If you drive an electric vehicle, your electrical plan matters

Americans bought 1.4 million electric vehicles last year, trading in their regular visits to the gas station for a Level 2 charger at home. After the first month of charging their EV, many people probably experienced sticker shock when looking at their electric bill.

Adding an electric car to your electricity bill and driving an average of 40 miles per day could increase California energy bills by 30% to 65%, depending on whether you charge your vehicles during off-peak or peak hours, according to Mark Rawson, senior vice president -president of strategy and partnerships at Rhythmos.io (an EV charging optimization platform for utilities and fleets).

These extra charges on your electric bill will replace your weekly trips to the gas station, but you could be missing out on savings if you don’t look into energy plans. Here’s what EV owners and people interested in EVs need to know about buying an electric plan that suits them best.

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How owning an electric car changes your energy consumption

Charging your car at home can significantly increase your electric bill: Charging your car at home during peak hours with a typical Level 2 EV charger is “the equivalent of adding a whole new house” to your energy bill, Rawson said.

To reduce these costs, it is essential to figure out how much you need to charge your vehicle, how often you plug it in and when you will charge. Shifting your charging schedule to off-peak times, ideally at night when electricity demand drops, will reduce the impact of adding an EV to your power load. There’s also the matter of choosing an energy plan that works in your favor.

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We help you find the best electricity rates in your area

How do you know if you have a choice in energy plans?

Depending on where you live, you may be able to choose who provides the electricity that powers your home (including renewable options), although your utility service will still be tied in most states. This is called energy deregulation, and these options are only available in some form in 18 states and the District of Columbia. For a complete list of which states currently offer energy choices to consumers, check out this CNET guide.

Even if you don’t live in a deregulated state, Rawson says it’s still a good idea to visit your utility’s website and see if it offers options or plans for EV owners. Because electric vehicles place a heavy burden on the electric grid, state governments and electric utilities may offer incentives to encourage you to charge your electric car during off-peak hours.

What type of electricity plan should you take into account if you have an electric car?

For those living in a deregulated state, it may be time to go shopping. Depending on your state, comparing plans from different energy providers can be as easy as opening a website. In other places, you may have to gather quotes or rely on third-party aggregators to compare.

In both cases, electric subscriptions usually come in two flavors: fixed or variable. With the first, you are stuck with one price per kilowatt hour up to a certain number of kilowatt hours. If you need to charge your EV regularly, at all hours of the day, you may be better served with a fixed-rate plan that doesn’t offer you much in terms of potential savings, but is predictable.

Most EV owners will likely want to consider a variable rate plan, which charges different rates for electricity based on the time of day, which affects the amount of demand placed on the grid. For example, prices tend to be highest during the after-work rush (e.g. between 3:00 PM and 8:00 PM) and cheapest during the night, when most people are sleeping. If you could shift charging to that time, you could save money on your energy bill.

Dynamic rate plans turn energy shopping into a kind of living market, but these plans are typically reserved for commercial consumers such as factories.

What you need to know before choosing an energy plan

Consumers should be careful when purchasing an energy plan. Some bad actors offer great rates at first glance, but then jack up prices after a promotional period ends. This should all be spelled out in the fine print of the plan, so review each contract carefully before signing it. You will also want to avoid plans that charge excessive fees on top of the kilowatt-hour price. As a general rule, if it seems too good to be true, it probably is.

For EV owners, Rawson asks some questions to consider to get the best deal: How much will you drive each day? Do you have to charge daily? How much should you charge? What does that mean in terms of kilowatt hours? These things can be hard to figure out at first, but you can make estimates based on your current driving habits and the average energy needs of the EV you’re considering.

“Once they know what their energy needs are,” Rawson said, “they can start looking at what the utility is offering to know what the implications are, when to charge and what the cost impact will be to charge during those periods. “

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