Hybrids and Electric Car Usage Leading to Higher Electric Rates
As more carmakers are making electric cars, substantial upgrades to the power grid will be required in California. One of the obstacles to everyone driving an electric car is that there are limited places to recharge the cars' batteries. To build the necessary infrastructure to support electric cars is going to be expensive.
That's going to mean larger power bills for Californians.
California's push to lead U.S. sales of electric cars may result in higher power rates for consumers in the state, as a growing number of rechargeable vehicles forces utilities to pay for grid upgrades.
The autos' effect on electricity fees is being reviewed by California's Public Utilities Commission this month as the most populous U.S. state will require Toyota Motor Corp., General Motors Co., Honda Motor Co., Ford Motor Co. and Nissan Motor Co. to sell more plug-in vehicles from late 2011.
Power companies including Southern California Edison, the state's largest, have to install new transformers and meters to handle greater demand and prevent blackouts when autos are being charged at outlets. Utility rates will rise to cover the costs, said Travis Miller, a Morningstar Inc. analyst in Chicago.
"If you look at the kind of money that will be needed for a full smart grid and support for electric vehicles, then you are talking about a substantial amount," Miller said in a phone interview. The spending may total "multiple billions" of dollars over a decade or more, he said.
From model years 2012 through 2014, the largest carmakers by volume in California must sell about 60,000 plug-in hybrids and electric cars combined, according to the state Air Resources Board. President Barack Obama is aiming for 1 million plug-in cars on U.S. roads by 2015 to curb tailpipe emissions and cut dependence on foreign oil.
Because so many people have electric cars or hybrids in Santa Monica, Southern California Edison says the area will require transformer upgrades as more people plug their cars in at night to recharge. One circuit serves ten homes. So if even as few as three people charge cars at the same time -- even at night -- that can overload the circuit. The system is set up to expect less power needs at night, so it can operate at full capacity during the day. If everyone starts plugging in cars, it's going to be a big problem.
Areas with lots of hybrids should expect rate hikes in the future.
