FERC: Electric Vehicles Must Be
Integrated Into Grid
Jan 26, 2009 - Dow Jones &
Federal Energy Regulatory Commission Chairman Jon
Wellinghoff said Monday regulators and the automobile
industry must integrate electric vehicles into the
national power grid.
The call by the newly appointed FERC chairman is
in line with President Barack Obama's plan to reduce
greenhouse gas emissions and wean the country off
of crude imports, and comes as the President announced
two major initiatives that would increase vehicle
fuel efficiency standards.
FERC has the power to implement rate structures that
could encourage the growth of the hybrid industry.
"Consumers are going to understand from an economic
standpoint that these automobiles make a lot of sense,
so we have to integrate them into the grid," Wellinghoff
said at a PJM Interconnection conference in Pennsylvania.
PJM is a regional transmission company that coordinates
wholesale electricity flows across more than a dozen
"You can see that if you're an automobile company,
you'd better get on the bandwagon, because if you
don't, you're going to be left out of the band because
there is definitely going to be a move toward electrification
worldwide," Wellinghoff said.
By using electric generation from coal, nuclear,
renewable and natural gas sources, battery-power cars
could dramatically cut demand for crude products.
Obama said Monday his administration would review
a request by California to set its own emission standards
that would force higher fuel efficiency standards,
a decision being watched by more than a dozen other
states that want to implement similar new standards.
The President also said he was considering increasing
national fuel standards beyond what the previous administration
had recently ruled.
"Any emission-related focus will encourage the market
for plug-in vehicles, hybrids, and fuel efficient
cars," said Arshad Mansoor, vice president of power
delivery and utilization at the Electric Power Research
With cars often used only a small fraction of a 24-hour
day, battery-operated vehicles could be paid for services
to make the national grid more efficient, as part
of an artificially intelligent transmission system,
Batteries in plug-in vehicles could help in an essential
part of managing a grid called balancing, the second-by-second
matching of power supply with demand.
"You are using the battery as a shock absorber,
two-way energy flows that are either dumping energy
into or out of the system," Mansoor said by telephone
from the conference.
"It is creating a market where there's a value to
the electric utility industry and to the consumer,"
Wellinghoff said the FERC could create rate structures
that could help to encourage the plug-in market, paying
car owners for services such as balancing and helping
to solve intermittancy challenges that arise with
some renewable energies such as wind and solar. When
the sun isn't shining and the wind blowing, a vast
multitude of batteries in cars stored in sleeping
owners' garages could help provide supply. Besides
the long-term effects of reducing greenhouse gases
and oil imports, the advantages of a cash-back hybrid
include "saving owners money on the total energy bills,
and it will cost less than a conventional car in three
years or less of ownership," Wellinghoff said.
If gasoline prices return to $4 gallon, which many
energy industry analysts predict will happen especially
if the government fulfills its vow to put a premium
on emitting greenhouse gases, then consumers who want
to buy electric vehicles could help to finance their
costs through a FERC cash-back policy.
"Incorporating that savings into financing could
lower first costs for the car," the FERC chairman
New electric cars can cost double conventional combustion-driven
vehicles, creating a barrier to demand and keeping
production costs higher than if manufacturers were
able to mass produce the new technology.
In an effort to jump-start the industry, federal
lawmakers are considering $2,500 to $7,500 tax credits
for consumers who want to buy an electric vehicle.
Mansoor said one of the first tests for the industry
will be how well Chevrolet's electric Volt model sells.
Chevrolet is a unit of General Motors Corp. (GM).
Although the Volt won't have the two-way-electricity
flow technology that's necessary, Mansoor said, "If
that (model) is successful, then the market evolving
for balancing resources and a smart grid evolving
to accommodate that communication... you're looking
at a five- to 10-year time frame."
-By Ian Talley, Dow Jones Newswires; 202-862-9285;