Plug-in Electric Vehicle Cost-Benefit Analysis: New Mexico

MJB&A has evaluated the costs and benefits of increased penetration of plug-in electric vehicles (PEV) in the state of New Mexico. The study estimated the benefits that would accrue to all electric utility customers in New Mexico due to greater utilization of the electric grid during off-peak hours, and increased utility revenues from PEV charging. In addition, the study estimated the annual financial benefits to New Mexico drivers from owning PEVs–from fuel and maintenance cost savings compared to owning gasoline vehicles. The study also estimated the societal benefits resulting from reduced gasoline consumption and their associated reduction in emissions.

Two different penetration levels between 2030 and 2050 are utilized to estimate costs and benefits. The Moderate PEV scenario is based on New Mexico’s participation in a program similar to the 8-state ZEV Memorandum of Understanding. The “High PEV” scenario includes more aggressive PEV penetration levels - reaching 90 percent by 2050 - that would be required to achieve deep reductions in vehicle air pollution emissions.

If New Mexico PEV adoption follows the moderate trajectory, the net present value of cumulative net benefits from greater PEV use in New Mexico will exceed $5.3 billion state-wide by 2050. If PEV adoption were to hit 90 percent by 2050 (High PEV scenario), the net present value of cumulative net benefits from greater PEV use in New Mexico could exceed $30 billion state-wide by 2050.

A large portion of the direct financial benefits to New Mexico drivers derives from reduced gasoline use - from purchase of lower cost, locally produced electricity instead of gasoline imported to the state. Under the High PEV scenario, PEVs will reduce cumulative gasoline use in the state by more than 6 billion gallons through 2050, helping to promote energy security and independence, and keeping more of vehicle owners’ money in the local economy, thus generating even greater economic impact.

This study was conducted by M.J. Bradley & Associates for the Natural Resources Defense Council, and Southwest Energy Efficiency Project (SWEEP); it is intended to provide input to state policy decisions about actions required to promote further adoption of electric vehicles.

SWEEP is a public-interest organization promoting greater energy efficiency and clean transportation in New Mexico, Colorado, Nevada, New Mexico, Utah, and Wyoming. SWEEP collaborates with utilities, state and local governments, environmental groups, national laboratories, businesses, and other energy experts.

The full report of the New Mexico analysis is available here.