New California rule will cut costs of home EV charging

A long-awaited policy change eliminates the need for a second meter to measure EV electricity use. That opens up options for better rates and vehicle-to-everything charging.
By Jeff St. John

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A black EV in the driveway of a modern two-story home
In California, home EV chargers like this JuiceBox unit can now meter and report their energy use to comply with utility rates that reward customers for charging when it won’t stress the power grid. (Enel X Way)

Utilities across the country are asking customers with electric vehicles to sign up for programs and rate plans that incentivize them to shift from charging when power grids are under stress to when there’s plenty of power to go around. As EVs grow from rare to common, these kinds of programs could prevent them from being a threat to grid stability and instead turn them into an asset.

So why do many utilities force customers to spend thousands of dollars to install redundant separate meters to take part in some of these EV-to-grid programs — particularly when EV chargers themselves can do what meters do?

The California Public Utilities Commission has been struggling with this question for more than a decade. Earlier this month, it finally did something about it, with a decision that will require the state’s three biggest utilities to let EV chargers themselves measure and tell utilities how much power they’re using from moment to moment.

This simple step can make EV ownership and EV charging a lot more affordable,” said CPUC Commissioner Cliff Rechtschaffen, who wrote the proposal that was approved by the full commission on August 5. That’s because the most lucrative incentives for EV owners haven’t been accessible without separate metering of EV charging — namely, special rate plans that reward customers with lower costs for charging overnight when electricity is plentiful and impose higher costs during peak afternoon and evening hours when it’s in short supply.

Forcing homeowners to spend about $2,000 to get a separate meter installed — the typical cost cited by Pacific Gas & Electric, the state’s largest utility — has been a major barrier to getting customers to sign up for these time-of-use rate programs, Rechtschaffen said. Quite a large number have not been taking advantage of these EV rates,” he said. The result is that they forgo very, very significant cost savings.”

That’s far from ideal for a state trying to get 8 million EVs on the road by 2030. Requirements for separate meters are also a problem for other states with ambitious EV targets, said Edward Burgess, senior policy director with the Vehicle-Grid Integration Council, a group representing EV and charging manufacturers that’s working on these issues with utilities and regulators across the country. It has definitely been a barrier,” he said.

Some utilities and states have rolled out limited programs that enable managed EV charging without extra meters. One example is Baltimore Gas & Electric, which in late 2019 won approval from Maryland state regulators to use the metering capabilities within EV chargers for a rebate program that comes with a time-of-use rate structure similar to California’s, Burgess said. Similar programs have been used by Xcel Energy in Minnesota and Colorado and by other utilities in Massachusetts, Rhode Island and Connecticut.

Baltimore Gas & Electric, Xcel, Florida Power & Light and other utilities have partnered with Enel X Way, the EV-charging arm of Italian utility Enel, to offer customers EV-only billing through Enel X Way’s JuiceBox residential chargers, said Marc Monbouquette, senior manager of regulatory affairs for Enel North America. Measuring EV charging in 15-minute intervals, uploading that data to the cloud, and subtracting it from the kilowatt-hours recorded on a customer’s primary utility meter yields a relatively simple way to track the two separately, he said.

JuiceBox EV charger installed inside a residential garage
A JuiceBox EV charger (Enel X Way)

But there’s a big difference between authorizing this kind of charger-based metering for stand-alone programs, as these states have done, and making it the default approach for all utility EV-charging programs, as California has now done, Monbouquette said. Individual programs come with limits on how many customers can enroll or how much incentive money they can spend, and they need to be reauthorized by regulators when they expire. New rate structures, by contrast, are available to any qualifying residential or commercial customer who wants them.

This is critical to increasing participation in EV time-of-use rates, which have been relatively lacking in the California investor-owned-utility territories,” he said. 

Why metering EV charging on its own is important 

EV-specific rates are designed to do two things: encourage off-peak charging when grid power is plentiful (essentially overnight) and discourage on-peak charging when the state’s grid is under the greatest strain. They do that by dropping off-peak rates well below regular levels and jacking up on-peak rates well above regular levels.

Right now, California’s big three utilities — PG&E, Southern California Edison and San Diego Gas & Electric — have two kinds of rates that EV owners can choose to sign up for to enable cheaper charging overnight. One applies only to the power an EV uses; this is the type that has required a second meter. The other doesn’t need another meter but applies the high on-peak charges to the home’s entire electricity usage, not just the EV’s.

Both rates discourage customers from charging EVs during higher-priced hours, which are the same hours when California’s grid faces the greatest strains. But the whole-home rates also expose customers to paying high rates for the rest of their electrical loads — as high as 56 cents per kilowatt-hour from 4 to 9 p.m. in PG&E’s case. That’s much higher than the statewide average rate of 26 cents per kilowatt-hour.

Rates as high as 56 cents are not usually appropriate for an entire home” that needs to run air conditioning or appliances through afternoons and evenings, Rechtschaffen said. Residential customers of California’s big three investor-owned utilities are now placed on default time-of-use rates, but these default rates don’t charge nearly as much for on-peak energy use as the two types of EV rates do.

The high on-peak rates make more sense if they’re just applied to EVs. It’s easy for many customers to avoid charging an EV altogether during on-peak times and take advantage of low-priced overnight charging, Rechtschaffen said — if it’s easy for them to access those EV-only rates. PG&E’s EV-only rates charge 60 cents per kilowatt-hour between 4 to 9 p.m., but only 25 cents per kilowatt-hour from 11 p.m to 7 a.m.

The EV-only rates can lead to significant savings for drivers, he said. PG&E’s EV rate website estimates that the cost to charge an EV for customers on the whole-home rate is equivalent to paying $2.14 per gallon of gasoline, compared to $1.96 per gallon for those on the EV-only rate.

But the cost and trouble of getting a second meter have held back signups for EV-only rates, according to 2021 report that shares the most recent data available from California’s big three utilities. As of the end of 2020, PG&E, whose territory is home to about 20 percent of all EVs in the country, had about 60,000 customers enrolled in the whole-home rate, but fewer than 500 customers on the EV-only rate. Southern California Edison had just under 13,000 customers on its whole-home rate and only 726 on its EV-only rate.

This month’s decision should quickly change that, Rechtschaffen said. Most EV chargers right now come with the capability of submetering,” and the devices should be ready to be enrolled in rate programs as soon as utility billing systems are upgraded to manage the data coming from those chargers. Monbouquette noted that 13 different EV-charging manufacturers have been certified under California standards, indicating a ready supply of compliant home chargers.

There is one exception, however: Customers with net-metered solar won’t be eligible for EV-charger submetering yet due to the complications of measuring how much of the power going to an EV is coming from a customer’s solar system versus the grid. The CPUC’s decision pledged to begin exploring solutions to this issue within the next year, a timeline that could coincide with its newly extended timeline for resolving its controversial plans for reconfiguring the state’s solar net-metering regime.

Why this has taken so long 

It’s been 11 years since the CPUC started work on developing a submetering protocol for EV charging, Monbouquette pointed out. Given that EV chargers have been capable of measuring their own electricity usage for nearly that long, it’s worth asking why it took so much time for the CPUC to come to the decision it announced earlier this month.

Rechtschaffen said it’s taken a lot of real-world testing to ensure that the metering capabilities of EV chargers were up to utility and state standards. We did pilots for a number of years before this decision,” he said. We didn’t want to mandate it or roll it out until we were sure people were billed accurately for the electricity they used, no more and no less — and utilities want to be sure of that as well.”

This month’s decision sets metering accuracy requirements for EV chargers at homes and businesses that are based on those for public EV chargers from the National Institute of Standards and Technology (NIST), Monbouquette said.

EV-only time-of-use rates have been slow in coming because we haven’t had these standards in place,” said Kevin Schwain, senior director of EV strategy at EnergyHub, a company that manages demand-side resources such as smart thermostats, water heaters, batteries and EV chargers for more than 60 North American utilities.

EnergyHub has worked with companies including Enel X to integrate their EV chargers into utility programs like Baltimore Gas & Electric’s rebate and time-of-use program. Maryland is on the cusp of doing something similar to California,” he said, and the NIST standard is kind of the centerpiece of what they’d be approving.”

Burgess of the Vehicle-Grid Integration Council noted that utilities often express concerns about the accuracy and verifiability of EV-charging measurements. This is the basis of utilities’ objections to using them instead of utility-owned meters. But a lot of utilities are, in my opinion, overly conservative when it comes to this kind of stuff,” he said.

Investor-owned utilities may also have financial incentives to require customers to install separate meters, he added, since it means they can build a bunch of new infrastructure that’s capital investment,” which earns them a guaranteed rate of return.

Submetering EV chargers opens up new possibilities 

This month’s CPUC decision also sets communications protocols for EV-charger submetering that are meant to ensure smooth communication between the chargers and utilities, Rechtschaffen said. That will allow utilities to gather usage data from EV chargers that are signed up for EV rates, as well as enable the kind of communication we need to promote vehicle-to-grid integration and the benefits that result from it,” he said.

Simply giving utilities more communications channels to interact with EVs is important, he noted. EVs made up 16 percent of passenger vehicles sold in California last year. 

Submetering at the charger also opens up a lot of new options for tapping the flexibility of EVs to help the grid, Rechtschaffen said. Beyond being able to take advantage of the best-suited rate structures to charge at the most opportune time,” there’s also the opportunity to feed back energy at the most opportune time.”

That last point is a nod to vehicle-to-everything,” or V2X, systems that allow EV batteries to discharge their power to the homes or buildings they’re connected to, and potentially beyond them to the utility grid. The CPUC has approved interconnection rules and issued guidance for how V2X chargers can connect to the grid. California utilities are testing them in pilot projects, and California agencies are working with U.S. Department of Energy researchers and major manufacturers of EVs and chargers to test and certify systems for standard use.

The Vehicle-Grid Integration Council has laid out a number of ways that V2X could play a role in balancing the grid, from making it simple for EV owners to use their EV batteries for backup power to enabling them to export their power during times of grid stress, as PG&E has proposed for a pilot program. The question is, how do the utilities respond to that?” Burgess said.

That’s a question being asked in other states, he noted. Last month, the New York Public Service Commission approved a set of utility-managed charging programs that include a call for utilities to support EV-charger submetering. Duke Energy has asked North Carolina regulators to approve a managed-charging pilot that could include tapping the capacity of Ford F-150 Lightning electric pickup trucks to support the grid. And utilities in Massachusetts, New York, Oregon and other states are among those testing technology that can track charging from the EVs themselves rather than from chargers.

All of these programs could benefit from standardizing the use of EV chargers as the source of metering data, Burgess said. He’s hoping that the CPUC’s decision will set a precedent” for other states. New York is very interested in these topics, and they’re sort of following California’s lead.”

EnergyHub’s Schwain agreed that California’s action could encourage states like Maryland, Massachusetts and Minnesota to standardize their approach to allowing EV chargers to meter themselves. The publicity around this will help other states get comfortable around this idea and help unlock programs that are better for consumers and better for the grid.”

Jeff St. John is director of news and special projects at Canary Media. He covers innovative grid technologies, rooftop solar and batteries, clean hydrogen, EV charging and more.