2015 Nissan Leaf, 2015 Toyota Prius
John Goreham's picture

Drastic rise in 2015 Massachusetts electricity costs making EVs impractical

On January 1st Massachusetts energy prices will jump by 22% for most residents. Do EVs make any sense in this key market?
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Last month we compared the costs per mile of the Prius, the top-selling green car on Earth, to the Nissan Leaf, the top selling electric vehicle on the planet. In our analysis, which used only the EPA’s official numbers for the fuel economy of the vehicles published at fueleconomy.gov, the Leaf edged out the Prius. The Leaf’s 5.6 cents per mile cost was just under the Prius’ cost of 5.8 cents per mile. Since that time, gasoline prices have dropped from about $2.90 to about $2.55. However, that will reverse. What will not be reversing any time soon is a new, highest in the nation, cost of electricity in Mass. which is about to increase by about 22%.

Readers who are fans of electric vehicles, and who don’t live in the region, poked holes in the story. They claimed that the EPA has mistakenly calculated the efficiency of EVs and that they do better in actual use. That may be true. Others claimed that the Prius does not live up to its EPA rating. We can’t agree with that claim. Perhaps the prior win by the Leaf should have been by a bigger spread, but it matters very little now since with the new cost of electricity the Prius will be less expensive in this market until prices go well beyond $3.00 per gallon of gas again. Electricity prices would also have to stabilize, which they appear not to be doing. The electricity cost increases are coming faster, not slower.

NSTAR is the electricity provider for the most populated parts of Mass, and for much of the geography as well. Starting on January 1st the total cost of a kWh including both generation cost and deliver will be about 24 cents. At current energy prices (January 1st 2015) in Mass., the Leaf’s cost per mile is 7.2 cents per mile and the Prius cost per mile is 5.1 cents per mile.

In other markets, many EV owners use smart electricity meters which offer a lower cost to charge at night. I phoned NSTAR this week and asked about getting a smart meter. Despite my EV reporting, which some see as EV bashing, my home is a model of energy efficiency, and I can heat it with oil or a super-efficient electric heat pump. NSTAR’s website has no information on smart meters. I was told by the NSTAR rep that no more smart meters are being installed, and that “We (NSTAR) are doing away with them.” I asked the representative if there were any special rates or rebates for EV drivers and she offered a phone number for me to call. There was nobody available at the number to help.

The reason that electricity costs in this area are rising is a lack of available natural gas pipeline capacity. NSTAR offers clean energy from wind and other sources for an additional 5.3 cents per kWh, making that green electricity cost almost 30 cents per kWh.

In markets where government subsidies make EV cheaper, or where electricity costs are low due to large hydro, EVs are easily the most economical vehicles to operate per mile. However, in Mass., they are economically impractical now and becoming more so as time passes.

Related Stories:
2015 Prius hybrid now matches the cost per mile of Leaf EV in some markets
Why does the 2104 Toyota Prius have a 42% better resale value than the Nissan Leaf?
Myth busted - Electric vehicles cost more to maintain than gas cars do
Massachusetts EV rebate program is now online, looks to boost short-term sales


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Comments

Nstar could use some investigative reporting. Even with the overpriced electricity, an EV still beats out even a Prius in my mind because of oil changes, smog checks, belts, etc.
Here in Mass. EVs are still required to pass the same state "Safety Inspection", we don't call them smog tests here because we don't have smog in the manner that places like Southern Cal. do. . There is a comparison of EVs' maintenance costs to gas powered cars at the bottom of the story. You might be surprised by the costs to maintain an EV. Thanks for the comment. I agree with you though, and still think that some EV lease deals are just too good to pass up.
Nice story, well told, solid conclusions, but one thing is missing: residential solar panels. I live in CT, I drive a Prius, and my next car purchase will be a plugin electric. And I will save money. So could anyone. Admittedly,CT is not MA... but it's close, both in geography and electric rates. CT rates are going up too, so last year my family bit the bullet and saved and spent money for solar panels on our roof. For about $9,000 we purchased about 137 percent of our electrical needs. The solar has been more than powering our house for eight months, and I expect in about two or three years, when we purchase that electric car, it will power that... essentially for free. I don't care how low gas prices fall.
Excellent point. For those that own their own home that is an option if the house can accommodate panels. However, those residents that generate solar can also sell that solar back to the utility at the market rate, right? So that power you and your neighbors paid for (solar is heavily subsidized by taxpayers), has a value. Whether you use it to charge a car, or to put the revenue in your pocket, or to run a heat pump to warm your home, that solar you generate may be more valuable as car power, or it may not. Again, if you are one of the few that owns a home, and has a home that can be set up with subsidized solar.
"Selling back to the utility" depends on location. And it's complicated. In my case, each month, CL&P simply balances KWH produced vs. KWH consumed, and keeps a running total. So that is full value "net metering". However, I believe that CL&P, will only pay "avoided wholesale cost" if I generate a surplus after each year. One can argue about subsidy and value and cost, that's not why I did this. I believe cleaner power and cleaner cars are essential to the well being of the planet. I will do what I can afford. If I get a subsidy, I can do more, and the planet is better off. I'm saving now for that electric car (maybe in another year or two). Because, I expect to generate a surplus at the end of the first year, and if that surplus is valued at wholesale cost, it's better for me to use it instead of selling it.
The economics nor the environmental impact support the thesis that EV vehicles cost less to operate and have less of an impact to the environment. EV ownership should be classified as an emotional purchase that appeals to both internal and external motives just as purchasing a Ferrari, large pickup/suv, motorcycle appeal to their owners in different ways. The AVERAGE life of a vehicle on the road in 2014 is 11.4 years and increasing, so all cars should be measured on lifespan operational costs which could run 10-15 years or more as you discard a new car, there are new buyers in the used-car market. For EVs, operational costs include replacing expensive battery packs, chargers and other associated electronics which are prone to wear out over this period. The energy it takes to create a new EV vehicle more than offsets the pollution generated from say an F-150 pickup that may be on the road for 25-30 years or more. Power generation and delivery for EV's is just displace pollution, which benefits citys where displacing pollution help their local environmental conditions, but there is no net benefit compared to a fuel sipping car like a Nissan Versa. Artificially reducing the cost through subsidies only wastes resources and props up specific corporate and political interests. If you are truly off-the-grid with solar and have reached a low point of consumption so that you are fully independent of the power grid, then I suspect your energy costs over the 20 year life expectancy of the panels would not be near to offsetting the capital you had to invest (and reinvest) for the panel system. There are some emotional benefits and possibly real benefits during the brief times that power delivery from the grid is interrupted, but overall an EV is more polluting and costs more to operate than a small ICE equivalent.
Doctor - I appreciate your theories on why people purchase ev's. I have driven one for three years, I have over 70,000 miles on it. I have paid about $55 for each 1,000 miles driven. In that time I have changed the tires and added windshield washer fluid. Those have been my cost. I drive a Nissan, so if I ever need to purchase a battery, it will cost me $5,000. I'm sure that the price will continue to drop. I appreciate your theory that the charger and 'other associated electronics' will need replacement, I have not heard of anyone needing those replaced yet and there are a few ev's with more than 100k miles on them now. I would like to see your research that the energy need to manufacture an ev is more polluting than an F-150 driven for 30 years. Power generation is the ONLY polluting that an EV has associated to it aside from tires as opposed to the continuous and infinite and mobile polluting that a Nissan Vera does. That Nissan Versa uses the same power plant to pump the fuel it uses, plus the electricity it took to refine (huge consumption), store and transport it. It feels good to pay $.03 per mile, fueling at home, have a quiet and smooth ride, no fluid changes and a car that has 12 moving parts. Owning an EV is emotionally and mathematically satisfying. I look forward to seeing the research that supports your theories.