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Top 10 EV Challenges

Utilities prepare for a bumpy road.

Fortnightly Magazine - June 2011

more familiar with where and how often to charge.

#3—Mobility of Load: Even if the proper collaboration and planning between EV owners and their utilities allows for proactive right-sizing of assets, another issue arises from the fact that this significant new load can move unpredictably throughout the delivery system, and across utility service territories. How do utilities plan and forecast for the equivalent of a whole home load that isn’t stationary?

Public charging infrastructure has the advantage of imminent coordination among stakeholders, but 80 percent or more of EV charging likely will occur at a private residence—mostly the EV owner’s, but not always. Charging at home presents a different set of ramifications than does paying at the pump.

Policies and Practices

#4—Billing: The mobility concern also applies to billing. This is also referred to as the charge-roaming factor. EV charging is faced with the big issue of who should be billed? Identifying energy consumption and billing customers accurately will be a challenge. For private residential charging, disaggregating EV energy consumption from the whole home consumption and crediting the charging host can vary from one home to another home and one utility to another utility, interstate or intrastate, and differing rate structures.

If someone plugs in at a public charging station, how does the bill get back to the vehicle owner? A number of payment methods could work, including a pay-at-the-pump service, in which the user adds credits to a personalized key fob or prepaid card. Alternatively, costs could be automatically added to the consumer’s household utility bill, or the balance settled remotely with the user paying via SMS text messages. All these mechanisms are being tested, and they all present challenges.

Utilities will need to modify their billing systems, if they own the public charging infrastructure, to calculate energy usage rates and generate bills more frequently than the current practice of 24 hours. In a public-charge event, as many as five factors might need to be settled: the amount of energy consumed, distribution fees, charging station surcharges, new tax implications and possibly even parking fees. Additional costs might arise from credit card readers, transaction fees and terms. Mobile billing could evolve into a completely new transaction model, with sales managed through a scalable clearinghouse system.

#5—Gas Tax Recovery: The price of each gallon of gasoline includes federal excise taxes and state sales and road taxes. As EV adoption increases and replaces ICE transportation, electricity energy providers will be responsible for metering, assessing, administering and collecting equivalent tax revenues. As yet, no one knows how these taxes will be calculated and levied, or whether they’ll be affected by clean fuel credits.

#6—Carbon Credits: Some states plan to give emissions credits to utilities for supporting rechargeable cars, but these credits could go to automakers instead. Since car companies absorb the costs to develop advanced vehicles to meet local requirements, policy makers might ascribe societal benefits from EVs to auto manufacturers. As a result, automakers rather than utilities might earn credits for the low-carbon fuel aspect of EVs.

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