US: Charging ahead: How EVs could drive down electricity rates

(ACEEE blog, 10 Jan 2024) With more than a million new EVs hitting U.S. roads each year, the grid can be optimized to accommodate EV charging needs while lowering rates for electric utility customers.

Electricity sales are increasing in many regions of the country, driven in part by growing power consumption from industry and data centers and, in some regions, by the energy needed for electric vehicle (EV) charging. While concerns are sometimes raised that EV charging will raise electric rates, three recent studies find that the load growth caused by EV charging can actually reduce electricity prices because EV charging can spread fixed electricity system costs over a larger volume of sales, modestly reducing per kilowatt-hour (kWh) rates. Each utility service area is unique, so utilities and state regulators should conduct their own assessments to see whether these trends apply to them.

New York State study

In April 2023, Synapse Energy Economics published a study on the investment and rate impacts of expanding truck electrification in the two largest utility service territories in New York State (Con Edison, serving the New York City area, and the portion of National Grid’s service area in Western New York). The study considered the costs of distribution upgrades and “make ready” programs that assist vehicle fleet owners with the costs of electric service upgrades so they can install and operate chargers for medium-duty vehicles (e.g., delivery vans and trucks) or heavy-duty vehicles (e.g., buses and tractor-trailers).

External link

ACEEE blog, 10 Jan 2024: US: Charging ahead: How EVs could drive down electricity rates