A Review of NV Energy: Leading the Way on Electric Vehicles
By Roy L Hales
Nevada’s principal utility, NV Energy, was growing its residential electricity sales at a rate of about 5% a year until 2007. Mike Salisbury isn’t sure what caused that to change, though the most likely cause is a combination of slow economic growth, efficiency programs (which resulted in less need for electricity) and the introduction of rooftop solar. Salisbury believes that electric vehicles (EVs) offer NV Energy a way to smooth out seasonal differences and increase revenues during slack hours. He is a Transportation Analyst at the Southwest Energy Efficiency Project (SWEEP) and the author of a report that shows how a Nevada utility leads the way on Electric Vehicles.
“NV Energy seems to recognize that it is in their own best interest to develop this new market and advance the adoption of EVs,” said Salisbury. “We encourage other utilities to follow NV Energy’s lead and proactively support electric vehicles.”
The utility installed nearly half of Nevada’s 108 charging stations.
NV Energy also set a personal example, by purchasing three Nissan Leafs and Nine Chevy Volts for company use.
Though it is unlikely every light duty vehicle in their territory will be an EV, the additional demand would be equal to nearly 20% of NV Energy’s current sales.
Salisbury writes that “EVs offer utilities an opportunity to increase the demand for electricity, but to do so during off-peak hours when there can be significant underutilized electric generating capacity.”
NV Energy’s subsidiary, Nevada Power, has to produce close to 5,800 MW during the hot summer afternoons. Less than half that amount of electricity is needed in the winter, or in the cool of the evenings. That means that a lot of expensive machinery that is needed for peak hours, is not in use much of the time.
Since 2009, NV Energy has been offering lower rates as an inducement to adopt electric vehicles.
“However, new electricity sales from EVs are only advantageous to utilities and their customers if they occur during off-peak hours so that new capacity is not required to meet growing peak demand. With most EV charging expected to take place at people’s homes, the introduction of time- of-use (TOU) rates strongly encourages (but does not ensure) that charging occurs during off-peak usage periods. This is especially important as EV drivers may otherwise charge their vehicles at the workplace or at home in the late afternoon when people often return home from work. TOU rates give EV owners the opportunity to get better electricity prices if they charge their vehicles late at night or early in the morning when utilities generally have excess generating capacity.”
In Southern Nevada, EV owners who charge their cars between 10 p.m. and 6 a.m. pay about 7 cents per kWh in summer and about 5 cents in winter, compared to normal residential rates of 12 cents. The rates are slightly lower in the Northern part of the state.
The TOU rate has proven to be effective. In areas where it has not been offered, most vehicles are charged in the late afternoon – when people are returning from work. After TOU rates are offered, most usage occurs in non-peak hours.
NV Energy’s Director of Renewable Energy Strategy and Development, Jared Friedman, has long supported EV development for environmental reasons.
He added that, “If a customer opts for an electric vehicle, their cost of fuel for driving will typically decrease by over 50 percent. If that same customer selects our special electric vehicle rate for their entire home or apartment and modifies their energy usage away from the high-peak hours, then they will reduce their energy bills even further.”
NV Energy has also partnered with universities, casinos, resorts, shopping centers, recreation destinations and airports to set up charging stations at 47 locations across the state. They offered partners up to $5,000 off the cost of a single port charger and up to $7,000 off the cost of a dual port charger, providing their partners give customers free electricity for five years.
As Salisbury points out, NV Energy deserves credit for the leadership it has taken in ensuring that the market for EVs grows in Nevada. The TOU system is an on obvious success, which other utilities should emulate to more fully utilize their facilities.
Yet comparing the growth of EV usage in Nevada to that of Colorado and Utah, it is obvious that even more can be accomplished if the state government becomes more involved.