned, publicly-owned, and cooperative energy companies. However, they do have their own unique mandates.
Utility Incentives for PEVs and EVSE
Utilities have a long history of supporting PEV adoption, particularly through public infrastructure development. What began with small and large paddle inductive charging stations along the West Coast of the country has grown to include Level 1, Level 2, and DC fast charging EVSE across the nation. Many utilities are currently involved in providing public charging installations, with others waiting in the wings. Utilities incentivize PEV purchases as well–for example, Alabama Power presently offers dealerships in its service territory an incentive for every PEV sold.
A variety of PEV and EVSE incentives are also available for residential utility customers, with more coming online as utilities discern the most effective ways to promote charging at home and effectively manage the demand. A discounted time-of-use rate, which uses a pricing signal to encourage charging during off-peak hours, is currently the most popular incentive offered by utilities, including San Diego Gas & Electric and Virginia Dominion Power. Time-of-use rates often require installation of a second electricity meter or EVSE, used solely to provide the reduced rate. This meter provides utilities with specific data on EVSE usage and trends separate from traditional home energy usage. Some utilities offer a free charger or a rebate toward qualified equipment purchases.
Residential customers are sometimes eligible to receive rebates. For instance, Lansing Board of Water & Light in Michigan has a first-come, first-served rebate available for EVSE purchase and installation costs, and Georgia Power offers a rebate for EVSE purchases only, available for a limited time. Utilities like PECO Energy Company (PECO) in the Philadelphia area offer an incentive or rebate for residential customers purchasing PEVs, helping PECO map EVSE demand in its service territory.
Financial incentives are also available to businesses that increase both fleet and employee PEV use. Numerous utilities, such as Indianapolis Power & Light, offer time-of-use rates for fleet vehicle charging, while Florida’s Jacksonville Electric Authority and others offer PEV purchase rebates. Utility programs offering free or reduced-cost EVSE are also becoming more popular. Los Angeles Department of Water and Power and Puget Sound Energy are two of the utilities using EVSE rebates for commercial customers to help build the charging networks in their communities.
Working with State Regulators
Investor-owned utilities operate under regulations that state public service and public utilities commissions have established. Commissions represent the public by working with utilities to ensure that power distribution is safe, reliable, and available at fair prices. These entities must approve any utility incentive program. Several commissions in the United States have begun to encourage utilities to include PEV and EVSE incentives in their offerings, typically as part of their energy efficiency and green power regulations. The Maryland Public Service Commission, for example, is currently working with Baltimore Gas and Electric Company and the Potomac Electric Power Company, also known as Pepco, to pilot discounted time-of-use rates and free EVSE. This has enabled utilities to gather data that will help inform future state policies on PEVs and EVSE.
Other state commissions have yet to take a strong position to push for PEVs and EVSE, allowing utilities to act on their own to pilot incentive programs. As both shareholders and ratepayers ultimately fund all utility incentive programs, creation of any new, permanent program requires commission approval. An approval reflects the benefit to ratepayers of PEVs and EVSE. For instance, Hawaiian Electric Company recently converted its own pilot PEV time-of-use rate into a permanent program after receiving approval from the Hawaii Public Utilities Commission.
PEVs at Utilities and Workplaces
Electric utility fleets have been among the earliest adopters of PEVs, with utilities using their own vehicles and employees as ambassadors to promote PEV adoption to their service territories and on the national stage. Utilities continue to promote PEVs via non-financial incentives, starting with their own employees. Numerous companies offer benefits to employees who drive PEVs, including free workplace charging, rebates for PEV purchases, and employer discounts for access to charging networks.
From the customer’s perspective, the most common incentives PEV drivers see from their utility are residential EVSE incentives and the development of access to public infrastructure. Less visible, but equally important, is the work utilities do to promote workplace charging incentives with their commercial customers. Utilities such as Green Mountain Power and Public Service Electric & Gas (PSEG) work to make EVSE more affordable for workplace charging purposes. Employee education, ride-and-drive events, and installation support are some of the ways utilities support infrastructure expansion and use in their service territories.
In 2015, utilities reaffirmed their commitment to workplace charging and PEVs when the Edison Electric Institute signed a Memorandum of Understanding (MOU) with the U.S Department of Energy (DOE) to accelerate PEV and EVSE adoption. The MOU’s goals include helping overcome barriers to deployment, increasing workplace charging efforts in partnership with DOE’s Workplace Charging Challenge, creating resources for PEV policy makers, and analyzing the continued role utilities have in the PEV and EVSE market. Efforts related to this MOU will enable utilities, commissions, government entities, and potential PEV drivers to make more informed decisions.
As PEV adoption grows, utilities are working to manage infrastructure demand and support additional EVSE installations. Many utilities currently have time or participant number limits on their financial incentive programs, ensuring that the programs help reduce PEV adoption barriers only until the vehicles and technologies become more mainstream. To date, most utilities have re-adopted or extended PEV and EVSE incentive programs before or soon after the initial timelines had expired. Some ongoing programs have a limited amount of funding. Commission approval will be necessary to authorize further funding, but many utilities have already started this application process. Time-of-use rates, however, will likely continue as permanent rate offerings once they are approved and established, subject to normal electricity rate fluctuations.
More utilities and commissions have begun joining the effort to create EVSE infrastructure networks. Utilities working independently, and in partnership with all levels of government and businesses, also continue to develop pilot programs, aiming to identify the most effective public-private partnerships to promote vehicle and infrastructure adoption. The availability of utility incentives is expected to continue to ebb and flow across the country as PEVs and EVSE become more prevalent in existing markets and are introduced to new regions.