AEP Sustainability - Beneficial Electrification

Beneficial Electrification

Electrification of end-use technologies enables customers to be more energy efficient through the use of more electricity while replacing direct fossil fuel use.

Electrification of end-use technologies in industry, buildings and the transportation sector, combined with cleaner electricity from the grid, creates a clear pathway for a low-carbon future. This enables customers to be more energy efficient through the use of more electricity while replacing direct fossil fuel use. This trend will continue as society looks to replace fossil fuels with clean electricity to heat homes and buildings, power vehicles and operate industrial equipment. The road to beneficial electrification is complex and challenging, but the long-term reward is significant for the environment, society and business.

Increased adoption of electrification technologies such as electric vehicles (EVs) require effective planning to ensure infrastructure is in place to meet our customers’ needs and the right policies and regulations to support them. Further, we are working with technology and research partners, customers, policymakers and other stakeholders to understand the implications and opportunities of large-scale electrification as we transform to a digital economy. Through this engagement, we can identify and support opportunities for strategic electrification, maximize benefits for all customers and ensure development of policies and regulations that help our customers and communities.

In 2019, the West Virginia Public Service Commission expressed support to expand Appalachian Power’s (APCo) Energy Efficiency (EE) program to include Beneficial Electrification (BE). This policy demonstrates an important shift in expanding the focus of Energy Efficiency programs from simply a reduction in electricity consumption toward helping customers achieve reductions in overall energy use, costs and environmental impacts. The EE stakeholder process will be used to consider the appropriate BE applications to include in the program.

For more information about beneficial electrification technologies and resources, visit www.energyconversionhub.com.

The electric mobility revolution continues to accelerate throughout the world and in our service territory. Electric vehicle (EV) adoption provides substantial environmental and economic benefits for society. It will also have substantial impacts on many major industries, including the electric utility industry.

According to the Edison Electric Institute (EEI), there are more than 1.3 million EVs on the road today in the U.S. By 2030, the total number of EVs will climb above 18 million. Our objective is to increase adoption of electric transportation in our service territory and provide charging options that optimize the use of the grid for the benefit of all customers. To increase adoption of EVs in our service territory, AEP is helping raise awareness through education about the benefits of EVs with customers. In 2019, we launched the Electric Car Education and Awareness campaign throughout most of the AEP enterprise. The campaign, which continues through 2020, focuses on four key messages: affordable to buy, affordable to maintain, easy to refuel and easy to get around. The web-based campaign includes event materials, social animations, fleet case studies and a targeted three-month digital campaign. We are installing EV charging options where we park our personal and company vehicles, and we are helping mature transportation corridors to enable long-distance electric travel for all drivers.

We are seeing greater adoption – confirming our growth forecasts. At the end of 2019, there were nearly 14,000 registered EVs across our service territory, with nearly half of those in Ohio. By 2030, we estimate EVs to make up 1% to 3% of all vehicles in our service territory.

Our commitment to electrification includes providing tools and guidance to help customers better manage their vehicle fleets, such as www.electriccarcalculator.com. These tools show that replacing a vehicle with a similar EV can provide a 50% reduction in first-year fuel cost, as well as a 100% reduction in tailpipe emissions. When fleet managers understand these benefits specific to their needs, they are empowered to make informed decisions about EVs that benefit their businesses, customers and communities.

Across much of our service territory, we offer customers options and rates that encourage the efficient use of the grid and make it affordable for customers to charge their EVs. For example, by offering rates that encourage overnight charging, customers can save money because they are charging during off-peak periods. This also helps us better manage the demand on the grid to ensure reliability, which benefits all of our customers. Such EV-friendly rates are the types of initiatives that will enable quicker adoption.

We believe AEP is well-positioned to play an important role in supporting EV market development. We are actively working with policymakers, automakers and customers to develop and implement incentive programs to jump-start and support adoption of EVs in our service territories.

In 2019, AEP continued to expand the use of EVs throughout our own company, including integration of EVs into our fleet of work vehicles.

We continued working on EV programs across several markets to achieve benefits for all customers and reduce charging costs for drivers. In 2020, Indiana Michigan Power (I&M) successfully implemented new tariffs for its customers, while APCo received approval in 2019 for a new EV tariff in Virginia.

In 2019, I&M assisted Three Rivers Community Schools in Michigan to develop the charging infrastructure for the school district’s two new electric buses.

EV program activities include:

  • In 2019, Oklahoma’s governor extended the state’s tax credit for alternative fuel vehicles through 2027. Oklahomans adopting EVs, or other “clean-burning” vehicles, will receive a tax credit calculated according to the vehicle’s weight.
  • We support the development of an electric vehicle infrastructure that all communities can access. AEP Ohio’s $10 million fund for charging infrastructure includes deployment targets for priority segments, such as multi-family housing, workplaces and disadvantaged communities. The fund is nearly fully subscribed.
  • In 2020, we will be actively involved in supporting various EV tax credits at the state and federal levels. The Ohio Senate is considering a tax credit for the purchase of electric vehicles and charging stations for either commercial or personal use. As the federal EV tax credit expires for manufacturers such as Tesla and GM, which have sold over 200,000 EVs, we are working with legislators and others to extend this program.
  • In Louisiana, SporTran, the City of Shreveport’s transportation system, debuted three new electric buses, bringing its EV fleet to eight. Southwestern Electric Power Company (SWEPCO) provided a $150,000 matching grant to SporTran to purchase an EV charger for the city’s electric bus fleet. The new-generation charger will enable electric buses to charge in just 30-45 minutes, compared to the four- to five-hour charge time required previously. Shreveport’s electric bus fleet is the largest in Louisiana.
  • In 2019, I&M assisted Three Rivers Community Schools in Michigan to develop the charging infrastructure for the school district’s two new electric buses. It required a transformer upgrade and identifying the best locations to install the chargers. The new buses are quieter, cost less to maintain and provide health benefits by reducing exposure to diesel exhaust fumes.
  • In Virginia, the residential off-peak rate schedule was approved in 2019. The rate schedule offers reduced cost electricity for EV customers who choose to charge off-peak, while allowing them to keep their household on a traditional rate schedule. Additional off-peak use reduces costs for other customers through better utilization of the grid.
  • Approved in 2020, the IM PluggedIn Pilot is a robust program that plays an important role in encouraging plug-in electric vehicle adoption and incenting off-peak charging behavior in a way that optimizes the overall electric system. Under the pilot, I&M will provide residential and small commercial customers a rebate to offset wiring and charger installation. Multi-family dwellings and other commercial and industrial customers will also be part of the pilot program and eligible to take advantage of one of two incentive options to help offset charging infrastructure costs. I&M is currently working to launch the program.