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California rates make plug-ins costly, economist warns

17 Jan 2011

Policies in the US state of California aimed at reducing electricity use and curbing emissions have inadvertently made new plug-in hybrid vehicles uneconomical, according to a US economist.

The state’s tiered electricity pricing system means Californians will pay some of the highest electricity rates in the US to recharge plug-in hybrid vehicles, according to Purdue University professor Wally Tyner.

Although California has a system that reduces the rate during periods of low demand, it has three electricity price tiers under which consumers pay a higher rate when their power usage rises.

Since plug-in electric vehicles consumer higher amounts of electricity than most other household appliances, their drivers will pay the state’s highest electricity rates, Tyner highlighted in a recent study.

Plug-in electric vehicles increase the average household electricity usage by around 60 per cent, according to the study.

Californians already pay 35 per cent higher electricity rates than the national average, at around 14.42 cents per kWh.

This electricity pricing regime means it would be more economical to drive a plug-in electric vehicle in Indiana – which charges a flat rate of around eight cents per kWh – than California.

States with flat or demand response electricity rates are more economical, Tyner’s study revealed.

States that employ cheaper rates for nightly electricity usage would also be more economical for people driving electric vehicles, it showed.

‘If you have time-of-use pricing, you have the opportunity to charge the car at the lowest available price,’ Tyner said.

‘The objective of a tiered pricing system is to discourage consumption. It’s meant to get you to think about turning off your lights and conserving electricity. In California, the unintended consequence is that plug-in hybrid cars won’t be economical under this system.’

Tyner carried out the studies with a group of Purdue researchers including energy economist Farzad Taheripour.

The findings of the study were published in Energy Policy journal.

Copyright © 2011 NewNet

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One Response to “California rates make plug-ins costly, economist warns”

  1. Daniel MacDonald says:

    While a good thing to keep in mind as specific PEV rate schedules, smart grid (including PEV smart charging) demand response programs and other policies are inspired by the CPUC and drafted by the utilities, this analysis seems to assume that the above efforts are not already underway. I would caution against this assumption. In light of CA’s relatively carbon-cleaner electricity mix and relatively higher VMT, the state of California and most CA utilities want to see wide and stable PEV penetration for the sake of meeting AB 32 requirements. We already have some TOU and DR rates in CA – what makes one think there won’t be custom ones for PEV owners? Or that even PEV smart chaging can’t be “de-coupled” from other household consumption?

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