Utility Programs for EVs: Save 25-35% with Special Rates For Electric Vehicle Owners


You probably don’t think all that much about your local utility. It's one of those services that have become so reliable that most people take it for granted, like the sun rising every morning. 

When you buy an electric car, it's a good idea to give your utility some thought though, because most have special rate programs to encourage you to charge your car overnight, when there is plenty of spare capacity on the grid. The cost savings are substantial. Some utilities even offer rebates on residential and commercial charging equipment or public access to fast chargers, perks worth hundreds of dollars. 

Electric Car Insider spoke with Electric Transportation representatives from five of California’s largest utilities; San Diego Gas & Electric, Southern California Edison, Los Angeles Department of Water and Power, Pacific Gas & Electric and Sacramento Municipal Utility District. Locals will recognize these utility by their acronyms, which I'll use for the rest of the article, respectively SDG&E, SCE, LADWP, PG&E and SMUD.

The big savings for EV drivers come from switching from a Tiered rate plan to Time of Use, or TOU. It can save a lot of money – from tens to hundreds per month depending on where you live. Most people are familiar with the Tiered rate structure; the more electricity you use, the more you pay per kilowatt hour (kWh).

If it's not completely clear exactly what a kWh is, think of it as enough electric fuel to travel three miles. The national average price per kWh is about 12 cents. So a typical EV driver spends the equivalent to $1 per gallon of gas, compared to a car that gets 25 mpg. As you'll see below, that cost can vary quite a bit so buckle up and we'll carefully pick our way through the potholes. 

According to the US Energy Information Administration, an average dwelling uses about 900 kWh per month. At the national average cost, that's about $108. For medium to large sized households, it’s not uncommon to use enough energy to put you in the upper rate tiers where the cost per kWh is much higher – for example 36 cents per kWh in San Diego - and pay an electric bill of $200-$300 dollars per month or more. If you're adding your transportation fuel on top of that, you’ll pay the highest rate for that fuel, perhaps up to three times what you would otherwise. 

Residential electric rates vary widely throughout the US, from an average of 8 cents per kWh in Idaho to 33 cents in Hawaii. The total savings will differ by area, but the fundamental concept is the same: fuel your EV using electricity at the cheapest rate you can get. In areas with high utility rates, the TOU savings could be as much as half of your car lease payment. 

For example in Southern California, if you purchase electric fuel on top of your other household use and you're already in the third or fourth tier, you’ll pay about $0.36 per kWh. That pushes the fuel cost of driving a Nissan Leaf up 233%. Instead of paying a typical five cents per mile, or $5 to go 100 miles, you would pay 12 cents a mile or $12 to go 100 miles. At $3.50 per gallon the fuel cost for a gas-powered car that gets 25 mpg is 14 cents a mile or $14 to go 100 miles. 

Switching to a Time of Use rate allows you to charge your car overnight at a price closer to the lowest Tier rate. In San Diego, the "super off peak" $0.16 per kWh period is midnight to 5 am, which is enough to fully charge most cars from empty on a 240v circuit. In other regions, the Super Off Peak periods usually extend to 6 am. You will pay higher rates during the peak window, typically from noon to 6 pm, but if you’re at work and don’t run a bunch of appliances or air conditioning at home in the afternoon, your energy use during that time is minimal anyway. The rates in the morning and early evening are typically lower than Tier 3+ rates, so most people experience lower overall bills after purchasing an EV and switching to TOU. 

Sacramento residents have good reason to love their community-owned not-for-profit electric service. SMUD rates are much lower than the other major California electric utilities. There are only two rate tiers; $0.10 and $0.18. EV drivers get an especially good deal: off-peak rates are only 6 cents per kWh, so Sacramento EV drivers get electric fuel at the equivalent of 50 cents per gallon using the comparisons we referenced above. That’s just 2 cents per mile. As with the other utilities, peak and super-peak rates are higher than this overnight EV charging rate, so check the fine print and make sure you’re not planning to run your oven-cleaning function or an arc-welder in the garage workshop during the hottest days of the summer before you change rate plans. 

If you haven't already purchased your EV, it's a good idea to make arrangements to switch to a TOU rate plan in advance of delivery if your utility offers that option. Utilities may take a month or so to make the switch because they’ll wait for your new billing cycle to start before changing your service over to the TOU rate plan. 

One of the issues that frequently comes up in discussions about EV charging infrastructure is whether the electrical grid will be able to handle charging millions of cars as EVs become more popular. The definitive answer is yes, mostly because the vast majority of charging will occur overnight, when demand from other sources is about 30% lower. SMUD has performed sophisticated modeling of EV charging patterns out to 2030 and determined that there would be no substantial impact on the grid until at least 2025. Continuing offsets from energy-efficient lighting, appliances and better insulation could push grid upgrades back even further. Studies from other utilities and EPRI, the utility-funded Electric Power Research Institute, have come to similar conclusions. 

Several of the utilities have additional programs that EV drivers in those areas will want to know about. 

SDG&E provides complex charge station installations in multi-unit dwellings. About 60% of San Diego residents live in multi-unit dwellings, and the utility performs outreach programs to through groups like apartment manager associations to ensure that those customers can get access to overnight residential charging. The transportation electrification group also hosts classes and workshops for apartment managers, condo association managers and electrical contractors.

In Sacramento, SMUD has installed four Efacec DC fast chargers in locations around the metro area. Bill Boyce showed me the first of the chargers, located in a publicly accessible section of the utility’s downtown headquarters. The Efacec chargers support both CHAdeMO and SAE Combo connectors, so drivers of the Nissan Leaf, Mitsubishi iMiev, BMW i3 and Chevy Spark who opted for the fast-charge option will be able to recharge in less than 30 minutes at these locations. There are also 240v Level 2 chargers accessible to the public on the site.

LADWP has established a $2 million dollar fund to spur the adoption of electric transportation. The charging station rebate program is called "Charge Up LA!". Customers who install 240v Level 2 chargers get up to a $750 rebate on the purchases of EVSE hardware. Spokesperson Carol Tucker explained that LADWP's renewable wind resources are usually at their peak in the evening, so charging during the super-off-peak window results in lower transportation emissions.

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