In 2023, nearly 8% of new light-duty vehicle sales in the U.S. were for electric-fueled models, and, according to Cox Automotive, the company behind Kelley Blue Book, that proportion is expected to exceed 10% in 2024. While consumers move out of the early adoption phase, the entities that are figuring out how to deploy the charging infrastructure — and meeting customer expectations — are still playing catch-up.
While not always the owners and developers of charging infrastructure, utilities are increasingly a key player in a positive charging experience. Utility roles include setting rate structures and incentives that support accessible and affordable public charging, advising charging infrastructure and fleet owners, and studying the local market and system impacts.
Timing and Pricing it Right
Many utilities express concern over the uncertainty of what to expect in terms of demand and load patterns as more of the transportation sector electrifies. Areas with higher adoption rates, such as Austin, Texas, have so far had few impacts on their systems, as most charging to date has come from drivers of light-duty vehicles charging at home. However, utilities are now requiring more effort to plan for charging as more public infrastructure gets developed.
Cameron Freberg, manager for the electric vehicles and emerging technologies team at Austin Energy, said that the city has more than 40,000 EVs. Through its public charging network, the public power utility has seen some usage patterns emerge, including that the peak demand from public charging usually occurs in mid to late morning, and has been minimal during Austin’s traditional summer peak.
Part of what has helped Austin to offset any EV charging effects on the grid was a time-of-use program that incentivized residential customers to charge off peak, and a subscription program that allowed for unlimited charging on its network during off-peak periods. Moving forward, Freberg said Austin Energy plans to pivot to a more of a demand response-style program, where the utility can curtail residential EV charging during peaks if needed for customers enrolled.
The biggest change, said Freberg, is with third-party fast charging development. This could transform a parking lot customer, which maybe only used a few kilowatts for lighting, into a customer that could see demand of 10 to 15 megawatts with an array of fast chargers. Freberg said Austin Energy has heard from plenty of companies looking to own public charging infrastructure as well as fleet owners considering installing chargers.
The issue is with timing — while system planning teams might have a few years to figure out how to properly manage a large commercial building that would have a similar amount of demand, the timeline customers desire for installing EV charging can be much quicker.
Fortunately, Freberg said that some customers are engaging with the utility early on in their planning.
“That means the world to our distribution system planning teams to have that kind of information upfront,” he shared.
Freberg said Austin Energy now has a dedicated key accounts manager who works with EV charging companies to offer guidance and support and help level-set expectations on timing. The utility also helps prospective charging owners to understand the costs associated with setting up charging in different locations they might be hoping to acquire.
“They have to be looking at where there is electrical capacity available. [And asking,] am I going to be selecting sites where it is going to cost me three times as much to get the electrical installed as a mile down the street?” said Freberg.
He said that helping with the siting process is a very manual process, but something he hopes can be better mapped and shared via a customer-facing resource in the future.
Such support is also helpful to these customers, noted Freberg, as they might be companies that operate across multiple states or nationwide, and trying to navigate the distinct planning processes and timelines from 20 or 30 different utilities. Additionally, as both private companies and groups such as school districts receive grants related to EV charging, he said utilities will need to be mindful of how entities might be beholden to specific grant timelines that might be an added challenge.
He advised that utilities could develop guidelines for EV readiness that outline issues and expectations related to construction and installation of charging infrastructure to support customers without too much lift on the utility’s part.
Austin offers some rebates for customers to install charging infrastructure. Other than a demand-based rate for large banks of fast chargers, Austin does not offer special EV rates, in part because it is more complex to add a separate meter for customers just for charging.
For Austin Energy, Freberg said the public power utility made the decision to offer EV charging services to pave the way for adoption. “We knew if we put this infrastructure out, it might not [be fully used]. But we knew if we didn’t do this, it would absolutely limit the ability of our customer base to adopt them.”
“If you have charging out there with no one using them, it’s mildly annoying. But having vehicles without infrastructure for charging is far worse,” added Freberg. “These vehicles are coming, and that service should be there when they get here.”
Creating a Friendly Environment
In Tennessee, Memphis Light, Gas and Water is setting the stage for increased transportation electrification by being involved in various awareness and education activities and charging infrastructure efforts throughout its service area.
MLGW is part of Drive Electric TN, which has the goal of reaching 200,000 EVs within Tennessee by 2028. Reaching that goal would mean a big shift for MLGW and other utilities across Tennessee. Nearly a tenth of the state’s population lives within Memphis, and more than 13% reside within the surrounding Shelby County.
According to MLGW’s website, there was a 43% increase in the number of electric vehicles registered in Shelby County in September 2023 compared to the previous year, with nearly 4,000 cars registered.
Becky Williamson, strategic marketing coordinator at MLGW, said that the public power utility has not yet taken on a careful study of the impact of EV charging in its territory, since charging has to date been fairly dispersed across single level 2 chargers that can be hard to locate when not publicly accessible. However, “It is something we realize we are going to need to study as more chargers are getting installed,” she said, especially as more banks of fast chargers get deployed. “EVs are going to be akin to the widespread adoption of central air conditioning. We’re going to see that same sort of EV charging penetration at residences and businesses in the years and decades to come. So, the sooner that utilities can get engaged in researching their market and the technology, the better off they will be.”
MLGW is currently gathering data related to the potential charging impacts into the future, which will help inform its 20-year plan.
A new source of data for MLGW will be two new public fast charging locations, which are being developed in part through funding from a grant awarded in 2022 through the Tennessee Department of Environment and Conservation. The grant agreement specifies that MLGW will own and operate the locations for a minimum of five years. The utility is planning for four chargers at each location. “We thought if we were going to get into public-access fast charging, then we would get into it significantly.”
A few years down the road, Williamson expects that market conditions will probably mean that private operators will meet demand for public chargers. As examples, one of the Tesla supercharger stations in the area recently expanded, and other private operators have been inquiring about when different rate structures that could better align with fast charging demand will go into effect.
The rate changes include a structure that would eliminate demand charges at DC fast charging locations and instead impose a higher price per kilowatt-hour. “That’s one of those enticements that private operators are looking for when they review a market to see if it’s a good place for them,” said Williamson.
She said MLGW also recently got its power contract amended to allow for EV charging to be an exception to a rule otherwise blocking the resale of power by third parties. The change, she said, allows charging station owners to price by the kilowatt-hour, rather than by the minute, which is a preferable pricing structure for station owners and drivers alike.
MLGW is also hoping to expand its residential time-of-use rate, which will strengthen the price signals around home charging behaviors.
For residential customers, Williamson said MLGW focuses on correcting misconceptions about whether they need to pay to put a level 2 charger in at their house, or if their usual driving habits will be covered by using a level 1 charger overnight or other options already in the community. And while there are more individual drivers emerging, these customers have usually already learned a lot from talking with early adopters they know to understand their charging options.
Focusing educational efforts on commercial and business customers and potential fleet owners is helpful in supporting them to understand what the most economic and impactful choices on the community will be. Williamson said that the approach with customers looking to install level 2 chargers has changed from when MLGW started such conversations about 10 years ago, when “buyers weren’t really ready” for EVs.
Williamson said MLGW has been working with several commercial customers, a local school district, and government agencies through their planning phases as they consider what it would mean to transition to an electrified fleet. She said it is key that business customers recognize the need to involve the utility in the planning process as early as possible to work through the implications of accommodating charging infrastructure.
“Don’t wait to get all your plans made or until you’ve ordered your cars. Some of these projects are massive and may require electric infrastructure upgrades that could take more than a year to implement,” she said. This could include issues with acquiring upgraded transformers, which have faced a supply chain shortage in recent years.
It’s not just about planning for infrastructure, but Williamson noted that MLGW held educational events, including one for prospective fleet owners, to review information about charging technology options and the related tax credits and funding opportunities. She noted that educational materials available to American Public Power Association members could be helpful to use for such events or other planning purposes.
She suggested that utilities get engaged with groups such as clean cities coalitions and drive electric organizations. This helps connect utilities with the array of likely early adopters and other organizations involved in planning for transportation electrification to talk about the potential impacts of this demand and nuances of how charging behaviors can affect the grid.
Charging as Amenity
Silicon Valley Power, which serves the city of Santa Clara, California, has also not seen any major impacts on its system from transportation electrification yet, despite being in a state and an area with relatively high adoption. However, representatives from SVP said that the public power utility already has a different load profile than most, given its large industrial base. SVP said that residential customers only make up about 6% of its overall retail sales and that recent load growth has been largely driven by data centers.
SVP has been involved in various efforts to support local electric vehicle drivers, as well as multifamily housing and commercial customers looking to own charging infrastructure. SVP offers rebates for customers who install level 2 chargers. The public power utility also manages a network of chargers.
“SVP has added over 100 EV charging connectors throughout Santa Clara’s 18 square miles — in parks, community centers and other public access areas near multifamily housing; providing an amenity that increases park utilization and access to EV charging to residents who may not have access to charging at home,” utility representatives shared in a statement.
This network of charging connectors, including at city facilities, also supports the City of Santa Clara’s electrified fleet of vehicles, which SVP helped transition from older combustion-engine vehicles in an effort to reduce fleet operational costs and environmental impact. SVP integrates EV market research about customer awareness of and interest in buying EVs and customers’ barriers to EV adoption into program design, marketing, and social media.
For enterprises that want to deploy fast or public charging within SVP’s service territory, the utility has multiple efforts to ensure prospective owners are aware of the financial implications of this infrastructure through hosting educational workshops and by providing information on total cost of ownership and available incentives. They also offer an EV charging siting suitability tool and one-on-one engineering support about existing site capacity and help planning new service upgrades, if needed.
SVP also offers a technical assistance program on EV charging for multifamily housing and businesses. In the program, potential public/DC fast charger owners receive a custom planning report and one-on-one consulting from SVP throughout the permitting and installation process.
While SVP does not offer any EV-specific demand charge relief for customers who own level 3 fast chargers, the utility is exploring offering managed charging customer programs in the future.
