Love them or hate them, electric vehicles are likely here to stay.
While electric and plug-in hybrid electric vehicles currently make up less than one percent of the cars and trucks on Iowa’s roads, those numbers are expected to climb dramatically over the coming decade.
Legacy automakers including Ford, General Motors, and Toyota have all announced multibillion dollar investments into developing new electric vehicles (EV) and battery technologies. As costs drop and consumers become increasingly comfortable with EVs, industry analysts expect to see double digit yearly growth, with some predicting electric vehicle sales to possibly double annually.
Currently, the state is adding approximately 4,000 EVs each year. Locally, Midland Power Cooperative’s seven largest counties saw an increase of 45 percent in EV registrations from 2020-2021.
While there are still relatively few EVs on Midland’s lines, that’s poised to change. Nationally, 50 percent of consumers planning to purchase a vehicle in the next 24 months say they’re considering an EV or hybrid vehicle.
Last year’s passage of the Inflation Reduction Act is also helping drive demand. The act cemented and expanded the existing $7,500 tax credit for new electric vehicles, removing the lifetime cap per manufacturer. It also makes used electric vehicles eligible for a $4,000 tax credit, a move industry watchers say will help boost traditionally low resale values.
PLANNING FOR GROWTH
To ensure Midland’s distribution system is ready to accommodate this potential growth, the co-op formed a special employee EV task force last fall. Charged with performing a detailed analysis on the possible impacts of widespread EV adoption in our area, the panel was comprised of employees from both the energy services and engineering departments. Together, they worked to identify the unique challenges and opportunities the rapid adoption of EVs could pose. The team also evaluated best practices and alternative rate structures at co-ops around the state and country.
Among their key findings were:
• The need to explore new tools and rate structures to help members better understand how their charging habits impact the co-op’s bottom line.
• Planning for near term potential load growth primarily in the Story County area, to ensure adequate substation and distribution capacity for both residential and commercial chargers.
• Developing educational outreach programs for members and employees.
“We recognize that electric vehicles have benefits and drawbacks,” said Larry Beilke, Midland Power energy service advisor and chair of the EV task force. “Our goal as a co-op is to be a resource for those members who have EV questions.
“Just like we support an ‘all of the above' strategy when it comes to electric generation, we also support a variety of fuel sources, whether that’s locally produced ethanol, traditional gasoline, or EVs. We’re here to help our members separate fact from fiction and make the best choice for their lifestyle.”
To help ensure Midland’s employees are up to date on the latest EV developments, Beilke and his team have launched a series of internal education efforts. These kicked off recently with a visit to the Boone office from Ames Ford Lincoln who brought along a Ford F-150 Lightning. Employees had the chance to learn firsthand about the vehicle and its capabilities and limitations. Unsurprisingly, the employees expressed many of the same concerns voiced nationally.
According to a 2021 Pew Research Center report, consumers most frequently cite price and reliability as their two biggest hurdles preventing them from purchasing an electric vehicle. Locally, members often report the area’s lack of charging infrastructure and vehicle limitations, such as driving range, towing capacity, and cold weather performance, as their biggest concerns. However, as auto manufacturers make advancements in battery technology, vehicle costs are expected to drop while performance improves.
“This is an industry that’s literally changing every day,” said Roger Hammen, Midland Power manager of energy services. “The technology is constantly changing, and we need to be ready. We know members are curious about electric vehicles and how they’ll impact our cooperative.”
IMPACT ON THE GRID
Nationally, the growth in electric vehicles poses a challenge for electric utilities. Traditional baseload generation resources, such as coal, nuclear, and natural gas plants are increasingly being replaced by more intermittent renewable resources, such as solar and wind energy. While these alternative resources may have environmental benefits, they lack the needed around-the-clock reliability members depend on. This can become especially problematic during periods of high demand.
This December, unseasonably cold temperatures coupled with a lack of wind production caused Southwest Power Pool, the regional balancing authority that oversees the northern portion of Midland’s service area, to issue an energy emergency alert. While blackouts were thankfully averted, the situation highlights the importance of smart energy policies that balance both traditional and renewable energy sources.
Unfortunately, widespread adoption of electric vehicles has the potential to exacerbate the situation. While many of today’s EVs require a charge rate in the 7-kilowatt range, some models go much higher, including the Ford Lightning which charges at up to 19.2 kW. By comparison, an electric clothes dryer or a home air conditioner use roughly 2.5 kW, while a residential heat pump or electric water heater may use 5-10 kW. However, unlike heat pumps or water heaters that use electricity periodically throughout the day, often when the electric grid has an abundance of power, electric vehicles are frequently charged at the very time the electric grid is stretched thinnest.
Commuters returning home from work in the evening often plug in their vehicle before heading inside to turn on the lights, turn the thermostat up (or down in the summer), start dinner, or run a load of laundry. All this additional usage contributes to increased wholesale demand charges from Midland’s power suppliers, costs that are ultimately reflected in the co-op’s rates.
With the majority of current electric vehicle owners reporting they’re very or somewhat likely to add a second electric vehicle in the future according to Pew Research, educating members about the best times of day to charge is critical.
On the flip side, electric vehicles also represent a tremendous opportunity for the cooperative. Members are increasingly modifying their charging habits by programming their vehicles or chargers to charge during off peak hours, such as late at night or during the day when solar energy is most abundant. This additional load, when appropriately timed, has the potential to provide a new source of revenue for the co-op, helping to keep rates stable. Members also benefit from the convenience of charging at home while also seeing significant savings on their fuel bills.
“Over the coming months, we’ll be creating additional resources for members interested in electric vehicles,” Beilke said. “Just like we tell members to call us first when considering installing solar or putting in a new HVAC system, we hope members will turn to us when thinking about buying an EV. We’re here to help.”
To encourage members to adopt smart charging habits and help prepare for possible EV specific programs in the future, Midland offers members a rebate of up to $500 on a level II charger. Members are also asked to notify the co-op when adding an electric vehicle to our lines. This data enables the co-op to better plan future system upgrades, helping ensure reliable service.
For more information and to register your EV, visit MidlandPower.coop/EV or call our energy service team at (800) 833-8876.