Electric Vehicles electric vehicle fleets

Published on August 1st, 2014 | by Tina Casey


EVs Are Win-Win-Win-Win For Utilities*

August 1st, 2014 by  

The green tubes are starting to cheer over a new white paper from the Edison Electric Institute, which makes the case that electric utilities can get a “quadruple win” by converting their existing gas and diesel fleets to plug-in electric vehicle fleets. That’s great except the last time we checked in on EEI, the organization was lobbying heavily against distributed solar power.

That’s why we put that little “*” thing up there in our title. So, let’s take a knee and floor our pom-poms for a couple of minutes while we take a closer look at the new EV white paper, Transportation Electrification: Utility Fleets Leading the Charge.

electric vehicle fleets

Chevy Volt by Al Pavangkanan.

EEI Casts Stinkeye Upon Distributed Solar

Distributed solar power is the wave of the future, but EEI is no big fan of it. The organization has been lobbying in favor of a new tax on the electricity that home solar owners sell to their local utilities via a Value of Solar Tariff.

EEI has previously drawn attention to the tension between distributed solar and the traditional utility model, and there’s no question that it’s a real thing, so there’s no mystery why EEI would give it the stinkeye.

For that matter, don’t be surprised if the micro wind turbine market gets similar pushback from EEI.

EV Fleets And Utilities

With that in mind, let’s take a look at the new EEI white paper.

First, let’s also clarify that we don’t think EEI is trying to pull the wool over anyone’s eyes with the report itself. The title indicates pretty clearly that the white paper is about utility EV fleets, not individually owned vehicles.

According to EEI, utilities get a quadruple payoff by transitioning to electric vehicle fleets:

According to the paper, electrification of the transportation sector is a potential “quadruple win” for electric utilities and society, and it will enable electric utilities to support environmental goals, build customer satisfaction, reduce operating costs, and assure the future value of existing assets.

Did they leave out dog bites man? Yes, they did. This is all old news, if you’ve been following the Obama Administration’s efforts to promote electric vehicle fleets, through the Clean Fleets initiative (part of the Clean Cities program) as well as the Workplace Charging Challenge.

Electric Vehicle Fleets: What’s In It For Me?

Where things start going off the rails isn’t the report itself. It’s the header for EEI’s press release about the report, “EEI Releases ‘Road Map’ to Help Expand the Electric Vehicle Market.”

The press release does clarify that EEI’s focus is on expanding EV fleets into the commercial and retail markets, not necessarily into individual EV ownership, but if you’re just skimming headlines for good news, you’re not getting the full picture.

Look at that in the context of EEI’s anti-distributed solar lobbying, and it’s clear that there is one key part of the EV market that the organization is definitely not interested in expanding, and that is the EV market for property owners who have access to on site solar power, aka distributed solar power.


That market has attracted a great deal of interest from Ford, for example, which has partnered with the home builder KB Home to incorporate solar powered EV charging in its new “net zero” models.

Ford has also introduced a connectivity product called MyEnergi Lifestyle, which is aimed like a laser at PEV owners with access to distributed solar power at home.

Standalone solar carports are also set for an explosion into the market.

Don’t get us wrong, electric vehicle fleets are totally a good thing, but in the case of EEI, what’s sauce for the goose is not necessarily sauce for the gander.

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About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.

  • TinaCasey

    Thanks guys for some interesting angles on this discussion. My focus was on the way EEI used the Clean Fleets initiative — not saying they just cribbed from it, just that they used it to promote themselves as the green good guys — which enables them to do a bit of greenwashing while they lobby against distributed solar. Your comments really rounded out the issue.

  • This issue with EEI really gets my goat. What also gets my goat is when science and technology writers don’t define acronyms right off the bat, i.e. Edison Electric institute (EEI).

    This really shows that aging industries like electric power utilities and corporation have been lazy for too many years. As easy money flows into the organization and is ripe for a mergers and acquisition, the first thing to cut is research, development and engineering. The next is preventative maintenance. The next is routine O&M. The thought process at the C level suite is, “why spend money on those expensive in house things, when profit needs to be plumped up for a better sales price.” We’ve seen a lot of M&A of the power generation and transmission over the past 20 years or so. I’m sure many who pushed for deregulation in 1992 (EPACT or Energy Policy Act) were not thinking about renewables and how the US could become a world leader throughout the supply chain for wind and solar. It may have been more about how Enron could become the privatized utility to the world. Remember Ken Lay?

    Now the market is changing due principally to renewables. And of course a concern about climate change. Instead of investing in house in R&D and engineering to enter new markets. Or to position themselves to get a piece of the emerging renewables market, they spend money on lobbyists, lawyers and PR. And of course, presidents from Illinois and former mayors’ brothers from Chicago.

    • Jim Young

      Remember Margret Thatcher privatizing and selling off British power plants. I’m intrigued by how they ended up being owned now by the French socialized EDF company.

      Good job Maggie, effectively selling your utilities to a largely socialistic foreign government owned corporation.

  • JamesWimberley

    The utilities are being rational: not a given for opponents of solar, but in these cases their actions – opposition to rooftop, support of Ev fleets – are perfectly logical.

    BTW, a value of solar tariff is not “a new tax on the
    electricity that home solar owners sell to their local utilities”. It’s a methodology for working out an FIT. It may work out worse for homeowners than net metering, but it all depends on the details, and especially on the integrity of the process. We’ve had long arguments on threads here on either side of the VOS issue – Trojan horse or olive branch? – but namecalling does not help.

    The most successful household solar deployment policy in the world, that of Germany 2000-2012, did not use net metering but a degressive FIT. This started at a multiple of the retail rate, and declined to under half of it. True, the aim was always very simple – unlike American VOS tariffs, which try to capture all costs and benefits: simply to maintain a single, low but reasonable return on capital invested. Recent governments have added the goal of steering the overall volume of installations, which lacks consensus support and is working badly.

    • Jim Young

      (IMHO) The rationality of the Utilities seems to have been in the interests of the major investors that did things like getting Jim Brulte to write the California legislation that did so much to destroy public utilities in favor of private profiteers. Now we have snarled up “ownership” problems and “super citizens” (a.k.a corporations, and their “investors”) that can sue governments for “lost profit potential” in ways the public (which used to own the utilities) has been almost totally blocked from. The lower tier insiders at SCE seemed to know where all this was headed (benefit very top echelon and private investors at our expense).

      For my money, the main outcome seemed to be them taking generating capacity down to avoid competition and getting rewarded for “stranded costs” while doing so.

  • Jouni Valkonen

    Electric cars are a win for utilities only if utilities are specializing on intermittent solar and wind power production. For high capital cost baseload providers (coal, nuclear and hydro), electric cars are a disaster, because electric cars are reducing the price difference between day and night electricity. Electric cars are typically charged using off-peak electricity.

    Natural gas will just go extinct, because it is no longer needed when there is sufficient levels of long range electric cars that can balance the peak and off-peak demand.

    • Bob_Wallace

      I think you’ve got that backwards. Utilities now deal with low off peak demand which means low prices. Always-on thermal generators make little, if any, profit. We’re seeing functional nuclear plants closing because they are losing money.

      EVs on the grid and charged at night create a new, profitable market.

      True, EVs with smart chargers will be a boon to wind and solar because they will be dispatchable loads that grids can use to manage and demand spikes.

      • Jouni Valkonen

        Today utilities (baseload providers) are generating profits on day time when electricity price is high. on night time they are asking price that covers variable costs such as fuel cost and operation costs. If electric cars together with solar panels and day active wind power are cutting the peak demand, then electricity cost plummets to the level that is sufficient for covering variable costs, but it is no way sufficient to generate profits and even capital expenses are hard.

        We see this already in Germany where traditionally hugely profitable utilities are now on the verge of bankruptcy, because solar panels and windmills are slashing the cost of peak load power. Electric cars are making situation even worse as they enable higher level of wind and solar integration into grid by providing easily dispatchable load.

        Therefore whole electricity markets must be rethought, because current system is not stable in renewable electricity economy.

        • patb2009

          the system will have to switch to TOU pricing, entirely

  • Jason Willhite

    It seems like all EVs would be a win for the electric company. The entire world’s energy consumption could be generally divided into two categories: energy utilities and automobile fuel. Both of which are annually worth billions. The more EVs on the road, the more the energy utilities start taking business from the oil industry. It seems like any incentives the energy companies could do to get people to switch to an EV would make sense. More EVs more electricity demand = more money for utilities = less money that goes to the oil sector.
    In short, if the payback looked good (I haven’t done the math), I would propose the electric utilities subsidize or provide financial incentives for consumers to purchase electric vehicles. The utilities then could potentially recoup the investment in increased electricity use.

    • sault

      Let me complicate your math homework even more…Oil refining uses a lot of electricity and natural gas too. Rough calculations abound on how much our oil refineries consume to make a gallon of gas or diesel, especially since each refinery is a little different and different grades of oil require different inputs and processing to produce fuel. However, many sources put the energy input to refine a gallon of gas at 6kWhs or so:


      A LEAF can go 20 – 30 miles on that amount of electricity, so the average gas car uses about as much electricity and natural gas as a LEAF does, except the gasser needs all that crude oil flowing into the equation to work as well. Oil refineries generate a lot of that electricity on-site, so utilities would not see a zero-sum outcome as EVs increase in market share.

      • Jason Willhite

        I think I understand what you were saying. It might not be an economic boon for utilities to start focusing on taking over the energy sector that big oil now controls – strictly transportation.

        My opinion was stemming from what I thought was a great article I had just read that really got me thinking about why utilities haven’t embraced or pushed electric vehicles more. Article can be found here
        I’ll take a look at that link on you posted…

        • Bob_Wallace

          That’s the energy input to refineries. I ran through the numbers for California refineries and they use only 0.16 kWh of outside purchased electricity. Most of their electricity is generated inside the plant from coal, natural gas and some of the oil itself. At least in CA the utilities would be doing more than shifting from customer to customer. There’s market to grab.

          Figure a gallon gas drives the average car 25 miles. It would take about 7.5 kWh to drive that far in an EV.

          • sault

            Yeah, I’d rather get my transportation energy from a grid that is getting progressively cleaner. Oil refineries, especially all the ones owned by Koch Industries, will be very slow to embrace renewable energy.

      • Interesting stuff. It got me thinking about refinery cogeneration. Many US refineries have cogeneration. Most or all are on the grid for at least backup. How this is distributed has to do with economics and politics. Here’s a cool analysis of this issue by International Association of Energy Economics:

        “On-Site vs. Off-Site Electric Power Supply in Refineries in
        the USA: The Use of Cogeneration in Texas and Louisiana”


        As indicated in the presentation above, how much electricity a refinery generates has to do with state utility regulations. Texas refineries produces twice the electricity as Louisiana refineries in terms of MW per barrels per day refined. They can sell the excess produced onsite to the grid.

    • Bob_Wallace

      The other reason utilities should be pushing EVs is that it would give them large dispatchable loads which would let them incorporate much more wind and solar without having to add storage.

      Imagine we’re now at the 200 mile range EV point in time. With smart chargers someone with a normal 30 mile daily driving pattern would set their “first thing in the morning” minimum to 100 miles. The utilities could charge up to 100 miles anytime during the night that worked best for them.

      Then if there’s a lot of extra power (wind blowing hard) they could fill up the batteries. With batteries full they could skip charging that EV for up to three days if the wind was down.

      • patb2009

        that and when transients come they can tap the EV for Voltage support

    • patb2009

      http://www.rogerwendell.com/images/energy/us_energy_use_2009.jpg Here are the numbers, transportation is about 25% of all energy, but, it’s a chance for the utilitiies to potentially double their market

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