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Driving Green in California Costs Consumers More -- in Electricity Bills


Public Charging Station for electric cars, courtesy Mitsubishi Motors

Public Charging Station for electric cars, courtesy Mitsubishi Motors

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A new Purdue University study shows that if California consumers don't look into alternative electricity-rate programs, the state’s tiered electricity pricing system could mean owners will pay some of the highest rates in the country to recharge their green cars.

The report comes just one month after the first deliveries of the all-electric 2011 Nissan Leaf and extended-range electric 2011 Chevrolet Volt to California consumers.

What a shock – figuratively speaking.

Try to wrap your mind around the problem. California was chosen to study, according to energy economist and lead researcher, Wally Tyner, because the state has long been at the leading edge of energy conservation policies and practices – aka the drive to be green – and plug-in hybrid vehicles (PHEVs) are expected to be popular there.

For those of you in non-tiered electricity bill states, in a tiered system, consumers pay a higher rate for any electricity they use beyond a certain point.

California has three rate tiers as well as a time-of-use system, which reduces the rate during periods of low use. That’s why electric utility companies encourage consumers to do laundry after 7:00 p.m. – when energy demands are lower (and, electric pricing).

2011 Chevrolet Volt

2011 Chevrolet Volt

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Guess when most PHEV owners will be recharging their vehicles? Right, after they arrive home from work, school, doing errands, whatever – dinnertime and later.

(Every electric car sold by a major carmaker, however, includes software that lets the owner plug in the car on arrival at home, but direct it to start charging at a given time--for instance, after 11 pm or midnight, when cheaper overnight rates come into play.)

“The objective of a tiered system is to discourage consumption,” said Tyner. “In California, the unintended consequence is that plug-in hybrid cars won’t be economical under this system.”

2011 Chevrolet Volt 240V charging station

2011 Chevrolet Volt 240V charging station

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Tyner added that almost everyone in California reaches the third pricing tier each month. Adding demand from a plug-in hybrid would ensure they’re charged the highest rate. The study found that introducing a PHEV to the household will increase average electricity usage by 60 percent.

Californians currently pay an average of 14.42 cents per kilowatt hour – which is about 35 percent higher than the national average.

The study said that a conventional Toyota Prius hybrid, which doesn’t require an outlet to charge, and a gasoline-powered Chevrolet Cobalt (no longer in production) are most cost effective in California.

In order for the Volt to be economical, oil prices would have to rise from less than $100 per barrel now to between $171 and $254. That’s even after factoring in up to $7,500 in federal and up to $5,000 in state incentives on the purchase of EVs and PHEVs.

Over the life of the vehicle, PHEV owners could shell out $10,000 more. As Tyner says, “Most consumers will look at the numbers and won’t pay that.”

2011 Nissan Leaf recharging

2011 Nissan Leaf recharging

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Comments (11)
  1. Being an electric vehicle driver myself, I can tell you that expenses are less than gas guzzling, despite the naive calculations of this piece. My car gets better than 250Wh/mile, but lets round up. At 14 cents a kWh and an 80% charge efficiency it still only costs me 4.4 cents a mile to drive. One would need a car with a 75mpg just to compete cost-wise. On top of that a fully electric vehicle enjoys a much less frequent maintenance schedule, as there are much less moving parts to break or lubricate.
    I'd love to see how they arrived at the calculations in this article.
     
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  2. Being an electric vehicle driver myself, I can tell you that expenses are less than gas guzzling, despite the naive calculations of this piece. My car gets better than 250Wh/mile, but lets round up. At 14 cents a kWh and an 80% charge efficiency it still only costs me 4.4 cents a mile to drive. One would need a car with a 75mpg just to compete cost-wise. On top of that a fully electric vehicle enjoys a much less frequent maintenance schedule, as there are much less moving parts to break or lubricate.
    I'd love to see how they arrived at the calculations in this article.
     
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  3. I agree with Dan. Even at the highest rates an electric vehicle is much cheaper to drive per mile than an equivalent gas car. Additionally most of the electric cars now hitting the market, including the Leaf and the Volt mentioned in the article, allow the owner to program the time of day (or night) that charging is done allowing their owners to get the lowest possible rates for energy consumptions.
    I would also love to see the assumptions and numbers in this "study." To conclude that a plug-in hybrid that also charges from the gasoline engine would increase household energy usage by 60% is ridiculous.
    For those interested the Purdue website has an article about the study here: http://www.purdue.edu/newsroom/research/2011/110113TynerHybrids.html
    The author's contact information can be found there.
    By the way, I'm a proud owner of an electric vehicle, also, and have my reservation in for a Nissan Leaf.
     
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  4. If Californians are paying more than 14 cents a kilowatt hour for their electricity the obvious solution for owning and charging an EV is a solar array on the roof. This should produce enough power in their sunny climate to keep the owner out of tier 3 power rates, plus reduce the amount of power they have to purchase each month.
    The media is way too quick to find reasons for consumers to avoid adopting the EV as the best solution for reducing air pollution, for exporting of dollars to OPEC and for strengthening our national security; and far to slow to promote creativity and new ideas for promoting the EV as the wave of the future.
     
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  5. If Californians are paying more than 14 cents a kilowatt hour for their electricity the obvious solution for owning and charging an EV is a solar array on the roof. This should produce enough power in their sunny climate to keep the owner out of tier 3 power rates, plus reduce the amount of power they have to purchase each month.
    The media is way too quick to find reasons for consumers to avoid adopting the EV as the best solution for reducing air pollution, for exporting of dollars to OPEC and for strengthening our national security; and far to slow to promote creativity and new ideas for promoting the EV as the wave of the future.
     
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  6. Thanks for your comment Dan, I was wondering the exact same thing, and also lamenting the lack of a cost per mile analysis in the article.
    A discussion with a friend came to the same conclusion, you'd need a pretty efficient car, at least 60mpg to equal the cost per mile of a 300wh/mile EV with today's gas prices.
    A google search of Wally Tyner also reveals he's a biofuels guy at Perdue. In the words of my friend; "So... I would not consider this a unbiased source."
    :)
     
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  7. I just did a bit of research online about the authors of this study. It appears that several of them have a vested interest in either bio-fuels or liquefied gas for generating energy. It certainly makes me wonder how objective the study is.
     
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  8. This article has a high FUD factor (Fear, Uncertainty and Doubt) due to an invalid assumption -- that a Californian isn't smart enough to change their electrical rate plan to a time-of-day/market rate plan. Per the original article from Purdue, California DOES have time-of-day/market rate pricing, but this was largely ignored in this article as well as the one from Purdue!
    So if you're in California you buy your plug-in vehicle, you switch to Real-Time/Market-Rate/Time-Of-Use billing and you charge overnight when it's cheap. No problem. Or is it? Now THAT would be really interesting AND valuable research to compare overnight historic real-time-pricing data numbers to non-plugin vehicle fuel costs!
    Or better yet, since you're in the Golden State, you leverage the governmental and state incentives not only for your plug-in vehicle but also throw up some PV solar panels... no fuel taxes AND a fixed cost for electricity: A clever person solves a problem, a wise one avoids it.
    M@
    Show OPEC where to stick it: Drive Electric!
    www.illinois.edu/goto/twike
     
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  9. Hello to all and thanks for the great comments. Actualy, Family Car Guide just reported the study, and really wanted this exact sort of discourse from readers. This editor would be the first one to buy electric if a solar array would work on the top of my house. After several solar companies surveyed the property, however, that won't work. Buying green is certainly important to dump America's dependence on foreign oil, and a whole lot of other reasons. Hybrids and EVs will become more prominent on U.S. highways, absolutely. FCG fully supports that -- along with higher fuel-efficient gasoline and diesel-powered vehicles, which aren't going away anytime soon.
     
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  10. The large "cost" of a PHEV in the study is mostly because they compare a $33,500 Volt to a $16,000 Colbalt and include the $17,500 difference as a PHEV cost. Plus they add in $12,000 to replace the Volt battery. Plus they seem to add in the extra cost of electricity without removing the cost of gas you don't have to buy.
    They do conclude that time-of-use pricing makes the PHEV "considerably more attractive" which is something this article ignored.
     
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  11. @Rick - good point. Time-of-use pricing, it appears, is where the rubber meets the road for PHEVs in the near-term. Thanks for the comment.
     
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