Electric vehicles are helping drive down U.S. electricity bills, according to a new study. They bring a lot of income to utilities, which, due to the ban on unlimited profits, are forced to reduce rates for all users.
According to a recent study funded by the Natural Resources Defense Council, electric vehicle owners make a huge positive contribution not only by reducing emissions of harmful substances into the atmosphere, but also by helping reduce utility bills for all other users of the grid. Synapse Energy Economics researchers focused on three California utilities that serve many households with electric vehicles (more than 735,000 at the end of 2021), according to Business Insider. They compared the costs of providing energy to those EVs with the revenue customers generated and found that from 2012 to 2021, EV owners netted utilities $1.7 billion in pure profit.
Since utilities are highly regulated and their revenues are limited, they need to return excess profits to their customers in the form of lower rates.
The key point is that while EV consumers consume significantly more electricity than other households, they are relatively cheap for utilities considering the costs of generating, transmitting, and distributing energy. Electric vehicle drivers tend to charge their cars during off-peak hours, such as at night when there is excess power and it is cheap.
“Because electric vehicles don't add a lot of additional capacity costs, because they're primarily charging off-peak, what they're doing is they're more efficiently using the electric grid infrastructure,” said Melissa Whited, one of the study's authors.
Other studies have come to similar conclusions. A 2021 report from consulting firm MJ Bradley & Associates found that increasing the number of electric vehicles charging in Nevada could lower every household's annual utility bill by $123 by 2050.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.