Proposed PG&E Rate Change for Electric Vehicles

I was strongly opposed to the rate increase that the utility for Northern California, PG&E, proposed for electric vehicles last year.  (see my post October 12, 2011).  I was joined by about 75 other people who protested the change.

On May 9, 2012, PG&E came out with a new proposal.  While I wouldn't say that it is better than the existing rates, I would note that the total costs under the new proposal are not too much higher than the current total.  If PG&E will start publicizing this rate, which they have been reluctant to do for the existing rates, I think the change could end up being a positive one.

Here's a detailed discussion: (note that these numbers are revised as of 5/23 ane are different than my original post of 5/22)

The new rate is still Time of Use (TOU), which means that charging at night is still much cheaper than during the day.  Rates vary from 10 cents per kilowatt hour in the off peak to 20 cents in the partial peak, and to 36 cents in the summer peak, 27 cents in the new winter peak (more on this later).  The main difference is that the hourly rate will go from about 5 cents (counting some tier 2 use) to about 10 cents per kwh.  The new rate will have just one tier, while the old rate got more expensive with use above the baseline.   Offsetting the hourly increase, the minimum charges will drop from $11 to $4.50 per month.   Actually the main reason for the monthly decrease is that PG&E is installing smart meters for solar customers; the new meters will not require the $6.50 monthly meter fee in the near future, according to Jason King from PG&E. 

Let's see how the numbers come out for the new rate vs. the old in our case for one year: 
                                        Hourly charges              Meter Charges       Minimum Charges       Total
Current E-9A                         $25*                                 $78                      $54**                     $132
Proposed EV-A                    $150 (estimate)                   $0                       $54                        $150

*See previous posts for a detailed discussion of our electric charges/solar power production

So the new rate is higher by about $18 per year.  We could add two or three solar panels to our roof, and end up paying less to PG & E than we did last year because of the drop in meter charges.

What about the EV-B rates for people who choose to meter their car separately (typically without solar panels)?   Last year we drove 7,900 miles on the Volt's batteries, using an estimated 2,454 kilowatt hours of energy.  If we charged those all in the off peak on a separate meter here's how the new rates would compare:
                                         Hourly charges       Meter Charges         Minimum charges      Total
Current E-9B                          $125                        $78                        $54**                    $203
Proposed EV-B                       $242                       $ 18                         $0                        $260              

So for this case the new EV-B total would be $57 higher than the current total.  If we drove more, the difference would be greater.  For example if we drove 10,000 miles and used 3200 kwh, the current E-9B would cost $235 vs. the new rate of $332.

**Clarification:  It has taken me over a year to figure this out, but my new understanding (which is the reason that my numbers are revised) is that the minimum charge is factored into the annual "true-up" where all the credits (for high solar summer months) and charges (for low solar/high electricity winter months) are added up.  If the total of the credits minus charges is less than the $54 minimum charge, then the customer owes nothing additional.  If the total of credits minus charges is more than $54, then the $54 is deducted from the total of credits minus charges.  So in the calculations above, for the E-9A case for the new rates, there would be no balance due at the end of the year ($25 is less than the minimum charge of $54)  The total for year would be the sum of the meter charges plus minimum charges = $132.  For the E-9B case the total due at the end of the year would be $125 - 54 = $71.  The total paid would be $71 + $78 + $54 = $203.

There are still a few issues that I think need to be addressed.

1.  Why 10 cents per hour minimum?  As I understand it, PG&E has non-bypassable costs of about 5 cents per kwh and distribution costs of about 2 cents per kwh. Then PG& E adds 3 cents per kwh for off-peak generation for a total of 10 cents. My question is about the generation cost.

Eventually, I hope that millions of people will be charging their cars at night, taking advantage of wind power, which is plentiful at night.  When that happens, I can understand paying whatever the appropriate cost of wind power is.  However, right now, my understanding is that it costs as much to turn off the generators at night as it does to keep them running, so the nighttime cost of generation is negligible.  I think PG&E needs to document this 3 cents per kwh generation cost in the off-peak more clearly.

2.  Why a 30,000 customer limit?  Again, when there are millions of electric vehicle users, the nighttime prices will need to be adjusted.  But 30,000 seems very small. Why not set the limit at something more appropriate, like one million users.  This will give manufacturers and consumers confidence that PG&E is solidly behind electric vehicles.

3.  Why winter and weekend peaks?  The new rates introduce a winter peak to the pricing.  They also introduce a weekend peak.  In fact the weekend goes from off-peak directly to peak without any transition.  This abupt leap does not seem reasonable.  PG&E should document that weekend use is comparable to weekday peak hours.  Similarly, adding a winter peak requires justification.  I notice that the winter peak price is less than the summer peak, so this is appropriate, but more explanation of this new proposal is warranted, especially since the CPUC did not request any such adjustment.

Note that in my first draft of this post (5/22)  I asked, "Why a minimum charge?"  This was before I understood that the minimum charge is deducted from the total annual bill during the true-up period. 

One additional important point has to do with subsidies.  The true subsidy is for internal combustion engine (ICE) vehicles which produce 72% more CO2 than electric vehicles using PG&E's current grid.  Electric vehicles powered with solar panels reduce CO2 by 88% compared to typical ICE vehicles (since they still produce CO2 in the manufacture of the car and the solar panels).  Given that CO2 is causing global warming that threatens human survival, anyone driving an ICE car is creating significant costs for both present and future generations.  This does not even count the health costs from particulates and other chemicals caused by burning gasoline.  PG&E would do well to document these significant costs and get behind the urgent need to convert our transportation system to electric vehicles running on renewable energy.  People who buy electric vehicles today are subsidizing everyone else since they are creating much less pollution than ICE drivers.  Also, as early adopters, they help to bring the price of EVs down. California's state government is strongly supporting electric vehicles, so the CPUC policies should reflect that political will.

As I've stated before, I think PG&E is sitting on a golden opportunity to become the key energy supplier for the transportation sector of our economy here in Northern California.  I think the new rates are superior to the previous proposal, and are "not too bad".  Still I would like to see PG&E get more enthusiastic as a backer of electric vehicles.  It's good business for them, and essential for human survival.