Emerging Market: Electric Vehicle (EV)

1. Emerging Market: Electric Vehicle (EV) General Concepts and Market Design Considerations

2. Presentation • Electric Vehicle (EV) General Concepts • Charging Methodologies • Emerging Market Billing Designs • Load Management Concerns • Two core Market Designs for NBU consideration • Market Design Challenges

3. The Baker Electric: 1899-191514 mph 50 mi $2,300

4. Facts: A Plug-In Electric vehicle is either: 1. All electric vehicle (EV or BEV)-battery only 2. Hybrid electric vehicle (PHEV or EREV)-battery and internal combustion engine combination Driving Statistics-PEVs have ample range to serve commuters • 50% drive 25 miles or less/day • 80% drive 50 miles or less/day From DOT 1990 Nationwide Personal Transportation Survey PricewaterhouseCoopers estimates that by 2020 PEVs could represent between two and five percent of the total output of light vehicles  (July 2009 study)

5. Annual Energy Usage Nissan Leaf (EV)-opening in Houston Chevy Volt (PHEV)-opening in Austin Plasma TV • 623 kWh/yr • 40 mile/charge • 1,890 kWh/yr • 100 mile/charge • 2,964 kWh/yr • TV set top box (DVD, HD drives) • 263 kWh/yr

7. Tesla Roadster 0-60 mph in 3.7 seconds with 245 miles per charge

8. The Baker Electric: 1899-1915

9. Benefits of PEVs(Plug in electric Vehicles): • Less expensive than gasoline vehicles to drive • Gasoline: 10 cents/mile (30 MPG vehicle @$3.00/gallon) • PEV: 2.5 cents/mile (10 cents/kWh) • PEVs are cleaner than gasoline vehicles • Emit less nitrous oxide and carbon dioxide emissions • Curb consumption of foreign oil • PEVs charge primarily at night when wind blows strongest-opportunity to utilize wind power as a transportation fuel

10. The Great Electric Car Quandary: • How to Build a Charging Infrastructure Before Demand Grows • Dozens of new electric-vehicle models from General Motors, Ford, Toyota and others are expected to hit the streets within the next couple of years. Will there be enough juice to keep them moving? • Price Ranges 28k -200k

11. Charging an EV at home • Customers can and will tap into their homes power supply • Installation of equipment at home: $2,500 • Power Requirements (Level 2 is most popular choice) • Level 1: 120 V, 1.4kW (hair dryer) • Level 2: 240 V, 3.3 or 6.6 kW (clothes dryer)

12. Charge needed to completely fill tank • Chevy Volt: • Level 1: 8-9 hours • Level 2: 3 hours • Nissan Leaf: • Level 1: 20 hours • Level 2: 8 hours

13. Public Charging Stations

17. Charging away from home • Design concept is for “Topping Off”-not filling up • General Market direction is to limit time at a station so others can Top Off. • Level 1: 2 hours generally accepted as maximum time • Level 2: 1 hour generally accepted as maximum time • DC charging station: 30 minutes generally accepted • Penalties or extra charges apply for over-staying time at station

18. Market Pricing • Two Basic Billing Concepts Appearing • Pay at Station: • Sign up with a vendor • Use a swipe card provided by vendor • Use a credit card (smart chip or by phone) • Package Agreements (three year contracts): • $49: charge from home, customer pays kWh usage but vendor pays for install and maintenance of equipment • $79: same as $49 and can charge at vendor’s public stations for free • $89: same as $79 and customer receives a rebate for all kWh used for home charging

19. Innovation: Internet and Electricity • Professor Robert Metcalfe, new Professor of Innovation at the Cockrell School of Engineering UT Austin, Creator of Ethernet • Striking market development similarities • Innovation driven by entrepreneurs and investors • Attempts to restrict the market from growth were left behind • Token Rings,Copper lines,Ma Bell • Capacity restrictions ….remember the day • of punch card programs,of 9.6 kilobit lines • Today…bandwidth is superfluous..YouTube…movies on demand

20. Edison vs Westinghouse • Competitive environments drive technological solutions • DC vs AC • Direct Current was the early technological solution and the market was being established and significant investments made. Edison staked his work and business on DC…it had limitations of design for the market • Alternating Current solved and then exploited the physical limitations of DC and won the market

21. Edison vs Westinghouse • Competitive environments drive technological solutions • EV market hurdles (Fear, Uncertainty, Doubt) • Fear: System infrastructure cannot sustain load • Uncertainty: • Build and they will come? The investors hope!! • EV charging stations are just pacifiers • Do EV’s really have a future? • Leading edge solutions (Edison) or clear market confirmation of technology with minimal limitations (Westinghouse)

22. Potential impact: Lines, Transformers, & Clustering • Distribution system infrastructure may be insufficient: • Distribution transformers excess loading and cool down periods • Time of day charging from home may be at or near NBU’s peak if not managed • Clustering of users does occur • EV’s do not tend to be random across a system but rather neighborhoods trend with EV’s • Result is that multiple EV loads are likely to appear on one transformer at the residential level • In the 1920’s there was a quantum leap of electric conveniences created for market….the concerns were similar…lighting was one thing… but electric everything was not doable.

23. Distribution System Demand • Ten to Twenty year build out of EV market expected • As more electric vehicles enter the market, we can expect increased demand of electricity that will likely effect the distribution system infrastructure. • The emerging market will not slow down for limiting rules, rather they will demand and expect convenience. Unlimited cell minutes, anytime… • An electric vehicle charging infrastructure solution should provide a mechanism for recouping increased infrastructure needs and electric energy costs. • Residential demand charge • TOU pricing at Residential level • Separate rate for EV charging stations

24. Market Design Concerns: Cont. • Don’t hinder, assist the customer to achieve convenience and ease of use at minimal costs in order to keep up with the market. • Don’t limit the market for your utilities convenience of investment, system management, rather …prepare and deal with it now and as it grows. • An electric vehicle charging infrastructure solution should provide a mechanism for recouping increased infrastructure needs and electric energy costs. • Residential demand charge • TOU pricing at Residential level • Separate rate for EV charging stations

25. Emerging Market Designs:Customer Choices Trend: Emerging vendors try to isolate market share in its early development stage to develop or own customer loyalty early. • Vendor promotes exclusive use of charging stations • Vendor restricts their EV stations using package agreements (like cell phone plans) to only their customers • Vendor does not allow other non-customers to charge at their stations • Vendor opens their EV stations or Non-Exclusive use: • Vendor accepts any new customers but they still must sign up with owner of EV station before being allowed to charge. (Concept is similar to an Exxon gas station only allowing customers with an Exxon CC to buy gas BUT they will sign you up immediately and let you fillup)

26. Emerging Market Designs: NBU sees two primary Designs to consider • Commercial Account Design • The EV charging station is managed as just another commercial account, perhaps with its own rate structure • Vendor pays for installation of all equipment • Vendor pays for infrastructure improvements • Vendor manages and maintains all equipment past delivery point • NBU Owned Design • NBU owns the EV charging station • Install systems • Maintain all physical aspects of station • Contract with vendor for interface management • Contract with vendor for payment and collection from users

27. Commercial Account Design If vendor sells only “packages” to consumers, not kWh usage, is this considered to be selling of kWh at a profit? • Vendor NRG’s position: • It is not selling power at a profit, it is selling a packaged service, regardless of kWh consumed. • NRG pays the utility bill to NBU, customers buy packages, not kWh. • Could it be considered no different than leasing an all bills paid apartment? • PUC is allowing this model to be used in the deregulated market.

28. NRG • NRG has not been stopped in using this model in Houston’s deregulated market. • More problems arise than can be easily or quickly solved for the vendor in a deregulated market if customers are allowed to choose their power supplier at the EV Station. • Therefore concept of EV service packages or pay as you go works more easily and conveniently for both vendor and customer.

29. NBU Owned Design • City of NB Sec. 130-10. - Submetering and resale of utility services. • It shall be unlawful for any person, firm, corporation, association, or governmental agency to submeter and resell utility services for a profit as delivered by NBU to any entity. • NBU currently already has RV parks, and other entities submetering electric but they are theoretically recouping only billed services from NBU. • PUCT Submetering • The rental agreement for every submeteredresidence must include information on submetering and a copy of the Public Utility Commission rules (Section 25.142) • www.puc.state.tx.us/rules/subrules/electric/index.cfm

30. Market Design:Municipality Owned • No issues develop related to ordinances or PUC rules