Charge for less: An analysis of hourly electricity pricing for electric vehicles

Abstract

By motivating Electric Vehicle (EV) owners to charge their vehicles when power supply exceeds demand, dynamic pricing can improve system load shape and capacity utilization, reduce consumer costs, and cut pollution. We compare what perfectly rational EV drivers would pay to charge their vehicle on ComEd's hourly pricing program with costs associated with the utility's flat-rate energy price. We find that ComEd's hourly pricing program would have saved EV owners significantly over its flat-rate tariff in both 2016 and 2017, with cost reductions from 52 percent to 59 percent. Using price signals to manage charging is almost certainly one of the best (and cheapest) strategies to implement in order to achieve the traditional regulatory goals of a safe, reliable, and affordable service while advancing system efficiency, enhancing environmental sustainability, and facilitating the integration of distributed energy resources.