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October 24, 2011
Article Authored by Brattle Economists Addressing Impact of Plug-in Electric Vehicles Featured in October Issue of Public Utilities Fortnightly

An article authored by Brattle economists Ahmad Faruqui, Ryan Hledik, and Armando Levy and senior advisor Alan Madian discussing the near-term impact of plug-in electric vehicles (PEVs) on the distribution grid has been published in the October 2011 issue of Public Utilities Fortnightly.

In their article, “Smart Pricing, Smart Charging,” the authors address the potentially negative impact PEV adoption could have on electricity provision and explore the relationship between PEV charging behavior and time-of-use (TOU) rates. Whether PEVs will help or hinder electricity provision will hinge on the charging behavior of consumers, which will be determined by the rate structures offered by utilities and the responsiveness of PEV owners to those rate structures.

The authors conclude that while TOU rates may help reduce future grid reliability problems as PEVs penetrate the vehicle market, the extent to which properly designed rates could assist in maintaining grid reliability will remain unknown until experimental pilots are conducted to test PEV owners’ price responsiveness. The authors suggest a framework for conducting a well-designed pricing experiment to determine whether varying TOU rates will assist in maintaining grid reliability.