Like any new technology, electric vehicles have pluses and minuses. Their chief benefits are that they emit less air pollution, including smog-forming and greenhouse gases. They also point the way toward using renewable energy for transportation instead of oil, a finite resource that’s increasingly imported. Their main drawbacks are limited driving range--due to physical constraints on how much energy their batteries can hold--and higher initial cost. Plug-in hybrid technology--which allows motorists to continue to drive once the battery charge runs down with power made by an onboard gasoline engine--has solved the range problem. However, cost concerns remain. Government policy makers have sought to lower the cost hurdle with subsidies. But even after a $7,500 federal incentive the cars still cost considerably more than comparable gasoline-powered models, or even hybrid electric vehicles like the Toyota Prius. This leaves all but the most dedicated environmentalists with fat checkbooks calculating the payback period based on their driving habits when they decide whether or not to go electric. Thus, the success of electric vehicles is likely to turn on whether consumers can clearly see direct pocketbook savings on gasoline during the time they plan to drive their electric cars that at least covers their initial extra cost. The good news is that the power to run an electric vehicle a mile costs a fraction of what the equivalent amount of gasoline costs, according to Craig Childers, California Air Resources Board air resources engineer. However, that may not be good enough when it comes to the payback period for many motorists. That’s why the Air Board maintains that the California Public Utilities Commission should establish a maximum off peak electric vehicle charging tariff of 7 cents/kWh. “At that low rate,” explained Childers, “it makes it very attractive.” Most motorists would be able to recoup their extra expense for an electric vehicle in three to five years, he claimed. To help motorists decide if an electric vehicle is the right economic choice, Southern California Edison has developed a handy online “plug-in car rate assistant.” The easy-to- use calculator on the utility’s web site is one of the first of its kind in the nation, according to Steven Powell, Edison strategic planning manager for plug-in vehicle readiness. I entered my particular data and found that if I were to buy an all electric Nissan LEAF my power bill would go up by an average of about $54 a month, but I would no longer be spending $131 on gasoline, for a net monthly savings of $77, or $924 a year at today’s gasoline prices. That’s compared to my Toyota Camry, a car I wouldn’t buy again since I want something smaller and more energy efficient now that my daughters drive their own cars. The Camry gets about 24 miles to the gallon the way I drive it. So I compared these two choices in Edison’s rate calculator. First, I put in the data for the peppy new Ford Fiesta, which boasts sporty European styling and gets 32 miles per gallon. It’s good enough for me, particularly with a price tag of just $15,000. The LEAF--about the same size--would cost $33,000 after all the tax incentives. Running the new comparison, my net monthly savings on energy for my car dropped to $44, or $528 a year. At today’s gasoline price, it would take me 34 years to recoup the extra money I would spend on the LEAF, driving about 12,000 miles a year. But I realize that $3.15 a gallon for gas over the next ten years is probably unrealistic. So, I assumed gasoline would cost an average of $6 a gallon, rising to perhaps as high as $9 or $10 a gallon by 2020. Running the numbers again, my monthly savings on energy for my car swelled to $134, or $1,608 a year. The payback period dropped to about 11 years. Next, I assumed gasoline at $6 a gallon and electricity at 7 cents/kWh for charging my electric vehicle, compared to the 11 cents I would pay today in Edison territory. I found that my monthly savings widened to about $154, or $1,848 a year. That brought the payback period down to about 9.7 years. If I moved to Pacific Gas & Electric territory, I’d get a quicker payback with off peak charging rates as low as 5 cents/kWh. But, then I’d have to sell my house in a down market and still pay more than I owe to get a new one. Consequently, I took that option off the table and didn’t bother to do the payback math. That brought me to the last question I had to ponder before signing any vehicle purchase contract. How likely is it that the price of baseload power in my area will decline to 7 cents/kWh at my residential outlet? The California Air Resources Board projects the price of power will nudge up under a carbon cap-and-trade plan. California utilities are ending their cheap coal power contracts and moving to higher cost natural gas and renewable energy (see related story on page 5). Perhaps regulators will jigger rates so that non-electric vehicle drivers slightly subsidize those who purchase the battery-powered vehicles. But could it become implausible to maintain the cross-subsidy once electric vehicles become wildly popular as regulators hope? In the final analysis and leaving all indirect costs and moral sentiment off the table, I decided on a sheer immediate pocketbook basis to simply hold onto the Camry for now. Sure, it’s getting old, but it’s paid for and gasoline is still cheap.
