Way too much ado about tiered rates…

There’s been a lot of fuss lately over the structure of California’s electricity rates, and how they’ll affect EV drivers. The LA Times has specifically taken issue with the fact that we have a “tiered rate” structure, meaning the more electricity one consumes, the more expensive each kilowatt-hour becomes. Adding a vehicle into the mix would push the rest of the house into a higher rate tier. And that’s definitely a concern for some- it certainly was when I installed the charger for the Chevy Volt I’m currently driving. But like so many issues around electric vehicles, this reporter takes a fair question, overly simplifies it, and writes it up as if the sky is falling on EV drivers and we should all stick to the same gasoline cars that have gotten us where we are.  Worse, she failed to do some basic homework. For years, every major utility in CA has at least one rate option for EV drivers, to encourage and reward nighttime charging (at which time we have enough excess capacity to charge millions of EVs with no new power plants of any kind needed.) Further, most EV drivers already can and do have separate meters for their vehicles, to exclude the car’s use from the tiered rate issue.

But let’s take the worst case scenario- that would be me. I live in a townhouse, and a separate meter turned out not to be feasible- which means I also can’t get the cheapest of the three rate options that Ed Kjaer of SCE mentioned in the article.

Month 1, I was on the most expensive rate (standard “residential plan”- tiered, but no time-of-use): my house and car usage together cost $83, with the car accounting for about $50 of that (1350 miles driven). My normal household consumption is low enough to normally keep us in tier 1. Adding the car pushed us into tier 3, but the result was hardly catastrophic.

Still, we knew we could lower that cost by switching to the middle rate (“home and EV plan”- whole-house TOU, still tiered): month 2 bill for house and car? $56.17, of which about $20 was the car. Bout the same mileage, including a trip to Vegas- so a higher percentage of gasoline miles than I’d normally have driven. It’s also worth noting that I work from home when I’m in town, so we have more on-peak usage- the most expensive type- than others typically do, especially in the afternoon when the boy gets home from school.

In each month I’ve also used eight or nine gallons of gas, so my total monthly fuel cost is currently about $50 on the newer rate-  even with premium gas. In the little Saturn I’d otherwise have been driving, I’d have paid 3x that. And I’ve made no special effort with respect to how and when I charge my car- when I switched to the TOU rate, I took two minutes and programmed my car to charge between midnight and 6:00am (though it never needs that long). Otherwise, I simply plug in every night and it’s full in the morning.

It’s true that charging an EV in CA- or anywhere- can be expensive if you want it to be. I know of people who are paying 53 cents/kWh to charge their vehicles, because their residential consumption is high enough to put them in the highest tier to start with, and they don’t bother signing up for an EV rate or separate meter. And there is still work to be done with respect to refining rates and charger installation processes. But even today, with less effort than it takes to choose which EV to buy in the first place, charging a plug-in car is cheaper than buying gas, period.

PS- SCE customers who want to know exactly what a plug-in car will do to their electric bill can find out ahead of time with this handy-dandy rate calculator.

11 thoughts on “Way too much ado about tiered rates…

  1. Excellent explanation as usual, Chelsea. Too bad WordPress blogs as yet lack the same subscriber distribution as the LA Times!

  2. Always something interesting in the EV world from you Chelsea. I will soon know how Florida Power and Light charges for me to drive my Volt. It was picked up by GM on the 12th of this month and should have it soon.

    Take Care,

  3. As usual, an intelligent, balanced response from you on California tier rates. One side question- if folks are paying over 50 cents a KWH, Solar PV has got to start to look very good! Though probably not as doable in a townhome:-(

    1. Thanks, Paul! The folks paying that much generally live in very large homes- and yes, solar would be great for them. Of course, if they won’t take the time to make a phone call and get an EV rate…

  4. Chelsea, when I read the Times article this morning I had the same reaction as you. I was tempted to “write a letter to the editor”. Since you have already done so (far better than I could have done), may I suggest that you contact the Times to see if they would print your side of the story? It is very upsetting that some would be EV buyers may be put off by Tiffany’s piece.

  5. I appreciate all the views shared by this very enthusiastic EV blogger and have followed the blog for some months. But this statement that EV charging is cheaper than gas only applies to some people – not everyone, not even close to everyone in CA. When she added – “period” – I couldn’t let it pass.

    If you are on PGE, have a family of four like me with an enerygy concious stay at home mom, a modest 2300 sq ft house, and a 75mi round trip commute to work daily (or any commute which meets or exceeds the EV only range of a Volt) – I can tell you in no uncertain terms that charging a Chevy Volt every week night to get that 35 – 40mi of EV only range, would cost more than than the same amount of gasoline used to drive those same 35 – 40 miles in even a V6 Honda Accord – “period”. It is not even close. Compare to a Prius and you get blown out of the water big time.

    That is unless you install a separate TOU meter for the car charger. For many families – not using a separate TOU meter in CA for your vehicle charging means you are not saving anything and very likely spending way more than gasoline – that doesn’t even take into account the huge premium you pay up front for the EV privilege.

    We have some serious energy rate problems in CA – and having to bail PGE out of bankruptcy kills the EV deal for many people unless they go with with the TOU for car only.

    1. Hi Skyhawk,

      I am enthusiastic, yes- but I’m the first to point out that it does us no good as a movement to spread misleading info (e.g. http://bit.ly/hSEWxq ). So certainly no intention to do that here. Also, this piece addressed only the LA Times’ (and others) comments about CA rates and the specific cost of charging a plug-in car in CA. I wasn’t making a case for the overall economics of EVs including purchase or other cost of ownership. I readily concede that depending on driving patterns and other variables, many if not most of the first purchasers will not break even on the higher up-front purchase price unless they drive a lot and keep the car for many years. However, while economics matter, they are not the main factor for most early adopters buying these cars, just as most hybrid buyers did not initially purchase them expecting to beak even on gas savings.

      To the point at hand: your situation sounds not unlike mine, save a modest square footage difference. There are 1-2 people home during the day in my house too. I was unable to get a separate meter- but the middle option of a whole-house TOU is much cheaper than gas, even with some modest peak usage. Even the standard residential rate that we were on for the first month was slightly cheaper- though we are energy conscious enough in general that even with the car we were only pushed into Tier 3 instead of Tier 5. However, the main difference between us is that it sounds like you may very well be able to get a separate meter, which would make your scenario potentially better than mine.

      But please note that my comments stipulated signing up for one of the EV rate scenarios offered by all of the major utilities in CA. In PG&E’s case, there are two. In 15+ years of working w EVs, I have never heard of a PG&E customer who was not able to save money compared to gas as long as they used one of the rates designed for EVs- I’d love to hear from them if they’re out there so I can update my information. I did note in the post that I know of EV drivers who are paying big bucks to charge their EVs because they haven’t looked into their options. But that’s the choice of the customer, not the fault of the utilities nor EV technology.

      More information about PG&E’s specific options can be found here: http://www.pge.com/includes/docs/pdfs/shared/environment/pge/cleanair/electricdrivevehicles/PEV_rate_options.pdf

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