The Impacts of Retail Tariff Design on Electric Vehicle Charging for Commercial Customers

Abstract

Power engineers have examined the potential impacts on the electric grid of high electric vehicle (EV) adoption, while energy economists have shown issues with modern electricity retail tariff design. However, little work has shown how customer decisions regarding their tariff and optimizing EV charging costs could affect the utility and the customer. If commercial customers can optimize their charging profile, how do different tariff structures affect local distribution system voltage, utility cost recovery, and customer bills? To answer this question, we model commercial customers optimizing their EV charging to minimize costs using real-world tariffs. Then, we model the voltage impacts of customers charging EVs on a realistic distribution feeder. Finally, we calculate the costs of EV charging for customers and the distribution utility. We find that current tariff designs do not support large-scale deployments of EVs without system upgrades or additional control measures. We also find that customers can reduce costs nearly 15% by switching retail tariffs, leading to a potential revenue gap for the utility. Finally, we show that new power subscription-based tariffs are less efficient than traditional demand charge-based tariffs, and instead, designing tariffs for load optimization can reduce costs for both the customer and the utility.