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Charging electric vehicles in Massachusetts could get less expensive under a pair of utility proposals now under consideration, but advocates are arguing for tweaks they say would make the transition faster and more fair.
A 2022 state climate law requires the state’s two major electric companies, Eversource and National Grid, to submit proposals for so-called time-of-use rates offering lower prices to electric vehicle owners who charge their cars during lowerdemand hours. The utilities did so in August 2023, proposing off-peak rates they say could save users hundreds of dollars a year compared to basic service rates.
Climate advocates generally support the time-of-use concept. Lowering the cost of charging could motivate potential buyers as the state tries to hit its goal of getting 900,000 electric vehicles on the road by 2030, they argue. Shifting vehicle charging to off-peak hours could also lower power use during peak times, reducing the need to fire up older, dirtier fossil fuel power plants to meet demand.
Still, stakeholders said, there is room for improvement in everything from the process of collecting public feedback to the precise calculations behind the rates.
“We are very supportive of time-of-use rates, broadly speaking,” said Oliver Tully, director of utility innovation and reform at climate nonprofit the Acadia Center. “We want to make sure these initial plans are as strong as possible.”
In considering the utilities’ proposals, the Department of Public Utilities is trying out a new strategy: They have asked the utilities themselves to collect feedback from the public. The goal is to hear from parties that might not have qualified to be formal intervenors in the case, said Anna Vanderspek, electric vehicle program director for the Green Energy Consumers Alliance.
“They’re saying: We want you to talk about this and come to an agreement because the [Department of Public Utilities] process limits who’s in the room for the conversation,” she said.
While she appreciates the aim of opening the discussion to more voices, however, she isn’t confident the utilities, left to their own devices, will create enough opportunities for feedback.
“It’s not an impartial third party running the stakeholder process,” she said.
The utilities had a first meeting scheduled to take place online today, which Eversource spokesman William Hinkle called, “the first of a series.”
The timeline laid out by the utilities is also of concern to some advocates. The utilities do not want to roll out these rates before they deploy advanced meters and software, and then have a year’s worth of experience with the new system “to ensure network stability,” according to Eversource’s filing. By the utility estimates, this timeline would mean the new rate option would be unlikely to kick in before 2029.
Many advocates don’t think it’s necessary to wait quite so long, however. Other states, such as Vermont and California, have implemented time-of-use rates for electric vehicle charging without requiring advanced meters. Data from chargers or the vehicles themselves can be used to determine how much power was used for charging and when, allowing for billing at different rates.
“You can implement basic time-of-use rates without a smart meter,” Tully said. “If you allow for submetering using charging technology you should be able to accurately do that.”
Getting started now, instead of waiting for advanced metering, could also make the launch of time-of-use rates go more smoothly, said Graham Turk, a graduate research assistant at the Massachusetts Institute of Technology’s Energy Initiative. Any new rate structure is going to need adjustments once it is introduced.
“The earlier they do that, the better,” Turk said. The current proposal would “just push that farther down the line when [electric vehicles] are a lot more prevalent and it’s a lot harder to do this for the first time.”
Lower rates during off-peak hours may not be enough on their own to recruit new electric vehicle drivers, many experts said. Getting the precise numbers right will be vital.
“The real challenge is going to be in ensuring that the rate structure is something that encourages people to participate, but doesn’t punish people for using electricity outside of the time-of-use rate hours,” said Priya Gandbhir, senior attorney with the Conservation Law Foundation.
The utilities’ filings include example numbers for what an electric vehicle charging time-of-use rate might look like, but do not propose specific rates yet, given how much could change in the market and regulations over the next five years. In each of these illustrative cases, the cost of off-peak vehicle charging is substantially lower than the cost of basic service, while the cost of on-peak charging is significantly higher.
That makes rough sense, advocates said, but when the real numbers are determined, a delicate balance must be struck. If the difference between on-peak and off-peak rates is too small, it won’t do enough to motivate more people to consider electric vehicles. At the same time, if the gap is too big, then a few on-peak charges could mean a bigger bill than under basic service rates, effectively punishing some consumers if a sudden change in schedule alters their charging times.
“Basically, when people’s bills come through at the end of the month they should be able to see some savings, regardless,” Gandbhir said. “They shouldn’t have to be perfect.”
As all these complicated decisions are made, it is essential to keep in mind the effects these changes could have on lower-income populations in the state, said Mary Wambui-Ekop, a longtime energy equity activist and co-chair of the equity working group for the state’s Energy Efficiency Advisory Council.
She worries that the overall cost of a major transition toward a new metering system and time-of-use rates could add to the already high energy burden of low-income households. In Massachusetts, households earning under 30% of the average median income pay 13% of their earnings to energy costs, as compared to 2% for households at or above median income.
“The bottom line is low-income households in Massachusetts, Black and brown households, have higher energy burdens,” Wambui-Ekop said.
At the same time, residents working multiple jobs, living in rental units, and just trying to keep up might not have the time, education, or internet access to learn about and weigh new and potentially cost-saving options.
There is precedent for this concern: Lower-income households have also been left behind in other pushes for renewable energy or energy efficiency in the state. A 2020 report by the utilities, for example, found that residents of wealthier communities were far more likely to have taken advantage of energy efficiency programs than those in lower-income areas and neighborhoods with higher populations of color.
Plans for time-of-use rates — for electric vehicle charging or beyond — must therefore include careful plans for making sure historically disadvantaged communities can share in the benefits and avoid shouldering the burden, Wambui-Ekop said.
“I am not opposed to time-of-use rates,” she said, “They are great in a perfect market. Unfortunately, the market system has not been fair to low-income households.”
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