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Electric Vehicle Tariffs From Utilities Gaining Traction in US

Thursday, Jun 25, 2015
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The electric vehicle (EV) market in the United States is growing rapidly. The market is now approaching a tipping point where EVs are becoming mainstream. Drivers are increasingly seeking special EV tariffs from their electric utilities for when they recharge their vehicles at home. For years, select utilities have experimented with EV tariffs and now their structures are becoming standardized. There are currently 28 utilities across 15 states offering EV tariffs, according to the fifth annual benchmark published today by Northeast Group, LLC.

"After several years of trial and error, utilities are beginning to learn what tariff structures work best for EV owners," said Ben Gardner, president of Northeast Group. "Several utilities that previously offered EV tariffs on only a pilot basis now offer full EV tariffs. The benefits of large overnight rate discounts for those charging EVs during off-peak hours are becoming clear to both EV owners and utilities."

Regulators are taking note. In 2014, Minnesota mandated that all large utilities offer EV tariffs. Following this regulation, Xcel Energy – the parent company of Minnesota's Northern States Power – added EV tariffs not only in Minnesota but also at its Colorado utility. This is an example of a positive regulatory spillover into another state, helping encourage EV market development. Currently, eight of the largest 15 utilities offer unique EV tariff structures, with these utilities offering steep overnight discounts for EV drivers.

"With gasoline cheaper than in years past, EV tariffs will be an increasingly important incentive," added Gardner. "Across the 15 states with EV tariffs, the average equivalent 'price per gallon' was $0.77. Using standard electricity tariffs, the US Department of Energy calculated that the cost of an 'eGallon' in these states was $1.39. The average cost of gasoline in these states was $2.81."

Northeast Group's benchmark found that in total, over 24 million utility customers across 28 electric utilities in 15 states had access to EV tariffs in the US. This number is set to grow over the coming years as EV sales continue to climb and regulators increasingly require utilities to have EV tariffs. The study is available at www.northeast-group.com.

 

prnewswire.com

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