Maryland state regulators recently approved, with modifications, two pilot programs proposed by Potomac Electric Power (Pepco) and Baltimore Gas and Electric (BGE) involving electric vehicles (EV).
The proposals were based, in part, upon findings and recommendations of the final electric vehicle working group report, which was filed in February 2012, the state Public Service Commission (PSC) said in its Aug. 12 order.
BGE’s pilot program proposal has a simplistic structure and entails a voluntary, residential, time-of-use (TOU) rate for select EV owners within the BGE service territory.
BGE claims, the PSC added, that its pilot program is revenue neutral, and charges no additional costs to the ratepayers. Of the approximately 400 EV owners located within the territory, the program is available only to those that are standard offer service (SOS) customers, that are not net metering and that have not bought renewable energy power from a third party.
Any qualifying EV owner can opt into and leave the program for any reason without penalty.
The pilot program is based on a whole-house rate with an on-peak pricing period and a lower off-peak pricing period to encourage off-peak charging, the PSC added. Since it is a whole-house rate, all electricity used by the participants during the on-peak period would be charged at the higher rate, not just EV charging. From June 1 to Oct. 1, summer on-peak period charges would be in effect from 10 a.m., until 8 p.m., on weekdays. For the rest of the year, winter on-peak pricing would be in effect.
The PSC also noted that BGE designed its pilot program to work with legacy meters and smart meters.
Of Pepco’s amended pilot program, the PSC said that participants may choose one of three residential sub-programs.
In one, existing Pepco residential customers who have EV supply equipment (EVSE) may choose either a whole-house TOU rate or a plug-in vehicle (PIV) rate. Those who choose the PIV rate will receive a second meter from Pepco used to measure only the electric usage for the EV charging, as well as a separate bill for their PIV energy use.
In another, existing Pepco residential customers who do not have EVSE will receive a Level II charging station and a second meter to measure only the electric usage for the EV charging. They will receive a separate bill for their PIV energy use.
In the third sub-program, new Pepco residential customers who do not have EVSE may choose a whole-house TOU rate.
Pepco has about 600 EVs in its service territory and as with BGE, Pepco’s pilot program will operate on an on-peak and off-peak rate schedule, with the on-peak period from 12 p.m. through 8 p.m. The pilot program is estimated to cost about $1.1m, with $610,000 attributable to equipment, installation and inspection costs, and $500,000 to administrative costs.
The PSC directed the companies to immediately implement their respective program, subject to certain modifications.
Both pilot programs have strengths and weaknesses, the PSC added. BGE’s pilot program is a perhaps overly simplistic approach that satisfies the statute in that its lower off-peak rate may incentivize EV owners to charge during periods of lesser demand. On the positive side, this no-frills program carries little to no additional costs to BGE customers, provides qualifying EV owners with one option for participation and allows customers to retain their existing meter and, subsequently, to continue to receive just one monthly bill.
Conversely, the PSC added, by having only one meter in an EV household, all household usage must be switched to off-peak in order to receive the incentive laid out in the program. Also, the pilot program cannot produce EV-specific data pertaining to charge time and duration or changes in charging patterns, leaving only speculative analyses of consumer behavior.
Perhaps the biggest drawback to the pilot program is that it is designed for use only by SOS customers, which may skew participation rates. It may also have the unintended effect of incentivizing customers to remain with or switch to SOS, which is contrary to the state’s current policy to promote a competitive marketplace for electricity.
The PSC directed BGE to establish a control group or, at a minimum, a survey of non-participant EV owners, as part of its pilot program to provide a much-needed baseline against which data can be measured.
Pepco proposes to pay the costs associated with the purchase, installation and inspection of the Level II chargers, and while that would be a benefit for the pilot participants, those costs would ultimately be passed onto their ratepayers and comprise a large part of the $1.1m budget for the program.
Requiring the customers involved in the purchase of the chargers to pay a portion of the cost will help to decrease the program budget, among other things.
The PSC directed that the purchase and installation costs of Level II chargers be equally paid for by Pepco and the pilot participants receiving the chargers, thereby reducing the cost of the program to ratepayers. Those customers will retain the chargers at the end of the pilot program, provided they participate in it for one full year, the PSC added.
The PSC directed Pepco, BGE and a working group to convene as soon as possible to establish the exact data points and metrics to be captured and reviewed throughout the duration of the programs.
The programs are to run through Dec. 31, 2014.
Commissioner Harold Williams dissented in part, saying in his statement that he concurs with the majority opinion regarding the approval of the BGE pilot program for PIVs provided that it is implemented as the company represents.
However, he disagreed with approving Pepco’s proposed demand management pilot program for plug-in vehicle charging, adding, “I do not believe our lawmakers intended for these programs to unfairly saddle all of Pepco’s Maryland ratepayers with programmatic costs that will directly benefit only the privileged few who own electric vehicles.”
Pepco’s proposal does that by, for instance, allowing 50 existing Pepco residential customers who do not have EVSE to receive a Level II charging station – subsidized by Pepco, at the expense of all Pepco ratepayers – plus a second meter to measure the electric usage for the PIV charging, while some of those who already own EVSE would receive a second meter to measure PIV use.
“The BGE pilot program, while not perfect, offers an approach that is revenue neutral and charges no additional costs to residential ratepayers,” he added. “I strongly believe that Pepco’s proposal should be rejected unless it is modified to do the same.”
In its order, the PSC said it disagrees with Williams’ view that the Legislature did not intend for some programmatic costs of the EV pilot program to be borne by the company’s ratepayers. “There is no doubt that the Legislature understood that a pilot program, which is designed to achieve an important policy goal, will have costs that are necessary to gain experience on the most optimal approach to achieve that goal,” the PSC said.
The pilot programs are designed to examine the effect of shifting EV charging practices to off-peak hours, which will reduce the need for additional infrastructure investments to accommodate increased load demands and reduce the potential for longer and higher peak demand periods. These savings, the PSC added, will benefit all ratepayers.
Pepco is a subsidiary of Pepco Holdings (NYSE:POM). BGE is a subsidiary of Exelon (NYSE:EXC).