The Electric Utility is “Enhancing” a Successful Managed Charging Program By Excluding its Primary Advocates
Like many major cities, New York City has set forth aggressive goals for encouraging EV adoption in order to improve air quality and mitigate the widescale damage of climate change. New York City’s Previous Commissioner of the Department of Transportation, Hank Gutman announced a plan in 2021 to build at least 40,000 public Level 2 charging stations and 6,000 DC fast chargers in the city by 2030. The DOT felt that this number of chargers would be necessary to support the city’s goal of switching 400,000 fossil fuel cars in the city over to zero emission vehicles by 2030. The Governor of New York State, Kathy Hochul also announced a plan to eliminate the sale of fossil fuel-powered vehicles in the entire state by 2035. And to get there, the EV charging infrastructure is going to need to evolve as will consumer behaviors.
While public charging stations are useful for apartment dwellers who may not have access to a garage or driveway, well over a million residents of New York City and Westchester County do have access to a driveway or garage and these folks will mostly be charging their EVs at home. In order to prevent strain on the electrical grid, Con Edison (aka “Con Ed”), the electric utility for New York City and Westchester, previously implemented an incentive program called “SmartCharge Rewards.” (I’ve written about this previously – Hands-On with ConEd’s SmartCharge Reward Program).
The SmartCharge incentive system, also known as a “managed charging program” was pretty simple: charge your car during off-peak hours and you’d get a cash rebate for each kWh charged during off-peak hours. The rebate amount wasn’t huge (5 cents per kWh), but it could add up over time, particularly if you drove your car frequently and usually charged it at home at night. In addition, participants in the program could earn a flat reward each Summer month ($20/month) if they avoided charging their car during super peak hours altogether and $5/month the rest of the year just for staying in the program and charging your car within the service area at least once every 30 days. Participants could also earn a $25 bounty for referring new customers to the program as well as $25 for occasional surveys. The system had a degree of “gamification” in that customers could track their progress in an online portal and earn badges for certain charging behaviors.
If It Ain’t Broke…
Apparently the SmartCharge New York program was fairly successful as Con Ed recently disclosed to us that the program saw over 20,000 customer registrations, which represents over 20% of eligible EVs registered in ConEd’s service area, as of 2022. But despite that success, Con Ed announced in late 2022 that the SmartCharge New York program was being suspended, pending a “redesign.” The new version of the SmartCharge NY program is expected to open to new customers in April, 2023. Some incentives are increasing: participants will get 10 cents per kWh when charging an EV off peak (midnight to 8 AM). If you can avoid charging your EV during “super peak” times during the Summer months (2:00 PM to 6:00 PM June to September), you’ll earn $35/month, with an additional bonus of $35 if you avoid super peak charging for the whole summer. But the biggest change to the program is the worst one: Con Ed customers on a TOU (Time of Use) billing plan are no longer eligible for the program.
TOU programs are popular with consumers who own solar power systems, because these customers can generate power during the day when rates are higher, but then use power at night when rates are lower. And if the solar customer has home battery storage like a Tesla PowerWall as part of their system, then they don’t even need to shift their electric usage to off-peak hours. Batteries can be charged from the solar panels during the day and from the grid at night, then power can be drawn from those batteries at any time, without tapping into the grid during peak hours. In short, customers who have invested in solar power and signed up for a TOU plan are exactly the ones most likely to purchase electric vehicles and understand the need to charge their cars off-peak. By eliminating these customers from the incentive program, Con Ed is effectively alienating their core audience, thereby undermining the goal of the program.
When we enquired about the reasoning behind this change, a Con Ed spokesperson told us, “SmartCharge New York was redesigned to reach the most people and include as many vehicles and technologies as possible. The main goal of the program continues to be to shift charging to off-peak hours. The New York State Public Service Commission said in its order for Approving Managed Charging Programs with Modifications, that residential and small business time-of-use (TOU) customers are ineligible to participate in SmartCharge. That is to avoid incenting the same charging behavior twice, as both the program and the TOU rate provide a monetary benefit for shifting charging to off-peak hours.”
When in Doubt, Pass the Buck
The New York Public Service Commission (PSC) is the government body which regulates utilities in New York state. I’ve read their “Order for Approving Managed Charging Programs for Modifications” (which can be found here) and there is no direct reference to TOU customers being ineligible for any incentive or managed charging program. The first reference I can find to Con Ed removing TOU customers from eligibility comes in Con Ed’s own MCIP (Managed Charging Implementation Plan) for the revised SmartCharge program, which you can find here. This is what Con Ed submitted to the PSC for approval of the revised program.
While I can understand the desire not to provide additional incentives as a cost-saving measure, the company’s claim that this redesign allows the program to “reach the most people” is categorically false. The new program penalizes those who have already shown the willingness to invest in solar power systems and shift their electricity usage to off-peak hours by preventing them from participating in the program at all: no per-kWh rewards for off-peak EV charging, no monthly incentives for off-peak charging, no ability to earn additional rewards by referring new users to the program. And with Con Ed’s electricity rates in New York City already 40% above the national average (23.1 cents/kWh vs. 16.1 cents/kWh), the company could certainly afford to continue to offer these incentives to TOU customers as long as its helps to further the program goals. Why shouldn’t TOU customers be eligible to earn these incentives as long as they meet the terms and goals of the program?
Following up further, the Con Ed rep told us that the restricting factor is based on the PSC’s guidelines for incentivization. The rep told us: “The Order states that ‘participation incentives paid to customers must be cost-based, and are not to exceed the difference between the default volumetric rate and a Commission approved time-varying or dynamic rate.’ Since customers who are on TOU rates are at the maximum level already, we are not able to offer them any additional incentives without additional approval.”
But there is a problem with this logic. ConEd’s current electricity rates for TOU customers are approximately 35.3 cents/kWh for peak usage and about 16.2 cents/kWh off-peak (based on my own most recent Con Ed bill). Con Ed also charges a penalty to customers with solar power systems of about .5 cents per kWh, which I won’t even get into here (don’t get me started!). These electricity rates are even higher during Summer months. With Con Ed’s current average non-TOU rate at 23.1 cents/kWh, non-TOU customers will be paying only 13.1 cents/kWh for off-peak charging, plus they will be eligible for up to $175 in additional rewards if they avoid super-peak charging for the entire summer. So the revised SmartCharge program is already providing a larger off-peak incentive to non-TOU customers than TOU off-peak rates. And yet, this plan was approved by the PSC. Continued inclusion of TOU customers in the plan would simply require approval from the PSC (which Con Ed did not seek).
So it appears that Con Ed itself (not the Public Service Commission) has decided that they will exclude TOU customers from the SmartCharge managed charging program moving forward. I’d speculate that the company believes that TOU users are already “hooked” and have enough incentive to charge their cars after hours. To me, this seems to be “penny wise, pound foolish” as many former advocates of the program or “SmartCharge Ambassadors” as they (we) were called, will no longer be eligible to participate, nor to refer new customers to participate in the program. And that’s sure to put a damper on the program’s proliferation and expansion. Ultimately this means fewer people will be charging their cars during off-peak hours – which is the actual goal of the program.
For me personally, I plan to switch back off the TOU plan to a standard plan once the new SmartCharge program goes live. Our electricity usage isn’t high enough to justify the meager discount that Con Ed provides for off-peak usage and the incentives of the SmartCharge plan would exceed the savings we would see on a TOU plan. And I’d recommend that other Con Ed customers consider doing the same. For those who are not TOU customers, or who are not ConEd customers at all, but who do charge their cars in New York City or Westchester, the Smart Charge program is worth looking into.
Update: After publication, a Con Ed representative reached out with these comments:
“TOU customers account for only 1 percent of the EV drivers in our service territory and did not represent a significant segment of the SmartCharge New York program. We expect the program to continue to grow due to its attractiveness, which we appreciate your acknowledging, and the increase in EVs on the road. Also, SmartCharge was not “suspended” at the end of 2022. Active participants who were eligible and had compatible equipment could continue participating without missing a day.”
Got an opinion on Con Ed’s move or on Managed Charging programs in general? Let us know in the comments.
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