Creative Rate Design Is the Key for Electric Vehicle Acceptance by Stakeholders

As two of the most important stakeholders in the EV market, the interests of utilities and customers are intertwined. EV customers prioritize convenient and affordable electricity for charging, and utilities want to attract infrastructure to their service territories and recover the appropriate amount of revenue.

In an article for Energy Intel, published by the Association of Energy Services Professionals (AESP), Guidehouse experts Margot Everett, Kristina Stanford, and Natasha Herring explain how harmonizing stakeholder objectives, modern rate design principles, and cost of service requirements hold the key to designing EV rates that provide significant benefits.

“Electricity rates are a critical driver of customer behavior and can provide important signals for how customers can manage their utility bills and monetize their investments in EVs,” explained Everett, director at Guidehouse. “When utilities design their rates with high levels of transparency, customers can see what actions are aligned with which financial signals.”

The article outlines progressive rate design elements such as product differentiation, cost allocation, customer segmentation, cost attribution, and incentive design. Linked together, they form a cohesive pricing framework.

“Rate design for EVs does not have a one-size-fits-all solution,” Everett added. “EV adoption extends to a wide variety of customer segments and load profiles.”