Study: Electric cars make utility bills cheaper for everyone

• Electric cars are helping to lower electricity prices in the US, according to a new study.
• They bring in a lot of revenue for utility companies, but don’t cost much to provide energy.
• Since utilities cannot reap infinite profits, EVs help push prices down.

owner of tram not just cut yourself carbon footprint – they are also helping to reduce utility bills for others, according to one recent research sponsored by the Natural Resources Defense Council.

Researchers at Synapse Energy Economics focused on three California utilities serving multiple households with Electric Car (more than 735,000 by the end of 2021). They compared the cost of powering those electric vehicles with the revenue generated by customers and found that between 2012 and 2021, electric vehicle owners made $1.7 billion in profits. purely for utilities.

So utilities and their shareholders are getting rich thanks to Tesla drivers? Not quite: Since utilities are tightly regulated and have revenue limits, they need to return excess profits to their customers in the form of lower rates. (In California and some other states, this is done through a mechanism called “revenue separation.”)

The key here is that even though EV customers use significantly more electricity compared to others, they are relatively cheap for utilities when considering the cost of energy generation, transmission and distribution. A large part of this is because motorists tend to charge their cars during off-peak hours — such as overnight — when there is plenty of grid capacity to spare and utilities can provide electricity at a fraction of the cost. cheap.

“Because EVs don’t add much to the cost of capacity, because they mainly charge off-peak, what they’re doing is using the grid infrastructure more efficiently,” said Melissa Whited, one of the EVs. study participants. the authors, told Insider.

In another reality, where electric vehicle owners consume most of their electricity during times of peak demand, they will need to make costly investments in power transmission and use expensive operating vehicles. money. “top” power plant. But in our practice, the opposite is true.

To arrive at the $1.7 billion figure, the researchers assumed that electric vehicle owners were billed at a higher rate than other customers, under California’s tiered pricing system that aims to increase prices for larger energy consumers. Results may be different in other regions, Whited said.

Other studies have reached similar conclusions. A 2021 report from MJ Bradley & Associates, a consulting firm focused on environmental issues, finds that more rechargeable electric vehicles in Nevada could reduce annual utility bills per household by $123 by 2050.

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