Held on November 14 at the Georgia Tech campus, the ACEEE 2018 National Convening on Utilities and Electric Vehicles was an opportunity for a variety of stakeholders in the transportation electrification sector (including the Georgia Public Service Commission, Greenlots, ChargePoint, Kansas City Power & Light, Rocky Mountain Institute, Nissan, and Lyft) to come together and discuss the rapidly-evolving electric vehicle (EV) space. During all-day discussions on the opportunities and challenges for different actors, five pressing actions emerged as opportunities for utility engagement. These actions included:
- Educating customers
- Modifying rates
- Optimizing the grid
- Building infrastructure
- Creating partnerships
First, utilities can support EV adoption by educating and engaging customers with simple and easy messaging on EVs to raise awareness across all customer groups. Utilities already have experience in customer outreach through outage updates and energy efficiency program marketing—experience they can leverage to take advantage of the opportunity to market EVs and build a stronger customer relationship that goes beyond a customer’s electricity bill. Transportation electrification can benefit all customers from decreased emissions, decreased maintenance costs, decreased fueling costs, and more. Various organizations at the National Convening discussed best practices for how to market EVs to customers, including:
- Butts in Seats – Offer test drives or short-term (at least one week) leases.
- Lead by Example – Electrify and brand fleets.
- Give EVs a Broad Appeal – Cater EV messaging to customer and politicians’ interests in the area, moving beyond “green” messaging when needed.
For example, Tim Echols from the Georgia Public Service Commission shared the difference between the state’s positive response to solar, which benefited counties across Georgia, compared to the state’s extremely negative response to EVs, which are perceived to only benefit certain counties and politicians.
Second, utilities should develop usable, understandable, and predictable rates for public EV chargers. Right now, demand charges make up a significant portion of public charging costs for both charger owners and users. The EV market will have a hard time driving (pun intended) ‘early majority’ adoption if it is more expensive to fuel an EV outside of the home than a gas car. Modifying rates to make the cost of fueling EVs competitive with the cost of gas will enable EV adoption by customers who need to charge publicly (e.g., residents at multifamily properties without home or work charging options, customers who are driving long distances). Utilities in California, New Jersey, and Minnesota have proposed a variety of rates that focus on right-sizing demand charges with charging station utilization, upon which other utilities can build. Rocky Mountain Institute (RMI) recommends a rate structure that starts the demand charges at zero and then increases the amount as charging station use increases.
A third action is for utilities to use EVs as a grid asset to balance demand and increase grid utilization. Right now, the majority of EV drivers charge their car at home after work during ‘peak hours’ when the demand for energy from the grid is the highest. Smart EV charging management is a unique opportunity for utilities to balance demand for electricity across the day which can lead to additional revenue, lower the cost of electricity for customers, and mitigate the impact of carbon-intensive plants that go online during peak times of demand. That being said, it is important for utilities to manage charging behavior in a manner that makes sense for their customers, which may or may not include a time-of-use rate (TOU). Kansas City Power and Light (KCP&L) pointed out that TOU pricing only lasted in the cell phone industry for five years. Whatever approach utilities choose to use should always include a focus on education and ease. For example, one stakeholder found that customers responded well to ‘happy hour pricing.’ Most importantly, utilities should implement these smart charging management strategies now, as the ‘early majority’ adopts EVs, to embed behaviors from day one.
A fourth action is for utilities to update buildings so that they are ‘EV-ready’ and/or own EV charging stations. As of now, there is no business model for profitable private investment in charging stations. Utilities have been making power plant investments that impact the next 50 years, not just the near future, and have the opportunity to do the same with charging infrastructure. Utilities can provide ‘patient capital’ while utilization rates are low and then allow the private market to take over once use of charging stations increases to a profitable rate. Furthermore, now and in the future, utilities can help serve low-income communities by building out and owning infrastructure for communities that cannot afford to purchase and install charging units.
Finally, utilities should seek to create partnerships with a variety of stakeholders to drive adoption efforts. There is an opportunity to take advantage of the nascent market now, building important partnerships with a commitment to long-term engagement. For example, when KCP&L found through their research that dealers were not selling EVs because they didn’t have customer-facing materials or encouraging commission incentives, the utility created educational materials and gave out EV incentives to dealers. Greenlots partnered with the City of Los Angeles to help the city figure out what infrastructure would be needed for city vehicles like refuse trucks and pursuit vehicles, and they have held discussions about how they might prepare for evacuation via EVs during natural disasters. Lyft partnered with Georgia Power to give an incentive ‘cash boost’ to EV owners to encourage them to join the platform as a driver in an effort to electrify the rideshare network.
Stakeholders at the conference all agreed utilities should play a role in EV adoption. Even if a utility isn’t ready or able to take all five actions outlined above, they can make huge strides by taking two steps: (1) educating customers across their service territory about EVs, as all utility customers can benefit from EVs, and (2) modifying demand charges to reflect actual charging impact on grid. As with any new technology, utilities should create space to support and allow this market to grow without defining how the market will look in the future.