Electric Vehicle Adoptions among CT Zip Codes at
Flat and Off-Peak Electricity Rates: County Impacts
REMI Seminar
Lake Tahoe, 12 October 2012
Peter E Gunther
Senior Research Fellow CCEA
Introduction: Zip Code Data
• Yearly Vehicle registrations by type 2005-2009
• Aggregate Family Incomes
• Commuters from Destination Zip Code (ZC) by
Distance Ergo electric and gas used in GM’s Volts
• Distance Ranges by Commuters possibly in EVs:
– Volts 50 Miles
– Tesla Up to 400 Miles – Sedans Out in Mid 2012
• CT Data on 252 residential ZCs out of 341
Background Process
• Used Annual Cross-Sectional Data on 252 CT ZCs
to Estimate Registrations in Other 89
• Mapped Market Penetrations @ 5% and 25%
• Approximation of Required
Transformer/Transmission Upgrades
• Projected EVs and Total Light Vehicle Growth
• Transformer Upgrades at:
– 5% Market Penetration If Charged at Flat Rates
– 25% Market Penetration If Charged at Off-Peak Rates
Concentrations of Zip Codes Requiring Transmission
Upgrades in 2022 Flat Rates (n=341)
Concentrations of Zip Codes Requiring Transmission
Upgrades in 2022 Off-Peak Rates (n=341)
Stepwise Approach: Bifurcated for Flat
and Off-Peak Rates
• Based on Elasticities on the Spread between
Flat and Off-Peak Rates in CT Developed a
Cost Neutral Rate Spread for Homeowners to
Attain Off-Peak Rates
• Incremental Household Savings on Gasoline
• = Increased Electricity Costs + Increased
Consumption Reallocation
• Off-Peak Electricity Savings $ Exceed Flat
Analytical Progression
• Straight Substitution of Electricity for Gasoline
• GHG Reductions – Amenity Benefits
@ $38.98/tonne CO2eq
• Capital Adjustments-Accelerating Actual NonResidential Capital Toward Optimum Capital
Connecticut Job Impacts from Adopting EVs 20132030 Flat and Off-Peak Rates without Amenities
600.0
400.0
200.0
-
(200.0)
(400.0)
(600.0)
Electricity at Flat Rates No Anemities
Off-Peak Rates No Amenities
County Job Impacts Off-Peak Rates
without Amenities
350
300
250
200
150
100
50
0
-50
-100
Fairfield
New Haven
Hartford
Tolland
New London
Windham
Litchfield
Middlesex
Relative Intensity of GHG Reductions
GHG
2027
Value of GHG Reductions
(Millions 2010 $)
80.000
Fairfield
70.000
New Haven
60.000
50.000
40.000
30.000
Hartford
Tolland
New
London
Windham
20.000
Litchfield
10.000
Middlesex
0.000
Connecticut Impacts from Adopting EVs Flat and OffPeak Rates with & without Amenities (# of Jobs)
1,000.0
800.0
600.0
400.0
200.0
(200.0)
(400.0)
(600.0)
(800.0)
Electricity at Flat Rates No Anemities
Off-Peak Rates No Amenities
Electricity at Flat Rates & Anemities
Off-Peak Rates and Amenities
County Job Impacts Off-Peak Rates
without Amenities
700
600
500
400
300
200
100
0
-100
Fairfield
New Haven
Hartford
Tolland
New London
Windham
Litchfield
Middlesex
2023 & 2028 Sector Impacts from Adopting EVs at Flat and
Off-Peak Rates with & without Amenities (# of Jobs)
1,000
500
(500)
(1,000)
(1,500)
(2,000)
Flat Rate
Flat Rate and
Amenities
Off-Peak Rate
Off-Peak Rate and
Amenities
2,000
1,000
(1,000)
(2,000)
(3,000)
(4,000)
Flat Rate
Flat Rate and
Amenities
Off-Peak Rate
Off-Peak Rate
and Amenities
Connecticut Impacts on Capital Stock
(Millions Fixed 2005 $)
2023
2028
2,500
2,500
2,000
2,000
1,500
1,500
1,000
1,000
500
500
-
Flat Rate Flat Rate and Off-Peak
Amenities
Rate
Actual
Optimal
Off-Peak
Rate and
Amenities
Flat Rate Flat Rate and Off-Peak
Amenities
Rate
Actual
Optimal
Off-Peak
Rate and
Amenities
Connecticut Impacts on Capital Stock:
Flat Rates no Amenities (Millions Fixed 2005 $)
2,500.0
2,000.0
1,500.0
1,000.0
500.0
-
Actual (Millions of Fixed 2005 $)
Optimal (Millions of Fixed 2005 $)
Capital Adjustments
• This Study Produced Estimates of Actual and
Optimal Changes to Capital Stock for Each
Scenario
• Given that Reliability Is a Virtual Necessity,
• The Gap between Optimal and Actual Is Used as a
Proxy for Capital Adjustment:
– 40% Construction
– 30% Producer Durable Purchase of Engines & Turbines
– 30% Producer Durable Purchase of Transmission
Job Impacts of Capital Adjustments
Flat Rates
2,000.0
1,800.0
1,600.0
1,400.0
1,200.0
1,000.0
800.0
600.0
400.0
200.0
(200.0)
(400.0)
(600.0)
(800.0)
Off-Peak Rates
2,000.0
1,800.0
1,600.0
1,400.0
1,200.0
1,000.0
800.0
600.0
400.0
200.0
(200.0)
(400.0)
(600.0)
(800.0)
Electricity at Flat Rates No Anemities
Off-Peak Rates No Amenities
Electricity at Flat Rates & Anemities
Off-Peak Rates and Amenities
Electricity at Flat Rates, Capital Adjustment, No
Amenities
Electricity at Flat Rates, Capital Adjustment & Amenities
Off-Peak Rates, Capital Adjustment, No Amenities
Off-Peak Rates, Capital Adjustment & Amenities
Job Impacts with Replacement Batteries
Flat Rates
Off-Peak Rates
2,000.0
1,800.0
1,800.0
1,600.0
1,600.0
1,400.0
1,400.0
1,200.0
1,200.0
1,000.0
1,000.0
800.0
800.0
600.0
600.0
400.0
400.0
200.0
200.0
-
-
(200.0)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
(200.0)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2,000.0
Off-Peak Rates, Capital Adjustment, No Amenities
Electricity at Flat Rates, Capital Adjustment, No Amenities
Off-Peak Rates, Capital Adjustment & Amenities
Electricity at Flat Rates, Capital Adjustment & Amenities
Off-Peak Rates, Capital Adjustment, Amenities & Batteries
Flat Rates, Capital Adjustment, Amenities & Batteries
Real Income Impacts (Millions Fixed 2005 $)
Flat Rates
Off-Peak Rates
400
400
350
350
300
300
250
250
200
200
150
150
100
100
50
50
0
0
CTRGDP Capital Adjustments
CTRGDP
CTRPI Capital Adjustments
CTRPI
CTRGDP No Capital Adjustments
CTRGDP No Capital Adjustments
CTRPI No Capital Adjustments
CTRPI No Capital Adjustments
Current Income Impacts Before Financing
(Millions Current$)
Flat Rates
Off-Peak Rates
600
600
500
500
400
400
300
300
200
200
100
100
0
0
Personal Income Capital Adjustments
Personal Income Capital Adjustments
Personal Disposable Income Capital
Adjustments
Personal Income: No Capital Adjustments
Personal Disposable Income Capital
Adjustments
Personal Income: No Capital Adjustments
Personal Disposable Income: No Capital
Adjustments
Personal Disposable Income: No Capital
Adjustments
Further Rate Adjustments?
• Scott’s approach is to adjust rates to cover
capital costs
• Yet, in this scenario new electricity supplies
are demand driven
• Test: If value added by utilities exceeds
incremental capital expenditures by a
significant margin, then no further rate
adjustments may be need.
Utility Value Added before & after Deducting
Capital Expenses (Millions 2005 $)
450.0
400.0
350.0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Value Added Flat Rates before Capital Expneses
Value Added Flat Rates after Capital Expneses
Value Added Off-Peak Rates before Capital Expneses
Value Added Off-Peak Rates after Capital Expneses
Employment Summary
Flat Rates
Off-Peak Rates
2,500.0
2,500.0
2,000.0
2,000.0
1,500.0
1,500.0
1,000.0
1,000.0
500.0
500.0
-
-
(500.0)
(500.0)
(1,000.0)
Off-Peak Rates No Amenities
Off-Peak Rates and Amenities
Flat Rates No Anemities
Flat Rates & Anemities
Flat Rates, Capital Adjustment, No Amenities
Flat Rates, Capital Adjustment & Amenities
Flat Rates, Capital Adjustment & Funding, Amenities & Batteries
Off-Peak Rates, Capital Adjustment, No
Amenities
Off-Peak Rates, Capital Adjustment & Amenities
Off-Peak Rates, Capital Adjustment & Funding,
Amenities & Batteries
Current Income Impacts Inclusive of Financing
(Millions Current $)
Flat Rates
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Off-Peak Rates
2013
2030
2029
2028
0
2027
0
2026
100
2025
100
2024
200
2023
200
2022
300
2021
300
2020
400
2019
400
2018
500
2017
500
2016
600
2015
600
2014
700
2013
700
Personal Income, Capital Adjustments and Financing
Personal Income, Capital Adjustments and Financing
Personal Disposable Income, Capital Adjustments and Financing
Personal Disposable Income, Capital Adjustments and Financing
Personal Income Capital Adjustments
Personal Income Capital Adjustments
Personal Disposable Income Capital Adjustments
Personal Disposable Income Capital Adjustments
Utility Output Impacts (Millions 2005 $)
Flat Rate
Off-Peak Rates
1000
1000
800
800
600
600
400
400
200
200
0
0
Value Added Net of Financing
CT Ouput
Demand
Value Added Net of Financing
CT Ouput
Demand
Utility Output Impacts (% of Base)
Flat Rate
Off-Peak Rates
15.00%
15.00%
10.00%
10.00%
5.00%
5.00%
0.00%
0.00%
Value Added Net of Financing
CT Ouput
Demand
Value Added Net of Financing
CT Ouput
Demand
Conclusions
• Off-peak electricity rates position EV owners to save on EV
transportation operating costs and to allocate more household
income to other consumption than occurs with flat rates.
• With curtailed demand for gasoline, stations will close causing a
drop in retail employment in all scenarios
• Prior to Capital Adjustments, the Off-Peak Rate Structure Generates
More Jobs and Income
• Including Financing in the Model is Necessary – It Increases
Employment and Income Impacts
• Utility Output Impacts under Off-Peak Rates are About two-Thirds
of Those under Flat Rates.
• While Flat Rates Appear to Generate More Income this Occurs Only
Because the Capital Adjustment Is $600 Million Higher than
Necessary under Off-Peak Rates - A Measure of the Wasted
Resources from Misguided Flat Rate Policies!