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EV Rebates, Reform and The Grid

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Nevelyn Black's picture
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Nevelyn Black is an independent writer with a background in broadcast and a keen interest in renewable energy.  In the last few years, she transitioned from celebrity interviews and film shoots...

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  • Dec 10, 2020
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Electric transportation is encouraged as a way to reduce emissions but concerns linger regarding the impact it will have on the grid.  Now Vehicle-2-Grid technology (V2G) is squelching those fears.  Vermont’s Green Mountain Power (GMP) is the first utility to install and successfully integrate this new charging technology to the grid.  Using an electric fleet vehicle, the company put the technology into practice.  GMP installed a bidirectional Fermata EV charger at its Colchester, Vermont, office in October. The charger is now drawing energy from the company's 2019 Nissan Leaf during energy peaks. The vehicle is used by employees and then charged at the GMP office which is connected to the utility’s network of stored energy. GMP has also stored energy in home batteries like Tesla's Powerwall. For context, the Nissan EV battery holds about four times as much energy as one Powerwall, showing promise in the amount of energy storage that can be achieved using vehicles.  This live demonstration is proof  this technology reduces demand on the gird during energy peaks.  Encouraged by their recent success, GMP president and CEO Mari McClure said, "In 2020 alone, we estimate that the GMP and its customers have stored and dispatched 6.7 GWh of energy, equivalent to powering 550 homes for a full year. We have been able to shave peak demand this year by 177 MW, reducing US$3.2 million in costs for customers and reducing carbon by about 6.8 million pounds, which is like taking 660 gas-powered cars off the road for one year.”  With V2G, electric vehicles could become an asset to the grid instead of a liability.  "This is an exciting example of how EVs can help transform the grid…” said Jared Duval, executive director of Energy Action Network.

What other ways can this technology be used to improve our current infrastructure?

Energy storage experts, Fermata Energy, have teamed up with the City of Boulder to test the potential of vehicle-to-building technologies (V2B).  By installing charging stations with two-way electricity, V2B could provide the city with new ways to power commercial buildings and manage energy load.  "We look forward to testing this new technology and seeing the data to understand the potential of technology like this," said Matt Lehrman, the city's energy strategy adviser. "If we can reduce our peak demand and save money through this project, it might unlock new use cases for expanding the city's EV fleet. Not only can EVs help meet our climate goals and reduce air pollution, but they also might be a strategy to reduce operation costs and enhance resilience."

Perhaps Colorado state officials were also inspired by recent developments in V2G technology. Xcel and the state’s officials are encouraging EV sales with an ambitious rebate proposal.  Xcel’s proposed rebates would start at $4,000 for each new EV and $1,500 for a used EV, along with an additional $1,500 for income-qualified buyers.  This would be the most generous utility-offered rebate in the country, according to ClipperCreek, an electric vehicle equipment supply company.  While the proposal reflects commitment to clean air and clean energy, the utility is being criticized for collaborating with the PUC about the rebate and for the timing of their submission.  “It was filed at the last minute,” said Cindy Schonhaut, executive director of the state Office of Consumer Counsel.  On her concerns about the development and execution of the rebate, she asked, “Who gets the rebate? The customer or the car dealer? And who administers the program, Xcel, auto dealers?”  The details are still in the works but in response, Alice Jackson, CEO of Xcel’s Colorado subsidiary, said, “We collaborated with state officials to develop an innovative EV rebate in the transportation electrification plan that can help Colorado stay on the path to meet its strong carbon objectives during this challenging and difficult time for the state’s economy.” Keith Hay, director of policy at the Colorado Energy Office agreed that working with Xcel was necessary to make sure that any proposal could be implemented logistically and financially.  Not entirely convinced about the program’s benefits, State Sen. Chris Hansen said,  “There is no evidence in the record on how the rebates would work, who would get them.” Jackson continued, in a statement to The Sun that “while the timing of this presentation in the regulatory proceeding is a bit unusual, it shows the agility in which, at times, we must respond to market signals and economic realities.”

Utilities and their business models are described in various ways but agility isn’t usually at the top of the list.  Vermont’s Green Mountain Power has quickly embraced new technology that could change the grid forever.  Xcel could revolutionize energy storage by striving for one of the most ambitious clean energy incentives in the country.  Should utilities be praised for shifting gears or chastised for changing lanes?  What are your thoughts?

Discussions
Rao Konidena's picture
Rao Konidena on Dec 10, 2020

To answer your question at the end, "Should utilities be praised for shifting gears or chastised for changing lanes?", you have captured quite well that utilities and innovation are not usually mentioned in the same sentence ("but agility isn’t usually at the top of the list").

Since public utilities are regulated by the state public utility commissions, and the commissioners are appointed or elected (in some states) by a people's representative (Governor) - the people have a direct say in utility commission proceedings on EV rates and pricing. That is the first point I want to make.

The second point is, you have compared Xcel-Colorado to GMP-Vermont. Two different states, different political and regulatory structures, and regional transmission organizations. My point is if you had compared Xcel-Minnesota, for example, to GMP-Vermont - perhaps, the discussion and the questions you have posed would be different.

The third and final point, utility rate-making, has been a complex topic and continues to be. On top of that, we add a technology like EV that functions both as demand response (reduces peak demand) and as a generator (discharges energy when needed). We probably need a new accounting bucket for these technologies.

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