MJB&A Analyzes State-Wide Costs and Benefits of Plug-in Vehicles in Colorado

MJB&A has evaluated the costs and benefits of increased penetration of plug-in electric vehicles (PEV) in the state of Colorado. The analysis projects societal costs and benefits for two different PEV penetration levels between 2030 and 2050. These include a “Moderate PEV” scenario that is based upon near-term (2025) Zero Emission Vehicle goals adopted by states that together comprise about a third of the automotive market, and a “High PEV” scenario that is based on the PEV penetration that would be required to achieve long-term goals for economy wide greenhouse gas (GHG) reduction of 80 percent from 2005 levels by 2050.

Compared to a business as usual baseline of continued gasoline car use, this study estimates the benefits that would accrue to all electric utility customers in Colorado due to increased utility revenues from PEV charging. This revenue could be used to support operation and maintenance of the electrical grid, thus reducing the need for future electricity rate increases. In addition, the study estimates the annual financial benefits to Colorado drivers – from fuel and maintenance cost savings compared to owning gasoline vehicles, and societal benefits resulting from reduced GHG emissions.

These benefits are estimated for a baseline vehicle charging scenario in which Colorado drivers plug in and start to charge their vehicles as soon as they arrive at home or work. The study also evaluates the additional benefits that could be achieved by providing Colorado drivers with price signals or incentives to delay the start of PEV charging until after the daily peak in electricity demand (off-peak charging). Off-peak charging avoids significant vehicle charging load during periods of high electricity demand and avoids potentially costly electricity grid upgrades. As such, off-peak PEV charging can increase the benefits to all Colorado utility customers by shifting PEV charging to hours when the grid is underutilized and the cost of electricity is low.

The analysis indicates that under the High PEV scenario with off-peak charging the average Colorado household could realize nearly $80 in annual utility bill savings in 2050. Cumulative utility bill savings could exceed $4.1 billion state-wide by 2050 (net present value) under this scenario, with an additional $29.1 billion in cumulative savings for Colorado drivers due to reduced annual vehicle operating costs.

An executive summary of the Colorado analysis is available here.

The full report of the Colorado analysis is available here.

A blog post from E2 (Environmental Entrepreneurs) that discusses the Colorado results can be found here.

This study was conducted by M.J. Bradley & Associates for the Natural Resources Defense Council; it is intended to provide input to state policy discussions about actions required to promote further adoption of electric vehicles.