Can time-of-use rates drive the behavior of electric vehicle owners?
Ahmad Faruqui, Ryan Hledik, Armando Levy, and Alan Madian are economists with The Brattle Group. Comments can be directed to ahmad.faruqui@brattle.com. The authors acknowledge the contributions of Brattle colleagues Joe Wharton, Peter Fox-Penner, Phil Hanser, Hannes Pfeifenberger, Doug Mitarotonda, and Onur Aydin. The views expressed in this article are solely those of the authors and not those of The Brattle Group or its clients.
Recognizing the societal benefits of plug-in electric vehicles (PEVs), President Obama in his State of the Union speech set a national goal of putting 1 million PEVs on the road by the year 2015. Most benefits arise from a reduced dependence on imported oil and lower carbon emissions, in areas where marginal power generation comes from combined-cycle natural gas or renewable energy. Additional benefits arise because PEVs act as a bridge toward greater use of renewables—by building load during periods of high renewable generation output. Drawing from other work, we can estimate the present value of these gross societal benefits over the next four decades at $340 billion for the U.S. as a whole.1