Why Utility Reward Programs and Electric Car Owners Are a Perfect Match
May 2, 2017
May 2, 2017
Rewards programs are by now a part of most Americans’ lives. Whether you have a frequent flyer account, choose a credit card for the cash back offers, or enjoy a free 10th coffee after you buy nine at a café, you know the benefits of consumer loyalty to a brand.
These programs extend beyond consumer goods. As energy demand grows in major U.S. cities, utility providers have turned to customers for help managing the grid during periods of high demand. In some cases, utilities offer bill credits or other rewards when homeowners take advantage of smart thermostats and similar energy-saving tools.
With electric vehicle (EV) adoption increasing rapidly in major U.S. cities, we have even seen automakers and others in the EV industry teaming up with utilities to promote smarter charging practices. In exchange for shifting charging to more desirable time periods, some utilities now offer financial rewards or energy credits to consumers for joining these programs.
Several successful programs are already in place or being piloted in California and internationally, and the newest of such programs is one recently launched in the greater New York City area. Consolidated Edison of New York, Inc. (Con Edison) – NYC & Westchester’s electric utility – is partnering with FleetCarma in a program called SmartCharge New York, where EV owners can receive FleetCarma’s connected car technology for free and also earn SmartCharge RewardsTM for participating in the program and charging their vehicles during off-peak times.
For more information on the SmartCharge New York program, feel free to visit the program registration page at: www.fleetcarma.com/smartchargenewyork.
The rest of this article will explain why electric vehicles and utility rewards programs are a great fit and great opportunity for consumers.
How Utility Reward Programs Work
To get consumers to install smart thermostats or join load reduction programs (e.g., Con Edison’s Bring Your Own Thermostat program), utilities generally offer one or more of the following:
- Financial incentives or bill credits (sometimes as much as $150)
- Free thermostats (reimbursed up to $110)
- Free installation of smart home devices and other products
Customers typically sign up through an online registration site and choose the product or program that best fits their household’s energy needs. In exchange for the free equipment or other benefits, the utility will ask to step in and limit the household’s energy use during peak times (sometimes providing customers the opportunity to decline if they choose.) Long-term program members also sometimes receive additional bill credits on an annual basis.
Electric Vehicle Charging Programs
As more renewable electricity generation comes online across America, the promise of “zero emissions” transportation becomes impactful. Electric cars are only as green as the power source that charges the battery, but they also have the ability to serve as a compelling (and some say critical) distributed energy resource to ‘store’ cleaner or cheaper electricity at the times the grid needs such ‘services’. Utilities often call these customers ‘prosumers’, rather than ‘consumers’, since they are providing benefits back to the grid by being a customer of the utility. As such, utilities give these customers the opportunity to get rewarded for their service.
This is a shift in the way of thinking about your car. Instead of it solely providing a mobility service for oneself, it will also become a resource for providing services to the electricity system. To facilitate this service with EV customers, some utilities have piloted voluntary time-of-use rates that charge customers more during peak times and less during off-peak. These programs, although well-intended to help EV owners see financial benefits while providing services to the grid for off-peak charging, are generally undersubscribed. They are usually:
- Not an EV specific rate, but rather a whole household rate, or
- Require a separate dedicated meter and may subject customers or the utility to additional monthly customer charges, equipment costs, and/or installation
FleetCarma’s SmartCharge RewardsTM programs that reward customers for off-peak charging, like the one with Con Edison, do not subject customers to any additional cost.
Toronto Hydro, New Brunswick Power, BC Hydro, Pacific Gas & Electric, San Diego Gas and Electric, Con Edison and other utilities internationally have even conducted pilots to test and demonstrate the concept of utility-controlled charging with its customers as well. And, in these programs, enrolled participants receive financial rewards for giving the utility control of its charging when it is beneficial to the grid.
In all such programs using the FleetCarma utility platform for smart charging, EV owners are able to have a guaranteed minimum state of charge (SOC) before they are dynamically enrolled in any demand response event called by the grid operator, and FleetCarma offers greater financial rewards for setting a lower SOC opt-out threshold. In doing so, utilities can more easily recruit and satisfy its participating EV customers, while also receiving greater curtailment capacity for the electricity system as a whole from this demand response capacity.
The rewards aren’t just financial as well. In the case of FleetCarma partnered programs, EV owners get access to data and insights about their vehicle that they would not otherwise be able to receive.
Additionally, EV owners can earn ‘environmental rewards’ by helping expand the use of plug-in vehicles and displace petroleum fuel usage. The map below from the Union of Concerned Scientists shows the greenhouse gas emissions benefit of EV adoption by regional grid in the United States.
Accelerating the adoption of electric vehicles on to our roads would continue advancing clean air initiatives in West Coast and Northeastern states, in particular. And, as EV driving range extends beyond 200 miles per recharge for vehicles like the Chevrolet Bolt and Tesla Model 3, the opportunities for financial and environmental rewards gets even greater for EV owners and utilities alike.