Electric Car Utility Rate Plans: Top Five Rules

By · October 14, 2014

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kWh meter

One key advantage of driving an electric car is that it’s much cheaper to fuel than a gas-powered vehicle. It's a sure thing—that is, if an EV owner has done the necessary research about rate plans and charging times. But blindly driving forward, without thinking about the rate plans offered by your local power company, can lead to unexpected—and sometimes unfortunate—outcomes.

“You have to do the math,” said Reiko Takemasa, former product manager for electric vehicles, Pacific Gas & Electric. “People considering an electric car should do the research, but we can’t expect them to be math and science whizzes.”

Why is the calculus of home electricity pricing so tricky? Because those electrons—charged by the kilowatt-hour (kWh)—can be as low as $0.05 per kWh or climb as high as $0.50 kWh, depending on these variables:

  • Tiers (a system that raises the kWh-rate as you use more electricity)
  • Your location (because the baseline of tiers depends on your territory)
  • Whether or not your EV-charging has been isolated on a separate meter
  • Whether you’ve selected a round-the-clock flat rate or time-of-use pricing
  • The hour of the day you charge
  • The season

Beware: Trying to fully understand how each of these factors can affect your rate can short-circuit your brain. For every rule, there are multiple exceptions, special considerations, and alternative approaches. To make things a bit easier, I’ll take a stab at a few rules-of-thumb regarding EV rate plans.

What’s At Stake?

Before getting start with the rules, consider this inexact—but nonetheless useful— formula for seeing how much you’re saving with an electric car versus an internal combustion engine vehicle, offered by PG&E’s Takemasa:

Take the kWh rate and multiply it by 10 to get the approximate equivalent for a gallon of gasoline.

In other words, at $0.12 per kWh for electricity, it would be like paying $1.20 per gallon.

Nissan LEAF charging

How much does it cost to charge an EV? That depends on when you charge, where you are, and the rate plan you've chosen.

1Get help with a rate plan from your utility company.

Utility companies have a vested interest in supporting electric vehicle adoption and making sure you charge at times that support the efficiency of the grid. As a result, they have set up online tools and customer support centers to answer your questions. “Once you’ve made the decision to buy an EV, call the utility,” said Russell Garwacki, manager, pricing design and research, Southern California Edison. “The utility knows the rates and plans available to you. We’ll present those options, and then it’s up the consumer to make the final choice.” Garwacki told me that regular charging of an electric vehicle is like adding an entire house to the grid—so not only will the call help you determine the best rates for your situation, it will help the utility properly plan for a bright EV future.

2To get the absolute lowest rate for charging your EV, subscribe to a time-of-use plan, and only charge at off-peak hours.

If your Nissan LEAF or other pure electric car is your daily commuter vehicle, and you’re frequently replenishing the 24 kWh battery pack every day with half or more of the battery’s capacity, then you’re a great candidate for a time-of-use (TOU) plan. Instead of paying a flat rate around-the-clock, starting around $0.12 or $0.13 per kWh, the price drops down to around $0.05 - $0.10. Again, that’s if you set up your car to charge after midnight—when everybody’s sleeping and not using much power. (Remember, exact rates depend on a lot of things, and change all the time.)

3To subject yourself to the absolute highest rate, sign up for a time-of-use EV rate and only charge at peak hours during the day.

Making this mistake requires real effort. Here’s the background: The reason that utilities can charge less during those wee hours of the morning is that they crank up the price during the peak times of day—between 2 pm and 9 pm at PG&E; and 10 and 6 pm at Southern California Edison.

During peak hours on a TOU plan, the price jumps way up. If you have a big house full of power-thirsty appliances and systems and charge your EV on a daily basis, you could easily get pushed you into the highest tiers—where on-peak charging could climb to $0.40 or $0.50. Remember that means you would be paying the equivalent of $5 a gallon.

4Time-of-Use plans are better for almost every EV driver.

Unless you run heavy equipment during the day, and have absolutely no opportunity to shift your most demanding energy use to off-peak hours, then TOU is a good choice. (Another possible exception would be an electric car or plug-in hybrid owners that only drive short distances, live in small energy-light homes, only charge a few kWh per day, and is willing to pay higher rates in exchange for the flexibility to charge anytime.)

Even those customers can take advantage of TOU rates by separately metering the power for their electric car. “By and large, EV-adopters are more energy aware and environmentally aware, and they understand the value of off-peak charging,” said Garwacki. As a result, he believes, EV drivers are willing to adjust the time of charging, and thereby get a better rate (while helping the grid). Garwacki told me that most of SCE’s EV customers opt for single-meter time-of-use rates.

5Do a careful cost calculation before going with separate metering.

As just mentioned, EV customers have the option to install a separate meter that only tracks EV charging. The first important cost input when calculating whether or not to install a separate EV meter is how much it will cost for that installation (commonly completed by an electrical contractor). If your electric panel and current meter are near where you plan to charge your car, the expense could be just a few hundred dollars. But running conduit or digging trenches can push these costs into the many thousands of dollars.

Once you get an idea of how much it will cost to install the separate meter, then you need to determine how much you’ll save by keeping that car’s energy needs off your main meter. Southern California Edison estimates that an EV will add about 350 kWh of energy usage to your account in a typical month. That can quickly push you into the upper tiers, which could double or even triple your rate. (Depending on your utility’s rules, the separate meter will either establish a separate baseline amount of electricity used to determine your tier, or remove the tier structure altogether.)

Choosing a TOU plan, while staying on a single meter, can mitigate these higher costs—and help you avoid a headache and expense of separate metering. But if you believe that adding a new meter is going to be relatively easy and inexpensive, it’s worth taking the time to run the numbers to see if it’s really worth it (ideally with help from your utility).

Feedback and Follow-up

I hope these rules are helpful. Please share your experiences or questions in the comments below. I can reach back out to the experts at SCE and PG&E to get answers to any questions. And a great place to continue your research are the EV rate info and tools on utility websites, such as http://www.sce.com/pev and www.pge.com/electricvehicles.


· · 7 years ago

The take-away should be there is no “normal” utility plan. After looking at SCE options to my current tier plan using 10kWh/day for the house and 22kWh/day in the car, and factoring in the electricians quote to provide a separate meter, and a 5 year horizon at this location, it ended up cheaper to stay on tier plan and charge whenever instead of going TOU and charging off peak only. Who knew?

Still, saving ~$200/month over my gas vehicle is a win. Do your homework.

· · 7 years ago

I would also point out that you should also revisit your strategy every couple of years or so. This is because tariffs change and new services may have been added by the utility. The tariff I'm on was brand new when I selected it. I suspect it will be tweaked over time. My fall back plan is to add additional PV if the EV ToU rates go up too much.

· · 7 years ago

@KeiJidosha - That's exactly what I determined as well, attributing to the fact that both my wife and I work from home (and maybe use more energy during the day than most). But after talking with SCE, I'm questioning again if we should go to TOU. It's no sweat to set the LEAF to charge after midnight, and I know it's a good thing to do for the grid. I'm going to stay on flat-rate for another month or so, and try to establish a baseline, and then consider making the switch.

· Eric Anderson (not verified) · 7 years ago

Which is why I'm leasing solar panels for my house.

I dont have an electric car yet, but I'm planning on it. When the economy recovers I expect Oil to go up, way up. Perhaps as high as $10 a gallon. People will flock to electric cars, except there is one problem. We haven't added power generation in this country for years, (this is especially true in California). Tier 3 a 4 rates will sky rocket to as much as a $1 or more.

With my solar power I can keep my rates in Tier 1 and 2 even while charging my car.

· · 7 years ago

Solar is definitely a way to avoid having to do the math and still win. It can knock down your high tiers or keep the TOU peaks from affecting you.
The added benefit is that it won't increase in price, even if electricity rates increase.

· EvDriver (not verified) · 7 years ago

I checked and a time of use meter would cost me more then I pay now because of the low cost of charging my electric car off standard rate electricity (I do pay extra for Wind Source electricity, total of 12 cents per kwh), the fees for the 2nd meter alone would end up costing about what I already pay and I would still have to pay for the electricity!
If I had an electric water heater (instead of gas) then I could get a "saver switch" and get a $5 per month discount, the saver switch is a remote cut out switch that is designed for water heaters and A/C units so the utility can turn them off for 15 minutes at a time at peek use and my utility told me that I could put any loads that I wanted to on that switch, as long as a water heater or central A/C unit are also connected.

· · 7 years ago

We are on Southern California Edison's standard residential plan. Nothing special. We've been driving 1000 miles per month in the LEAF, roughly 800 of which are from charging at home, and our monthly electric bill is only roughly $20 more than before the LEAF. We've been able to stay in Tiers 1 and 2 thus far. It helps that we don't have A/C (don't need it here at 6100'), light with LEDs, and use Energy Star appliances. We heat with pellets and natural gas, and cook and dry clothes with gas.

· Anonymous (not verified) · 7 years ago

I have a solar array that keeps my electricity use in the Tier 1 range, which I believe is cheaper than any of the time-of-use or solar rate structures. One advantage to this is I can charge my car at anytime without a cost penality. This allows me to go out in the morning, recharge in the afternoon and go out again in the evening.

· Chris C, (not verified) · 7 years ago

Here in Georgia we have rather low electric rates -- around 11 cents/kWh. The utility then offers a TOU plan that takes the overnight rate down to 5 cents/kWh.

As you observed above, however, the midday rate goes up to about 20 cents/kWh, although that's for summer weekdays only. We've got significant air conditioning loads in the summer, and so I had to do some careful measuring of my usage amount and usage TIMES when I was considering the TOU rate.

I found that you should absolutely go with the TOU rate plan if you can satisfy these two conditions:
1. You have a programmable thermostat in your house and you can program it.
2. You're not at home during weekday afternoons.

If so, then you simply program your thermostat to ease up on the air conditioning a bit during the day -- just a few degrees is enough. I relax mine from 74deg to 79deg, and have it set to cool back down to 74 just before we typically get home.

For me and my EV usage, the TOU rate has resulted in a WASH for the summer months -- my bills are about the same either way. But once we get into the other three seasons, I expect to see BIG savings.

I actually think that this TOU rate works for anyone, not just EV owners, as long as you can satisfy the two conditions above. And our utility here says that anyone can get the TOU-PEV rate plan -- you don't need to actually own an EV.

I found out last week that only 8 people have signed up for the TOU plan in our state so far, but only a few EVs have made it here :)

· · 7 years ago

>> One advantage to this is I can charge my car at anytime without a cost penality. <<
Sadly, this is analogous to being able to drive a gas car and pollute the air without penalty. What I mean by that is, that charging during peak time - while not harmful financially to you directly, DOES harm us all. For my money, ALL usage should be on Time of use. It costs us more and pollutes more to use peak power. It should never come with no penalty.

· · 7 years ago

Since the beginning when I had E9 from PG&E until now (I'm on E7 with solar and EV) I have had the same issue: The tariffs are just too damn confusing and convoluted. And they keep changing. We need to figure out when the peaks are, and price the power accordingly. Then leave it there until review determines that things have changed enough to warrant jiggering the tariff. The number of odd TOU choices is just crazy. But maybe not quite as crazy as actually having a "flat rate" choice. As-is, the PG&E rates are about as fun as figuring out the tax code.

· Go Ducks (not verified) · 7 years ago

Where I live the Southern California Edison peak hours are 10am-6pm (as listed above) only for the whole house TOU plan. For the EV plan which has lower off-peak rates and requires a second meter, the peak hours are noon to 9 pm. So on weekends I can run a morning errand and charge back up before lunchtime. Work allows me to trickle charge as well.

Also look at what incentives might be available when looking at infrastructure cost. For example Los Angeles offers grants of up to $2K and I believe there is still a 30% Federal tax credit available for the first $1K in costs. I was fortunate and had all my infrastructure provided by my utility and car company at no cost, but you can bet that both entities got tax incentives for doing so, just as with those who have taken advantage of the EV Project.

· · 7 years ago

It appears to me there is a wide variation of base rates and TOU rates. The one from Rocky Mountain Power seems to favor the Utility much more than the consumer.

For me base rate is 8 cents per kwh for coal fired electricity. For an extra 2 cents per kwh I can buy wind power from the Blue Sky program and I do this for 100% on my use.

From the link above if I were on TOU I could get a discount of 1.4 cents to charge at night. However if I then needed to charge during the day I would have to pay an extra 4.3 cents to use on peak energy. For me this is not worth it.

If the RMP would give me a discount for off peak, the same as the penalty for on peak usage, then I would do it for sure, however this is not the case by a long ways.

I would be very interested in hearing what the rates are from other utilities for on peak vs off peak usage.


· · 7 years ago

Here the flat rate service is 13¢/kWh. TOU is 6.5¢/kWh off-peak and 21¢/kWh on-peak. Peak times are 7AM to Noon and 5PM to 10PM.

I asked them about it because I was wondering whether they wanted me to charge an EV overnight or during the day when my solar panels are working. Unlike some other places, solar doesn't provide power during peak usage here because there is no AC use. Heating tends to be greater in the mornings and evenings, same as cooking, lights, TV, and the like.

I am leaning toward charging at midday on sunny days so I can use my solar (and that of my neighbors) directly.

TOU would not be cost-effective for me for my normal usage. But with an EV doubling my consumption, I'd have to give it some thought because charging off-peak would be easy. But once I get my solar doubled, probably in 2013, the question would likely be moot. At present, however, my highest mid-winter power bill was $32, of which $9 was the service charge, so TOU really isn't worth bothering with.

· Norbert (not verified) · 7 years ago

Once EV electricity consumption reaches amounts noticeable to the utilities, I'm sure they will change the rates to make it so that off-peak will be more economical, in those cases where it isn't already. Simply because that's what they'll need to do to avoid having to make unnecessary investments.

· · 7 years ago

> For my money, ALL usage should be on Time of use. (darelldd)

That would make more sense. I suspect that flat rate residential plans exist mainly for historical reasons, since usage has been easier to meter that way. Of course, today's "smart meters" make TOU easy.

In our case, since I work at home most days and have computers on, there is no incentive for us to switch to TOU. Installing a second meter for the EV would be more trouble than it's worth in our case. That said, we try to do most of our EV charging during off-peak hours just to be good citizens (although our overall electricity usage even with the EV is below average). We'd like to add PV, but that will have to wait for another year.

· Victor (not verified) · 7 years ago

Great summary. I'm still torn between time-of-use and my current flat rate. I do charge only at night, and run washer/dishwasher/etc only at night, but I have a family at home during the day (A/C in the summer, computer, TV...). As it is, my bill has gone up only $45 since I got my EV, so I'm worried about rocking the boat. If I switch to TOU, and find it was a mistake, I am locked in for a year no matter what.

@eric, Good luck with the solar panels. I'm entertaining a lease as well!

· · 7 years ago

@darelldd "It costs us more and pollutes more to use peak power. It should never come with no penalty."

It is not so simple. There was a detailed study published a while back about marginal pollution because of EV charging in various regions & times. Since coal is the main source at night and NG the main peak power source in some areas, pollution was less at peak power.

In WA, though - night charging would be good mainly to use all the wind energy that goes waste.

· · 7 years ago

@EVnow -

Ah. Statistics. Let me parse that.
Coal is burning 24 hours/day. It burns as the base load. If the energy isn't used, it still burns. So coal is burning at night, and we plug in an EV. So some would call that a "high pollution" charge - but it isn't. Coal is also burning during the day. But all the OTHER stuff is consuming that generation during the day, so when we plug in a car, we add NG peaking plants. If we assign the NG generation to the EVs then YAY! That's a clean charge right? No coal was used to charge the EV because all the businesses and AC units were using the coal power before we plugged in. Obviously it is way better to charge during peak time!

You see the problem, I assume... You don't think that the coal base load plants are shut down during peak times do you?

Coal is dirty. Coal plus NG is dirtier than just coal. I agree that the incremental pollution from the NG peaker plants is less than the coal. But we can't pretend that adding NG generation is good for anybody.

When we turn on more generating plants that burn ANYTHING, we are polluting more than if we didn't fire up those plants. If we don't add to the peak, then some peaking plants don't need to be run. If we charge during the "base load" times... that is the most efficient, least polluting and cheapest way to do it. Even if it means we're only burning coal at those times.

I agree that it isn't as simple as I first stated it. But simple or not, the basic premise is still valid. It is far better to charge during off-peak times.

· · 7 years ago

Coal plants can be throttled down so they don't produce as much electricity at night. They just can't be shut down entirely. I'm not sure what percent of maximum power they need to maintain but it really is quite low.
The night-time benefit is more an economic one than an ecological one since no new plants need to be built to produce electricity at night, they can simply throttle up.

· · 7 years ago

@ ex-EV1 -

Yup, I get all that. For brevity I'm simplifying the examples of course. And I still maintain that it is dirtier and more expensive to charge during peak times in *general*. I can't be the only one who realizes this? Is there somebody who can demonstrate that this is not so?

· · 7 years ago

@darelldd "Ah. Statistics. Let me parse that."

Well, he guys who ran the simulations aren't idiots. You should read the original research before commenting.

· · 7 years ago

I officially and uncharacteristically give up.

· · 7 years ago

It seems that we are splitting hairs here. I find the economic argument in favor of charging at night compelling enough. It does seem that having to build fewer power plants would be desirable for environmental reasons as well.

That said, it could be most ideal to charge directly from a rooftop PV array. One friend with PV suggested that it would be nice if he could feed the DC from his panels directly into his LEAF's CHAdeMO (quick charge) port. Perhaps one day...

· · 7 years ago

I agree that we're probably splitting hairs here, especially when an EV is still pretty much a win from an environmental, sustainable, and national security perspective as compared with ICE, whenever it is charged. Doing so with better economic or environmental power sources just makes it all the better.
Regarding abasile's friend's PV: I'm not sure that feeding DC directly into a CHAdeMO plug is that much better than putting AC in since a DC-to-DC converter is likely to be needed anyway. Modern, high efficiency DC-to-DC converters just convert DC into AC and then back into DC again, not too far from your PV inverter feeding the AC-to-DC in your car's charger.

· · 7 years ago

Yes, DC to DC conversion likely would be needed. If you have to convert to AC anyway, I agree that you might as well just use the PV inverter and go through the J1772 port. Even then, there could be significant efficiency advantages, though not necessarily economic advantages, in charging directly from one's PV rather than going through the grid.

· · 7 years ago

On using the CHAdeMO port compared to using the J1772, there is one thing that is overlooked here. On the Nissan Leaf the J1772 port is limited to only about 15 amps. The CHAdeMO port is designed to take about 100 amps at a time.

The 15 amp J1772 port on the Leaf is one of the few weak points of the entire car. Now consider that every KOA in the country has a 240 volt 50 amp outlet. These KOA campground outlets could be used to charge our cars at 3 times the rate of the stock Nissan J1772 port.

It seems like it would be possible to build an external charger that could input 240 volts and 50 amps and convert that to a DC output that could be feed into the CHAdeMO port.

What would Leaf owners be willing to pay for a charger that is 3 times faster than the factory unit ?


· · 7 years ago

That is a good point that I've thought about a lot. I use RV parks when I take roadtrips in our Tesla Roadster and find the 40 amp charging to be fairly useful. I prefer 70 Amp dedicated charging stations but there are only a few dozen of them in the wild.
In my opinion, however, the Leaf's paltry range makes this option less useful than with the Tesla. It is easy to find RV parks every 100 to 180 miles to use with a Tesla Roadster but with the leaf's ~80 mile range, you'd want to charge it about every 60 miles.
At home or work, however, this would provide a faster charging option that would allow the Leaf to be used for more weekend errands than it supports today.
I would definitely consider a fast CHAdeMO charger that would handle multiple inputs but probably wouldn't invest too much because I assume my next EV (probably a Tesla Model S) is going to handle native 240v/40a charging.

· Norbert (not verified) · 7 years ago


As far as I understand those studies generalize very specific situations somewhere. There are other studies which compare utilities very close to each other, and due to having a different set of power plants, there may be cases where one uses more coal during night just because it is a bit cheaper for them in that very specific situation, even though they could use NG if they wanted to. Although that cannot be generalized, some use those specific situations as arguments as if that were typical and unavoidable. It is certainly not unavoidable, as Darell has explained very well.

· · 6 years ago

PG&E Advice Letter 3910-E has suggested major revisions to their E-9 Time-of-Use Residential Electricity Rates. While the proposed changes simplify the electricity rates by effectively removing the tier structure and placing a single price for peak hours, partial peak, and off peak hours, they also increase the baseline rates to such a degree that many customers may be better off charging at their convenience under non TOU E-1 than switching to TOU E-9a. Based upon PG&E's own calculations, 75% of the current E-9a customers and nearly all E-9b customers would see an increase in price, whereas the heavy electricity users (top 25%) would see a price reduction. Non-tiered pricing will appearing simple offers no incentives for energy conservation and in this particular case does nothing to increase incentives for more customers to adopt electric vehicles.

Personally, I have sent in a protest letter to the CPUC electronically as indicated on the advice letter and would urge more people to look into this issue more carefully before the protest deadline on October 17th.

· Marathon Energy (not verified) · 6 years ago

It makes sense that utility companies are eager to help. They are the experts because they have dealt with the situation before. Also, because it is such a significant increase in energy they want to keep your business so any good utility company will work with you to figure out the best plan.

· GSP (not verified) · 6 years ago

Don't forget that charging based on departure time not only is good for the utility, but also minimizes the time your battery spends at high state of charge, which helps increase battery life.

I program my Volt to finish charging at 5:30AM. This provides off-peak rates, and in the winter the battery will be warmed up, as well as fully charged, when I leave.

A pure EV will charge to a higher SOC than the Volt, and should see a battery life benefit also.


· · 4 years ago

I bought and drive what may have been the first (factory) Prius Plug-in hybrid in San Diego. That and my being an automotive journalist (my recent, weekly AutoMatters columns are archived at:
http://www.delmartimes.net/category/columns/sponsored-columns/AutoMatters/) prompted me to try to understand what it would cost to charge EVs in San Diego. That proved to be a very time consuming and utterly fruitless effort, when I contacted San Diego Gas & Electric. I tried hard to find definitive answers but there were none. There are too many variables. To make things worse, they told me that if I changed to another plan I would have to stick with it for quite a while, which could have ended up costing me even more than at my residential rates.

As other commenters and this article state, the situation is in a perpetual state of flux. I ended up just keeping my standard residential rate plan and using my car's built-in timer to recharge after 1AM, as my bit to not unnecessarily add to peak electricity usage, even if it does not cost me less to do so.

It sounds like PG&E and other utility companies are somewhat more helpful in this regard than was SDG&E.

Perhaps solar is the way to go...

· · 4 years ago

Why would I multiply the kWH rate by 10 to calculate the equivalent to a gallon of gas when the DOE says there are 33.8 kWH equivalent in a gallon?

· · 4 years ago

@srl99 - The multiply X 10 is high-level rough rule-of-thumb guide. So, if you are paying $0.20 per a kWh of electricity, and wanted a quick read on what that means compared to a gallon of gas, you could say "about two bucks a gallon." A calculation based on exact amount of energy, and relative efficiencies of ICE versus EVs, is complicated with a lot of variables. So, if you want to grab a reasonable number very quickly, I think the 10x number is a cool method.

· · 4 years ago

@srl99: "Why would I multiply the kWH rate by 10 to calculate the equivalent to a gallon of gas when the DOE says there are 33.8 kWH equivalent in a gallon?"

Because equivalent energy is very different from equivalent cost. (Same answer as Brad Berman's but shorter.)

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