With the rollout of plug-in electric vehicles (PEVs), New Jersey’s utilities and regulators face a range of decisions about building the infrastructure to allow drivers to easily charge their cars, a task conventional wisdom says will primarily occur at home while owners are sleeping.
Even widespread deployment of PEVs is expected to have little or no effect on the existing electric generation and transmission grid. But the transformation of a transportation system relying on petroleum to one in which electricity from local utilities fuels vehicle raises a myriad of questions.
How much should the owner of a plug-in vehicle pay to recharge a car in a home garage? What incentives are needed, if any, to encourage installation of charging stations in the home? Could charging stations create localized problems for the utility’s distribution system? If deployment of electric vehicles is widespread, how is it possible to replace the tax revenues lost from decreased gasoline consumption, a primary means of funding transit improvements across the country?
Those and other issues are being debated here in New Jersey and across the nation, as electric vehicles become available. According to the Edison Electric Institute, which prepared a guide to help utilities plan and be ready for the introduction of plug-in electric vehicles by the end of 2011, they will be available in all 50 states.
“Those discussions need to be happening now,” said Chuck Feinberg, founder and chairman of the NJ Clean Cities Coalition, which promotes the use of alternative fuels. Feinberg also recently served as chairman of a special panel advising the state on its draft Energy Master Plan, a group that recommended the state move more quickly in trying to develop alternative-fueled vehicles.
At this point, the supply of PEVs in New Jersey is very small, according to Feinberg. “Vehicle manufacturers saw which states were being proactive and that’s where they are selling the vehicles. We missed out on the first wave,” he said.
Still, Feinberg said that the state needs to be more pro-active on certain issues, such as putting in place time-of-use rates, a mechanism that offers customers different rates for different times of the day. The rationale behind that approach is to encourage PEV owners to charge their vehicles at night, when demand for power is at its lowest.
While New Jersey has yet to decide what the rate for charging PEVs will be, other states are experimenting with a variety of approaches. In Michigan, DTE Energy has introduced a separately metered flat rate of $40 a month for unlimited PEV energy use, a rate that looks pretty good considering it costs between $40 and $50 to fill up your car these days in New Jersey at the local gas station. The downside is PEVs are more expensive to purchase than conventional cars.
Hawaiian Energy Company has established a three-tiered system for customers with plug-in electric vehicles. Its lowest rate is six cents below the normal rate charged electric customers per kilowatt hour, if the charging takes place between 9 p.m. and 7 a.m. If the charging takes place between 7 a.m. and 5 p.m., customers get hit with a rate two cents above normal rate. It’s five cents above the normal rate if the charging takes place between 5 p.m. and 9 p.m.
Public Service Electric & Gas (PSE&G) has not yet decided what it will ask customers to pay for charging their plug-in electric vehicles, according to Wayne Wittman, director of corporate strategy for PSEG Services Corp. “This is all in the discussion phase right now,” Wittman said.
There also are questions about what PEV owners will pay to refuel at public charging stations, likely to be located at malls, rest areas, and mass transit locations.
In the short-term, that may not be an issue, according to Erik Brownsword, a research analyst at the Edison Electric Institute. “Left to their own devices, vehicles will be charged at home, preferably at night, and at work,” he said. “It accounts for about 90 percent of the plug-in electric vehicles.”
The only issue about the power grid is whether the distribution system, which sends power from substations to homes and businesses, is up to the task. By most accounts, it is, although Wittman said there could be some localized issues if a number of residents in a neighborhood all buy PEVs. Brownsword said utilities can address that issue by identifying aging transformers in danger of being overloaded.
The problem, however, is complicated by the local utility having no idea of how many PEVs in any given neighborhood are being purchased, according to Wittman. To deal with that difficulty, the institute suggested utilities offer credits and rebates to customers to track PEV additions to their systems.
PSE&G is trying to deal with this issue by contracting with the Rutgers University Business School to come up with a buyer demographic survey of who is likely to buy plug-in electric vehicles.
As for lost tax revenue due to a decline in gasoline sales, the institute noted some states have proposed to recover this revenue from annualized “green vehicle” flat fees, universal Vehicle Miles Traveled taxes tracked through GPS systems or annual vehicle inspections, or a tax on PEV energy sales by monitoring annual utility bills.