Who'll Pay for All Those New Backyard Transformers?

By Bill Moore

Posted: 13 Aug 2010

I had a very interesting telephone conservation with a long-time acquaintance in Mexico this week. He's working on some very exciting electric vehicle projects that he says I'll be able to discuss on EV World later this Fall. But part of our conversation had to do with the attitude of electric power companies towards electric-drive vehicles. What he said didn't come so much as a surprise as it was a disappointment, an understandable one, to be sure, but disappointing nonetheless.

The gist of our conversation was this. Most electric power companies, at least those responsible for distribution of electricity to the community, are largely ambivalent about the coming of electrically-powered cars and trucks: vehicles like the Volt and the LEAF. Yes, the advent of battery and plug-in hybrids will mean they'll be able to better monetize their base-load generation capacity, which often has to virtually give away power at night. Owners of electric cars will be encouraged through various pricing mechanisms to plug in their cars in the evening, recharging them overnight. Presumably smart grid and charging systems will figure out the best time and rates at which to do this, while the owner is asleep. If all works according to plan, they'll wake up with a fully-charged battery, ready for the day's commute.

Certainly, that's the way it works in principle here in the Moore household, although my wife and I are the 'intelligence' behind our charging system, which consists of a heavy-duty, 110V power cable we plug into our Plug-In Conversions Corporation-converted Toyota Prius. We plug in the car each night just as we're headed to bed, usually around 10:30 to 11:00 PM. Next morning around 7:00 AM, one of us unplugs it; all the charging bars on the dashboard display glow green indicating the battery is full.

But what happens when more than one plug-in car, especially ones with batteries two-to-four times the size of the 6.1kWh pack in our car, show up in the neighborhood? Here, contends mi amigo in Mexico, things start to get serious. A Volt driven 40 miles a day will require 8kWh of energy to recharge, a LEAF probably similar. Put three of these cars on the same block and you're taking about adding roughly the equivalent of another home; approximately 24kWh of energy.

Available electric power isn't the problem. The U.S. power has sufficient spare capacity to literally handle tens of millions of electric cars and trucks IF they charge during off peak hours. No, the issue turns out to be the local power transformer in the corner of your lot. Those transformers are designed to operate from 17-20 years before having to be replaced, but this can be reduced to under 10 years when you add the extra load of several electric cars on each.

What my friend is hearing is that utilities are expressing reluctance to go to the expense of replacing perfectly good transformers and upgrading them to handle a neighborhood of electric cars. Supposedly they are asking themselves who should bear the cost and he's hearing they want consumers to pay it. Frankly, I find that conclusion distressing, but not improbable, given the howls we've been hearing of late from people who you'd think are smart enough to figure out that automotive manufacturers -- and consumers -- have little choice but to motor down the electric car avenue. There's a reason the Chinese want to have 15 million electric cars on their roads by 2020: it's called economic and national security. No, scream the critics, not only are the rest of us subsidizing a few rich yuppies fantasies with tax credits (which is bullshit), but now you're also asking us to pay for the cost of installing new, higher-capacity transformers for them?

Socialism! Or is that nepotism? Maybe it's just more Obama-ocracy?

Logic tells me that given the current price of the Volt and the LEAF and the focused manner in which GM and Nissan are carrying out their deployment plans, they have a pretty good sense of where these cars will be sold and plugged in. They have also nurtured relationships with cooperative, forward-thinking utilities who will likely be willing to upgrade neighborhood transformers when and where they are needed. Whether that cooperation translates to literally thousands of other power companies, large and small, certainly can be open to debate.

If I can offer any sense of reassurance to the White House and all the Tea Party conservatives out there on this question, I point to a recent study done by the Power Systems Engineering Research Center, entitled "Power System Level Impacts of Plug-In Hybrid Vehicles",in which they conclude,

If the failure rate of a specific hypothetical utility company with a fleet of 3 million transformers was originally 10% per year. Then assume that as the penetration of PHEVs reaches significant levels the failure rate of transformers increases to 17% per year (on average all transformers load increases due to one PHEV) the impact on the entire utility companies transformer fleet would increase significantly. Specifically, originally 10% failure rate indicates 300,000 transformers would fail in a single year. Increasing this failure rate to 17% would indicate 510,000 transformers would fail in a typical year with the added electric load due to PHEV.

In economic terms, consider an assumption that purchasing and installing a new transformer costs $750. Then replacing the original failed transformers required an annual budget of $225 million. Whereas, the increased number of failures including the PHEV electrical load would cost $382.5 million. This increase in utility company expenditures would be offset utility company added revenue generated by the added electric load demand created by the added PHEV. Assuming 3 million PHEVs each adding 16 kWh per day charge 8 cents per kWh represents added annual revenue of $1,401.6 million, indicating approximately, $1,019.1 million in net profit.

Hmmm… utilities could actually make a profit 'fueling' all those electric cars even after replacing half a million transformers? Isn't that capitalism?

However you look at it, our plug-in Prius needs only 2-4kWh of electric power at night to recharge its battery. That's enough to get my wife to and from work and costs us less an 20¢ a day in extra electric power. I suspect all the new LED and plasma televisions in the neighborhood place more of a strain on that transformer in my backyard than does our car, but I also realize we're just on the crest of a huge paradigm shift and that for those few of us privileged to own such remarkable vehicles, these are halcyon days indeed.

Someday, they're going to figure out how charge us for the gasoline taxes we're not paying anymore.

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