New Electricity Rates Offer Businesses & Agencies the Opportunity to Save on Fuel Cost with EVs

February 3, 2021

In partnership with: SDG&E

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For fleets considering a move to electric vehicles (EV), there are many factors to consider. Even after the vehicles are purchased and the proper charging infrastructure is installed, the price of fuel becomes a part of the equation. And when you’re moving from fossil fuels to electricity, there is often a learning curve to understand how to save with EVs, whether you’re in the freight business, running a local transit agency, or ferrying children on school buses.

To complement our Power Your Drive for Fleets (PYDFF) program, a recently approved rate, called the Electric Vehicle-High Power (EV-HP) rate, offers EV fleet customers a subscription-based pricing plan that provides customers the opportunity to save up to 50% on electricity costs compared to the cost of fueling with diesel. The new rate eliminates demand charges, which are fees applied to electric bills based on demand at any given time rather than total energy use. These charges can be a challenge for fleets with medium- and heavy-duty EVs that require a large amount of energy when charging.

The EV-HP rate offers a subscription-based pricing plan with up to 50% savings on electricity costs versus diesel.

What are the EV-HP rates and how much does it cost?

The new rate structure allows EV fleet customers to choose the amount of power they will need to charge their vehicles and pay for it with a monthly subscription fee—like a cell phone plan where you pay for a certain amount of data each month. SDG&E works with fleets to help determine their estimated monthly power needs, based on maximum total power demand each month, measured in kilowatts (kW). There are no overage fees or penalties for exceeding demand. However, if a fleet exceeds their monthly subscription level for three consecutive months, SDG&E will enroll the fleet customer in a subscription level that reflects actual monthly demand. If maximum monthly demand is:

  • Under 150 kW, fleets can subscribe in increments of 10kW at $ 37.79 each
  • Over 150 kW, fleets can subscribe in increments of 25kW at $103.61 each

The EV-HP pricing plan not only eliminates demand charges but also offers reduced time-of-use (TOU) energy charges that encourages fleet customers to charge their vehicles during off-peak, grid-friendly hours—typically between 12 a.m. and 6 a.m (detailed TOU schedule below). TOU charges are measured in kilowatt-hours (kWh) and range between $0.10 to $0.19 per kWh as part of the EV-HP rate.

electricity rateselectricity rates

*Holidays: New Year’s Day, President’s Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving Day, Christmas Day.

The perfect complement for Power Your Drive for Fleet customers

The EV-HP rate is a perfect fit for customers that are enrolling in our Power Your Drive for Fleets program, which is setting out to build charging infrastructure for at least 3,000 plug-in medium-duty and heavy-duty (MDHD) electric vehicles and equipment, including transit buses, school buses, delivery trucks, shuttle vans, transport refrigeration units (TRUs), and forklifts.

EV fleet customers choose the amount of power they need—like a cell phone plan where you pay for an amount of data each month.

While the EV-HP rate isn’t quite ready for enrollment, it will be available for fleets that are beginning their electrification journey now. According to our Power Your Drive for Fleets electrification timeline, it can take between 11 and 13 months for fleets to submit an application, design and construct the charging infrastructure site, and activate the chargers—making it important for fleets to engage their utility early.

What are the real-world cost saving opportunities with EV-HP?

A key question most of our fleet customers ask when starting the electrification process is what cost savings can be expected when converting a diesel fleet to an EV fleet. However, it’s not a question that can be easily answered given the number of inputs that go into calculating the total cost of ownership (TCO) of a vehicle. For example, repair and maintenance costs for diesel trucks can represent a larger chunk of TCO compared to EVs.

The fuel cost is approximately $1.35 per diesel-gallon equivalent when “fueling” with electricity compared to $3.50 for diesel.

So how does this translate to the cost of diesel versus electricity as a fuel source? It starts with breaking down each gallon into miles. In California, the average price of diesel is hovering around $3.50 per gallon. Let’s assume a diesel truck drives six miles on the road for every gallon it uses. If we take $3.50 per gallon divided by 6 miles, each mile costs approximately $0.58. For an electric truck, you can expect 1.4 kWh expended per mile and time-of-use energy charges on the new EV-HP rate range between $0.10 to $0.19 per kWh. If we assume an average of $0.15 per kWh for 6 miles, you are seeing a fuel cost of approximately $1.35 per diesel-gallon equivalent when “fueling” with electricity compared to $3.50 for fueling with diesel.

To expand the above example out to a month of fuel costs for a fleet of vehicles, let’s assume the following:

  • 50 electric medium-duty vehicles, expending 1.4 kWh per mile
  • 50 chargers with 10 kW per charger energy demand
  • 50 miles driven per vehicle per day (Mon-Fri)
  • Vehicles charge between 10 p.m. and 5 a.m.

electricty rates compared to diesel costs

(Note these are samples and results will vary)

Of course, there are the cost of the EVs themselves, and the required charging infrastructure, both of which have higher upfront costs compared to diesel. However, there are grants and incentives available at the local, state, and federal level that can help fleets buy down the cost of electrification, while providing benefits to their employees and the communities that they serve.

Upcoming webinar to learn more about the EV-HP rate

To learn more about the EV-HP rate, register for our upcoming webinar on February 11, 2021 at 10:00 a.m. The webinar will discuss the savings opportunity for various fleet types compared to diesel, how the cost of electricity impacts total cost of ownership of EV fleets, and eligibility requirements of the new rates. For more information and to register, visit act-news.com/webinar/fleet-friendly-electricity-rates-sdge 

Learn more about SDG&E’s new rates here and the Power Your Drive for Fleets program here.