Consumer Advocates Look Forward


Consumer Perspectives on Electrification

PUF 2.0 - February 15, 2018

PUF's Steve Mitnick: Elin, you represent the consumer advocates of the nation. Do they have certain perspectives on electrification?

Elin Katz: It's hard to talk about consumer advocates as a monolith, just like it's hard to talk about consumers being of one mind, but we certainly see a commonality of issues that are cropping up all over the country.

Particularly around electric vehicles. As I'm sure you know, there's a push not just in the electric industry, but it's also being pushed by the automobile industry.

We wonder sometimes what's going to truly catch on and what's going to be a fad. But you see companies like Volkswagen and Mercedes, and other really established car companies, that are planning to phase out the combustion engine. That's as good a predictor as we could find for where that industry is going.

PUF: There have been some debates. One of them, about who should be paying for the charging stations. Another is if electric cars are for wealthier consumers at this point.

Elin Katz: Certainly the "who pays" is a big question, because a frustration for advocates is that electric ratepayers often represent a big pot of money.

It can seem relatively straightforward to pass some legislation that says electric consumers shall pay for this, whatever the "this" is. But that doesn't necessarily answer the question that I think about a lot, and most advocates I know think about a lot, which is how does this impact and how does this benefit electric consumers and the electric system?

Electric vehicles are really an interesting and a good illustration of the quandary, because electric vehicles have the potential to have a tremendous impact on the electric system as we look at consumers adopting more and more electric vehicles and charging them in their home.

And how do we have rate design around that? How do we encourage people to charge electric vehicles at night when the load is lower? Or do we want to encourage them, in states like California and Arizona that have a lot of solar, to charge their vehicles at 3:00 in the afternoon when there's solar peak?

There's also an impact on electric companies. We have seen declining consumption of electricity over the last few decades, which has been viewed as a good thing because we've implemented all kinds of conservation measures. But there's the unintended consequence to our electric utilities, a decline in the sale of their product.

In one way or another, that's going to impact the health of the company. If we're looking at a world where suddenly consumption is going to be increasing, then how does that impact the company, and, ultimately, our consumers? Good or bad?

PUF: The companies must upgrade certain parts of the distribution grid. The cars can be a source for battery storage, and incentives, and rate design.

Elin Katz: There are a lot of unintended consequences, and it's hard to implement one little part of it because there's all these other unintended consequences.

If we want to encourage people to use electric vehicles, then we do need time of use rates to maximize the value of the way they interact with the grid.

Or I should say we probably do. But many states don't have that. There are many constituencies who would be potentially harmed in certain circumstances, like time of use rates, so the rate questions become incredibly complex.

And that doesn't even address the fact that electric consumers seem like an easy source to tap for electrification and charging stations. What about the transportation sector, which is responsible for an enormous amount of the greenhouse gases that we are trying to adjust through electric vehicles?

Why aren't they paying for electrification through tolls or through some sort of surcharges on the transportation industry or the manufacturers?

We can't just put it all on the backs of the ratepayers because they're there and they're easy, and there's a lot of money associated with them. You really must think about all the different nuances.

PUF: NASUCA's at the peak of its influence, at its peak of its impact. How are you going to proceed on this issue? What are you going to do to look at the issue, analyze it, and participate in the debate with commissions and utilities and the auto industry?

Elin Katz: We have worked very hard as an organization and at our individual office level to increase the visibility, the influence, and what we hope is the positive impact of engaging with consumer advocates.

As you know, we have an annual meeting that coincides with the NARUC commissioner's meeting, and so that's one opportunity where we do engage with commissioners, and with the industry.

Our first ever CEO panel was at our conference this past November in Baltimore. That was moderated by myself as incoming President, and by John Betkoski, who is the current President of NARUC.

We're really trying to talk to the industry and to talk to commissioners directly, and one of the primary ways we do that is at our annual meeting.

Then we have a mid-year meeting. This year it's in June. In Minneapolis, where we are not coincident with NARUC. That's another opportunity where we engage in a lot of internal dialogue about what is going on; we will be having panels and bringing in experts.

That conference is open to everybody. Anyone can come and register. We're encouraging both industry and commissioners to come and engage with us on it.

PUF: How do you decide to move forward on various issues?

Elin Katz: NASUCA has committees that function all year, that are working on policy. A lot of our work is issue spotting. What are the unintended consequences of a revolution in the electric system?

And we've only talked about EVs. There are many other examples where electrification may potentially be advancing, and we need to think collectively as an industry about how to address it.

One of the big questions for me is do we plan or do we react? A lot of what we do in the electric industry, we're doing a lot of reacting, which is understandable in some ways because it's very hard to predict what's going to be the next big thing.

Storms are a great example. You have a tremendous storm or whatever weather event is happening that has an impact on the grid, you say, "Oh, my gosh. That was a really bad experience, how do we address that?"

And we do, and we've seen great improvements in storm response across the country. But it's hard to sometimes plan for things.

PUF: Do you have a vision of where electric vehicles are going? And NASUCA's role in affecting how that develops?

Elin Katz: We hope to continue to be part of a conversation. I hope it is a productive conversation, and not a lining up of people on their positions but rather a discourse, a dialogue, on how are we going to react to this.

What sorts of investments do we need to make? What sorts of redesign changes do we need to make? How do we do that, and should we be doing that now, or should we be doing that in five years?

Focusing only on electric vehicles, do we want to be pushing people toward EVs, or do we want to be reacting as we see them rolling in? I think these are important questions for anyone in the industry. Some people say, "No, absolutely. We definitely want more EVs," but I don't think that that's a universally held belief. 

There are very few universal positions that are held by everyone in NARUC or everyone in NASUCA or everyone in EEI. We want to be part of the process at arriving at the direction we go in.

But you asked what is my vision for where we're going. The best thing about predictions is they're always wrong, so I don't want to try to predict. But what I can see is that it's going to be different in different parts of the country.

I'll just give you an example from my personal life. I've had three hybrids, and I wanted to get an electric vehicle. I just got a new car in June. We live in Connecticut, and we have a lot of snowy winters, and there's not an affordable, electric sedan that's four-wheel drive other than the Tesla. You know, I'm a state employee. I'm not going to be buying the current versions.

On the other hand, if you're living in Arizona, it's a great place to have an EV. You have a lot of solar. You've got a lot of electrification in other ways, and you don't have to worry about whether your car's going to be able to get through the snow, or the efficacy of the batteries in cold weather.

If we see a lot of EVs in Connecticut, we're probably going to want people charging at midnight.

In California, they probably want people charging at 3 p.m. because they've got a lot of solar that they need to absorb the usage. It's going to be regional, and that'll be an interesting thing to watch.

PUF 2.0 Articles: Consumer Perspectives on Electrification

Consumer Advocates Look Forward — By Steve Mitnick with NASUCA President Elin Swanson Katz
EV Rate Research — By Erin Erben
The Tennessee Valley Customer — By Steve Mitnick, with TVA’s Jason Snyder