Easy-to-use, customizable — SEPA and AMP partner on toolkit to accelerate EV planning for municipal and public power utilities October 4, 2018 | By Chris Schroeder In the coming years, nearly every electric utility in the United States will need to decide when and how to invest in strategies and programs for electric vehicles (EVs), not to mention whether they should electrify their own fleets. Large utilities in active EV markets — such as San Diego Gas & Electric in California and Austin Energy in Texas — are already pursuing multipronged EV strategies to support customers’ decisions to go electric and to start transitioning their own vehicles. EVs could account for 10 percent of all U.S. car sales by 2025. Source: istockphoto.com But, for a variety of reasons, many utilities — some of them municipal and public power authorities — have yet to begin such explorations. For example, EV adoption rates may be lower and sales slower in some utilities’ service territories. Still, these utilities will need to make strategic decisions about when to begin the required customer engagement efforts and program development. Should a utility judge penetration levels based on total numbers of EVs, or look at what happens if a cluster of EVs appears on a specific feeder, or both? What rate structures will send the most effective price signals to customers to charge their vehicles at times that optimize benefits for themselves and the grid? And will each utility have to reinvent the wheel to develop programs that reflect its market and customer demographics? The answer to that last question is, hopefully, no. American Municipal Power (AMP), which provides wholesale power and services to 135 members in nine Mid-Atlantic and Midwestern states, and the Smart Electric Power Alliance (SEPA) are partnering on a new toolkit that will let utilities model the economic impacts of EV adoption. In particular, the tool will analyze how different rate structures might affect customers’ EV charging patterns. The project is being funded with a grant from the American Public Power Association’s (APPA) Demonstration of Energy & Efficiency Development (DEED) program. “We are working with SEPA to develop a user-friendly tool that will allow users to tailor input variables to best represent their unique situations,” said Adam Ward, AMP Vice President for Environmental Affairs, Sustainability and Energy Policy. “The tool will provide an economic analysis corresponding to specific EV adoption scenarios. This broad capability will help our members make smart programmatic and investment decisions as EV options increase.” DEED is funded by APPA members, all of whom then benefit from the innovative projects chosen for development, said Michele Suddleson, DEED Program Director. “We love to have things created that are templates, widely applicable and easy to use,” she said. The first DEED grants for EV-related projects date back to the 1990s, Suddleson said. But with EV adoption ramping up in the past few years, the need for resources for municipal utilities has “been gaining more and more traction and interest,” she said. “It’s hit a level where, when the (APPA) board saw this application, they thought it would be a good tool for our members across the country.” EV opportunities and challenges Sales of EVs are growing rapidly. Bloomberg New Energy Finance estimates that the number of EVs worldwide will increase from 1.1 million in 2017 to 11 million in 2025, and 30 million in 2030. Adoption rates in the U.S. are also expected to ramp up quickly, analysts say, with EVs going from about 1 percent of all vehicle sales in 2017 to over 10 percent by 2025. As EVs become more common, researchers have also forecasted that annual EV energy use could rise from a few terawatt-hours (TWh) in 2017 to at least 118 TWh – and as high as 733 TWh – by 2030. SEPA’s recent study, Utilities and Electric Vehicles: Evolving to unlock grid value, looked at how 486 utilities are preparing for EV adoption in their service territories. Across all types of utilities, a full 75 percent were in the earliest stages of planning for EVs. At the time of the research — the fall of 2017 — 83 percent of municipal utilities were in the early stages of EV planning, compared to 47 percent for investor-owned utilities and 88 percent for electric cooperatives. (See figure below.) Stages of Utilities’ EV Preparation: By stage and utility typeSource: Smart Electric Power Alliance, 2018. N=486. “While some municipal utilities may not have the staffing or funding reserves to do EV planning right now, they do have a solid foundation for EV innovation,” said Erika Myers, SEPA’s Director of Research, who authored the report. “These utilities have flexible governance structures, which can make them more receptive to new or experimental EV programs. They are also actively engaged with community members who are interested in EVs, and, finally, they can iterate quickly through pilots and make improvements as they develop such initiatives.” At the same time, Myers said, the uneven pace of EV adoption across markets could make it more challenging for individual utilities to estimate when they will need to develop new programs or upgrade infrastructure to accommodate this growth. New Technology, New Tools AMP’s members represent a broad cross-section of the public power community. The toolkit will have the flexibility to provide a high-level economic guide to help users prioritize EV planning efforts based on their specific market conditions. For example, a municipal utility will be able to estimate the potential impact on its distribution systems if EV adoption goes up 10 percent, and compare that information to the impact if the increase is 20 or 50 percent. The toolkit will provide analysis of potential impacts and costs under three basic scenarios: Fixed rate tariff: This default, baseline scenario assumes business as usual, retaining a typical energy-based residential rate structure for customers using EVs. Time-of-use (TOU) tariff: In this scenario, the utility seeks to influence customer behavior through rates that incentivize EV charging during off-peak hours, such as overnight, to help mitigate potential negative impacts on distribution systems. EV managed charging: This scenario allows a utility or third party to remotely control vehicle charging — turning a charger up, down or even off — to better correspond to the needs of the grid, much like traditional demand response programs. The toolkit will also help public power utilities estimate the economic impact of adding EVs to their fleets – for example, taking advantage of potential lower operations and maintenance costs. Fleet electrification may also provide utilities with hands-on experience with the vehicle technology and charging infrastructure. “Our member municipal electric systems are facing important decisions regarding whether or not to incorporate EVs into their fleets,” Ward said. “Thanks to this grant from APPA-DEED and SEPA’s expertise, this tool will provide them with a framework to help inform their decisions.” The toolkit is scheduled to be complete by March 2019. A major challenge in developing the tool will be ensuring it provides information and analysis that are truly useful for such a broad range of public power and municipal utilities, each with unique traits for their service territory. To address this issue, the tool will be designed to allow users to customize data and scenarios, and leverage its economic modeling capabilities for new market conditions that may arise in the quickly evolving world of EVs. “Municipal utilities in general could become a real-time laboratory for EV program design,” Myers said. “Right now, utilities developing EV programs face far more questions than answers. The technology and charging infrastructure are advancing so quickly, the industry can’t necessarily predict how the mass market will respond to these new choices. For example, will customers prefer long-duration charging, like plugging in at home, or fast charging at central hubs, similar to gas stations?” “There will be different pushes and pulls for EVs in different communities,” Suddleson agreed. However, one of the key strengths of municipal utilities is that they “are very thoughtful about what’s going on in their communities; they are very responsive to community needs,” she said. Community engagement and the ability to iterate quickly will be central for municipal utilities designing programs and services that meet the needs of their EV customers. The success of such efforts could provide key lessons and best practices for all other utilities that are now or soon may be considering their EV options. Instead of reinventing the wheel, the toolkit could help utilities create new roadmaps that will take them and their customers to surprising and previously uncharted destinations. Two recent SEPA reports, both by Erika Myers, discuss how U.S. utilities are exploring new programs and business models for EVs: Utilities and Electric Vehicles: The Case for Managed Charging, available here; and Utilities and Electric Vehicles: Evolving to Unlock Grid Value, here. Share Share on TwitterShare on FacebookShare on LinkedIn About the Author Chris Schroeder Vice President, Advisory Services Chris joined SEPA in 2017 and currently leads SEPA’s Advisory Services team. In this role, he is responsible for helping SEPA members define a variety of programs, strategies, and solutions for distributed energy resources supporting the advancement of clean energy and modernized grid. Chris has over 20 years of management consulting experience across electric utility and renewable energy industries. Chris has also provided strategic consulting services for state regulatory proceedings, complex stakeholder facilitation services, utility tariff review and energy storage initiatives for utilities throughout North America. Chris has a Bachelor of Science in Physics and Mathematics from Willamette University and a Master of Science in Building Systems Engineering from the University of Colorado.