Ratemaking and Regulation day two recap
By Matthew Schilling
COLUMBUS, OH (March 7, 2018) - Are electric cars green? After all, they use electricity generated primarily from fossil fuels.
According to Sierra Club attorney Joe Halso, the answer is yes. He cited data that in Ohio an electric vehicle’s carbon footprint would be similar to a traditional vehicle averaging about 44 miles per gallon.
Of course, there is more to electric vehicles, or EVs, than emissions.
PowerForward: Ratemaking and Regulation spent the majority of the day focusing on the benefits and challenges EVs pose to the electric system.
Phil Jones, executive director of the Alliance for Transportation Electrification (and former Washington state utility regulator) lead by framing the discussion on EVs. According to Jones, several factors are contributing to the growing EV market, including lithium ion batteries becoming cheaper and faster. Grid modernization is deploying technology that allows EVs to take full advantage of their strengths, supply chain improvements (Tesla Gigafactory, anyone?), and perhaps most importantly “the customer is engaged today like never before.”
A panel on market development focused on how the Public Utilities Commission of Ohio (PUCO) can facilitate EV growth. Jones cited that while Ohio is home to 11.6 million people, there are only about 8,400 EVs in Ohio right now, but showing positive signs of growth.
In fact, General Motors Director of Advanced Vehicle Commercialization Policy Britta Gross noted that 2017 EV sales surpassed 2016 sales by 26 percent.
With all these new cars on the road, where will the power come from? Gross cited studies GM has done that showed 78 percent of its customers commute 40 miles or less per day, a statistic which inspires EV design, but also gives clues to how to best design and locate charging stations.
Charging stations come in various forms and are used by drivers differently. For example, a level 1 charger (essentially your standard 120 volt outlet most Americans are familiar with) is the simplest, yet slowest way to charge a car. A level 2 uses higher voltages and charges faster, and a direct current fast charger will charge your car in minutes.
Almost all of the 11 speakers talking about EVs noted one of the major benefits EVs can provide to the power system is flexibility as it relates to drawing power off the grid. Several speakers cited data that the majority of charging takes place at home or at work, typically when a car is parked for an extended period of time.
AEP: How EV load can be spread overnight to reduce peak demand
American Electric Power Manager of EV & Technology Policy Dan Francis highlighted the benefits and challenges at-home charging presents. With today’s “dumb” grid, drivers return home from work and immediately begin to charge, thereby creating a large load spike to the grid.
However, if regulators and utilities can adopt rate designs to take advantage of time-of-use rates (aka changing power prices throughout the day), coupled with smart grid technologies, drivers and grid operators can leverage the flexibility and rates to spread increased that load throughout the night.
Spreading the load overnight, when power prices are traditionally lower, can reduce power costs for all customers.
As Electric Research Policy Institute (EPRI)’s Dan Bowermaster noted, most people would not mind if car stops charging for a period overnight, so long as you wake up in the morning and your car is fully charged.
Not only that, but “increasing load during off peak hours allows for better optimization of traditional grid assets,” noted Francis.
In order to advance EV markets, and have the appropriate charging infrastructure in place, the participants were nearly unanimous in agreeing the distribution utilities have a major role to play in owning and operating charging stations—apparently to the surprise some of the commissioners.
Sam Spofforth, executive director with Clean Fuels Ohio highlighted a few of the challenges Ohio faces for continued EV growth. He cited less-than-desirable availability of EV models in Ohio compared to other states like California and Georgia, perhaps due to many other states offering incentives to purchase EVs not offered by Ohio.
Another factor mentioned by Spofforth was poorly informed sales staff; a problem Clean Fuels Ohio has been trying to correct through dealer education programs.
PUCO Chairman Asim Z. Haque asked panelist how state commissions like the PUCO can facilitate EV growth. Gross responded by saying that having state commissions act as a convener of stakeholders to come up with policies is a great start. Jones added some type of formal planning study, similar to the way many states plan generation resources.
Commissioner Tom Johnson asked how advancing EV policy would affect customers of varying incomes. Gross and Spofforth were quick to point out that there is a bourgeoning used EV market offering affordable options for lower income customers. Many others cited that the flexible load of EVs, if properly spread throughout the day, will have a downward affect on power prices, further benefiting customers.
PowerForward veteran Jeff Taft of Pacific Northwest National Laboratory teed up the next discussion about energy storage as a distribution resource. For years much of the discussion about energy storage has been referred to as “behind the meter,” with the intent to solely serve that customer. That sentiment has been changing in recent years as storage has proven to be a resource to the grid itself, not just specific customers.
While noting that storage comes in all shapes and sizes, EPRI Program Manager Ben Kaun laid out some of those grid advantages. Storage can be a flexible resource that can charge and discharge its load rather quickly. This has obvious advantages in service as backup power during outages, but can also be used to shave peak load during times of high-energy use. Storage can also serve to balance voltage levels to maintain the service reliability customers depend on.
Kaun also noted some of the challenges of using storage on the distribution grid, “when you generate at the edge of the grid, it’s important to know you have upstream impacts.” He continued to note the need to analyze and plan.
Tim Ash, market director for Fluence cited a few examples of storage in action. An AES system in Chile was able to balance frequency on the grid when a traditional generator unexpectedly went offline, eliminating the need for local brownouts. Systems like that were able to save ratepayers in Chile an approximate $30 million per year, according to Ash.
Similarly, Arizona Public Service found using storage was about half the cost of upgrading a local transmission line that had reached its thermal limits, thereby reducing costs to its ratepayers.
The panel stressed that storage as a distribution system resource is still in its early stages and the much studying is needed.
Day 2 of PowerForward: Ratemaking and Regulation was filled with content that just simply can’t be captured in a few hundred words, so we encourage you to watch the archived footage on the PUCO’s website.
We hope to see you at PowerForward at 9 a.m. tomorrow morning!