An ACT News Executive Interview with Shahin Firoozmand, senior project manager with Pacific Gas and Electric Company (PG&E) to learn about the many customer benefits offered by the Business Electric Vehicle (EV) rate plans.
The Business EV rate plans were introduced in 2020, providing PG&E customers the option to choose a subscription plan based on the total amount of power they will require for their vehicle charging needs per month. Similar to choosing a data plan for a cell phone bill, the new plan allows customers to look ahead and manage their electricity usage related to EV charging. Customers can also adjust their subscription plan to meet their real world needs for charging vehicles, allowing for simpler, more consistent monthly electricity costs.
ACT News caught up with Shahin to hear how the Business EV rate plans help business customers save up to 40% on charging costs on average compared to previous rate options for charging EVs.
ACT News: What benefits do the PG&E Business EV rate plans provide fleets?
Shahin Firoozmand: There are quite a few benefits, but the most alluring one is cost reduction, with a quantifiable effect on the bottom line for an electric fleet. The Business EV rate plans reflect time-of-use periods throughout the day, based on electricity demand across the grid. For 19 of the 24 hours in a day the rate is quite low, around 10 to 13 cents. The remaining hours are what is called the peak period, from 4:00 p.m. to 9:00 p.m. This is when electricity rates are the highest. Most businesses with EVs can charge them overnight, which is advantageous in terms of the price of electricity. There is also a reduction in volatility in terms of price and usage on a month-to-month basis. PG&E helps customers compare the Business EV rate plans to other rate plans they might be on.
The subscription element of the Business EV rate plans is unique in that the kilowatt (kW) is the subscription, while the volume-based component is the kilowatt hours (kWh). Using a non-technical way to paint a picture, think of it like water flowing through a pipe. How much water can flow through the pipe? The size of the pipe is the kilowatt, or capacity. The kilowatt hour is the volume of water flowing per hour. Capacity is the subscription component. Customers look at their usage and choose their subscription rate ahead of time. Compared to other electricity rates that are retrospective, where you use the electricity and then get billed afterward based on your usage. With the anticipatory subscription rate, customers are thinking ahead about managing their electrical usage related to EV charging.
ACT News: Aside from fleets, what other types of customers can take advantage of the Business EV rate plans?
Shahin Firoozmand: We call them the Business EV rate plans because they are for commercial and business enterprises, but the customer base is not limited to that. PG&E customers using the Business EV rate plans include public institutions like universities, government agencies, and private businesses — essentially any non-residential entity. We also have EV service providers enrolled who supply charging to public or private businesses. They install EV fast charging or level 2 chargers in public parking lots, at malls, or at places of business. Public institutions sometimes install chargers and offer free charging to the public. Whoever owns the meter and the charger can take advantage of the Business EV rate plans, as long as the meter is with a commercial or institutional customer.
One other benefit of the Business EV rate plans is compatibility with solar rates. We see this as a natural pairing in the clean energy ecosystem of EVs, as well as the production of energy as a sustainable and renewable resource.
ACT News: How is the EV Fleet Program separate from the Business EV rate plans?
Shahin Firoozmand: The rate supports the intent of the EV Fleet Program. When a business decides they want to electrify their fleet, they need to first determine what kind of vehicles they want to purchase. That will help them identify their charging infrastructure needs. The Business EV rate plans can then be considered to help make the costs more attractive to fleets by adding to the long-term total cost of ownership savings.
Businesses can learn more about how Business EV rate plans can benefit their fleets using the PG&E EV Fleet Savings Calculator.
ACT News: How does PG&E work with fleets to ensure they are using the correct rate and number of energy blocks to fit their anticipated energy usage?
Shahin Firoozmand: The Business EV rate plans were designed to be customer friendly and provide cost savings. Information is available on our website at PG&E EV Fleet, which can answer initial questions a customer may have about the program. Customers benefit from an onboarding specialist team, assisting them to determine what is best for their business. The first step is to look and see what the current electrical usage is at a customer’s facility. Second, PG&E must ensure that the customer meter will only be used for charging, it cannot be mixed with metering for their facility. Once that is verified, we look at what the overall expected load will be and work with customers to understand what their potential charging behavior and actual energy usage will be.
The EV Fleet Savings Calculator is another tool PG&E offers customers. Using a detailed built-in analysis tool, it uses information about a fleet’s energy usage to provide recommendations on what subscription plan would work best.
ACT News: What can customers expect if they go over or under the energy use in relation to the subscription rate they are signed up for?
Shahin Firoozmand: When a customer enrolls in a Business EV rate plan, they are automatically given a grace period with no overage fees for three billing cycles. At the start, customers often may not know the best subscription plan to choose. We advise them to pick what they think will be the closest, and we will recalibrate the subscription rate if needed. In the first, second, or third months, if the energy usage is lower or higher, customers can adjust accordingly with no financial penalty. The intent is to incentivize alignment between the subscription rate and energy usage. While there is an overage fee for using energy beyond the subscription, customers can change their subscription, even if it’s in the middle of the month. By the end of the third billing cycle, if a customer is still going over, we’ll auto-adjust them to the correct subscription rate to avoid overage fees. The customer will stay on this auto-adjusted subscription rate for the next three months.
ACT News: What are “time of use” rates, and how can they help fleets save even more money?
Shahin Firoozmand: The price of electricity is set based on the agreed upon peak and off-peak periods varying throughout the day, in pre-set periods of time. Peak time-of-use rates, occur when demand for energy is highest on the grid from 4:00 p.m. to 9:00 p.m. During this period, the costs of the Business EV rate plans will be higher, as opposed to the off-peak or the even lower super off-peak period each day.
Fleet customers can save money by charging during the lower-cost off-peak and super off-peak periods. If charging is done during these periods, customers have a greater opportunity to save. The evening hours from 9:00 p.m. to 9:00 a.m. are off-peak hours. Periods of time when vehicles are not as likely to be used such as evenings and nights are a perfect time for businesses to charge their vehicles because they can save money and take advantage of cleaner energy.
ACT News: What advice would you give to a customer just starting to electrify their fleet to determine their energy costs?
Shahin Firoozmand: Understanding fueling costs is a crossover idea from conventional vehicles and fuels that fits seamlessly with EV fleets. A large percentage of a business’ fleet costs are in fuel. Calculating the savings over time magnifies them when compared over the life span of the EV. In terms of charging and rates, a fleet owner needs to understand how EV charging interacts with their duty cycle. One operational concern of fleet owners is not having their vehicles properly charged when they need them. It might require some new operational habits to adapt to this new landscape for vehicles. The interaction with the duty cycle and leveraging the time-of-use periods when they can are important steps to get the most out of their EV fleet investment and this program.
ACT News: How much money can the Business EV rate plans potentially save EV fleets? Over the course of a year, or the lifetime of the vehicle?
Shahin Firoozmand: Different customers will have different results, based on their operations. When we compare the Business EV rate plans to other commercial electric rates, fleets can save up to 40%. This is an average across different customer groups. Not all customers will save this amount, some may save up to 20% while others may see savings up to 60%. When comparing the Business EV rate plans to gasoline or diesel, presuming the customer is also using time-of-use rate plans to their advantage, we see a similar average savings of up to 40%.
But this is not just about savings, electrifying your fleet also helps to meet the sustainability goals many businesses are trying to attain. For example, about 85% of the electricity we supplied in 2020 was greenhouse-gas free, including more than 35% from renewable resources including solar, wind, and small hydroelectric power. We continue to deliver some of the nation’s cleanest energy, and we are well on our way to meet the state’s 60% by 2030 renewable energy mandate.
What is the biggest misunderstanding or myth when it comes to energy usage for fleets?
Shahin Firoozmand: In the past, customers expressed barriers including lack of driving range, slow charging, or lack of charging. Luckily, these are issues from the first generation of EV technology and we’re seeing technology improving very quickly. The increases in battery capacity and the number of miles that can be driven on a charge, as well as the amount of time it takes to charge the battery, are all improving rapidly. We’re seeing direct current fast charging and other new technologies that are providing availability and convenience for customers.