EV Owners in California to Feel the Shock of Higher Electricity Rates

Woe betide the electric car. Outpaced by their petrol-powered cousins in the 1900s, saddled with heavy and potentially dangerous batteries in the 1970s and crushed in the name of the Almighty Dollar in the 1990s, it’s been a rough road from there to here.

And now, on the dawn of a new age where electric cars seem poised to take their rightful place alongside gasoline cars, the electricity companies are about to throw a wrench into the works. If you live in California and intend to buy a plug-in hybrid Toyota Prius or Chevrolet Volt or an all-electric Nissan Leaf, you could be in for a...shock.

If the energy giants have their way, the Chevy Cobalt, which would have to rate on my list as one of the least desirable cars built by GM, is more economical to own or operate than any of the above. The reason?

Essentially, The California government has approved its energy providers to impose higher rates on customers who exceed, “typical household levels” of energy use all in the name of conservation. So if, for example, you spend eight hours a night recharging your electric car, you’ll find yourself classed as one of these excess customers.

Wham, bam, the electricity companies charge you more than Mr. Joe Public next door who drives a Toyota Sienna and still has to pay for the good oil. And contrary to what you may of heard, it doesn’t matter if you recharge your car at night when the rates are lower; you’re still gonna take a hit to your hip pocket.

And it’s not like the California legislature is rushing to correct this oversight.

Wally Tyner, the James and Lois Ackerman Professor of Agricultural Economics, said that to make the Volt more economical than the Prius or the Cobalt, oil prices would have rise to between $171 and $254 per barrel, depending on which electricity pricing system is being used. Californians for example, pay an average of 14.42 cents per kilowatt hour, which is about 35 percent higher than the national average.

"People who view the Volt as green will pay $10,000 more over the lifetime of the car because it's green," Tyner said. "Most consumers will look at the numbers and won't pay that."

So until you’ve taken a pen and paper and worked out the real cost of owning an EV in California, maybe keep that Geo Metro for a while longer.

Source: Purdue University