Consumer Perspectives on Electrification
Erin Erben is a Senior Program Manager at EPRI.
Expanding product lines and growing electric vehicles sales are driving electric utilities to create rate structures specific to EVs. The design of rate structures can consider various objectives: to encourage EV adoption, align with utility costs, and encourage charging patterns that harmonize grid operations.
EPRI recently reviewed and assessed publicly-available EV rates, to inform utilities and stakeholders in the establishing and modifying rate designs.
As part of this research, EPRI compiled from twenty-two U.S. utilities the tariffs for fifty-two rate options now in effect. Researchers also compiled assessment and decision documents issued by public service commissions or boards of directors.
Key findings with respect to rate designs include: (1) among rate options available for residential, business and public charging customers, residential options are most common, and public charging options the least common; (2) the most common rate structure is time-of-use, paired with seasonal differentiations; (3) monthly charges apply to all but one utility rate option; and (4) demand charges are not common, but voltage tiers or usage tiers apply to some rate options.
In reviewing commissions' decisions, EPRI found that rate structure assessments often focus on usage periods, cost recovery and ratepayer protection.
Specifically, commissions generally support time-of-use structures, which reflect cost differentiation and provide a price signal to shift electric consumption. An important aspect of commission approval is that rates demonstrate mechanisms to recover costs without shifting consequences of revenue shortfalls to other ratepayers. Low participation is a red flag for disapproval of EV program extension requests, indicating that the incentive to drive EV adoption is not effective, resulting in the potential for additional expense.
PUF 2.0 Articles: Consumer Perspectives on Electrification