Solvable Problems--Plug-in Cars and Electricity Demands

The Wall Street Journal has an article about the effect of plug-in cars on electric utilities. As the use of plug-in electric cars grows, it could cause excess demand during already high usage times if people plug the cars in during the day. This could cause utilities to have to buy more power at high peak-time pricing, or even build more power plants--an expensive proposition fraught with political problems. If they plug them in at night, when demand is low, they'll simply sell more power and make more money.

The solution is economically simple, although politically difficult; just allow the utilities to use congestion pricing. Just as they have to pay more for energy they buy during peak times, they should be allowed to charge more during peak times. If electric use cost more during the day than at night, people would be more likely to plug their cars in at night. For those who want to keep utilities regulated, rather than allowing a full free-market, those different prices could still be regulated, so utilities don't "rip off" people during the day.

One upside on this--most people won't be plugging in their cars during the peak morning demand, as they'll want to have them "re-fueled" in time to drive to work in the morning.

The bigger problem is whether people plug them in as soon as they come home from work, during the next biggest utility demand period. It would be better for people to plug them in just before they go to bed, but then how many are likely to forget and in the morning find their car isn't juiced up? (Blogger raises his hand.) And that detail is why most people will want to plug in as soon as they come home, so a solution oriented toward that specific time period, say 5-8 p.m., is probably what's most needed.