Pain Point #1: Find Dad Best EV Rate

I’ve developed electric vehicle retail rates in Hawaii, designed EV incentive programs in Minnesota, and pitched EV management software in New Mexico – but for some reason, I’ve been pushing off the task to “Find dad best EV rate” on my to-do list for months. Clearly this has been on my mind, but this seemingly simple task was not as easy as I thought.

My goal is to understand the customer journey of switching to an EV tariff in Texas – the state with the highest level of retail choice in the US. Five years ago, I was reading about electricity rates in a coffee shop when a saleswoman from a local electricity provider approached me. I pictured that they went door-to-door explaining different options, trying to sell the most appropriate plan to each individual customer. I thought the experience would resemble shopping for a cell phone plan – you go into the Verizon store and the salesman knows all of the plans in detail, you have an engaging conversation, and it feels like you are working together to find the best plan for you. Helping my dad find the appropriate energy plan over the past few days, this was not even close to the experience we had.

I have very strong feelings about economically efficient retail rates. Rather than a flat fee, a time-of-use rate incentivizes customers to shift their consumption to off-peak periods and hours with more renewables, which can help save money for both the customer’s bill and the utility’s investments, while reducing emissions. Efficient retail rates are significantly more important with the adoption of large energy devices – like electric vehicles.

The task at hand: My dad has been a Reliant customer for a few years, and the goal was to find a time-of-use rate that could help him save money when he charges his EV in the evening. Taking off my economist hat and putting on my customer hat, I had to remind myself that the goal here is to help my dad save money, not to find a different retail rate to benefit the grid/planet.

I first explored options to stay with Reliant to avoid switching costs – both the actual switching costs of switching providers, and the time/effort required to find a different vendor. I’ll spare the details, but the user experience on the Reliant website was very frustrating – I couldn’t see an exhaustive list of the plans in one place, an EV tariff was mentioned on one page but did not include the actual cents/kWh rate and was not included on the main plan comparison page.

Since the website was not clearly listing all of the options, I was hoping to get some advice from the representative on the phone. Unfortunately, I wasn’t catered to in the same way I’ve been helped at the Verizon store in the past. She was listing out options that were significantly more expensive than the existing plan we are locked into, couldn’t send a clear comparison table, wasn’t aware of the EV plans I found online, and didn’t sell me on the pros and cons of each one. They are mostly tasked with locking customers into the longest-term plan possible, which makes sense to promote their retention.

If we were to switch retail providers at the end of our contract, I explored “Best EV tariffs” in Texas as well – coming up with options from OhmConnect Energy and Shell Energy. As competitors for my company and my dad’s company, respectively, I wasn’t thrilled with these being the main two options. I expected a much better customer journey with OhmConnect, given their experience in the demand response space. But when I asked them for advice given my consumption habits, he responded that “it doesn’t really matter,” and was trying to sell me for the 36-month plan with cheaper rates. I nudged him in the direction towards the plans with discounted nights, but he was unable to provide any detail beyond what I found online, or answer my specific questions on demand response.

Overall, we saw high switching costs when exploring alternative rates – including both the time and energy invested, along with the contractual switching costs. Most Texans I spoke with prefer the “set it and forget it” approach. Nobody wants to do the research to find a different rate. In all honesty – why would they? If they are locked into an average rate of 12 cents/kWh and their bills are not too expensive, there is no clear incentive or motivation to find a different rate.

Lessons learned: competition across energy providers choice in Texas does not lead to more innovative rate structures. Sure, they may have rates to attract sports fans with a signed baseball hat or a rate that includes an invitation to a Rockets autograph session, but that wasn’t the type of innovation I was hoping to see.  Almost all of the neighbors and friends I spoke with have Reliant and have flat rate – so maybe the benefits of retail choice I learned in the classroom haven’t come to fruition.

If the current status quo requires EV owners to have a basic understanding of a specific rate beforehand, to take the time to call multiple times to actually make the switch, and then manually sync their EV charging app with the new plan, then I can’t expect even the early EV adopters to put in this level of effort.

So what?

My family said I was being harsh on the customer service representatives and it’s not fair for me to stump them with challenging questions. I agree with them that it’s not their fault. My main motivation for understanding this customer journey is because we need managed EV charging. Utilities across the US (and globally) are asking for managed EV charging, and it’s important to include the customers in earlier discussions. Why does this issue matter? EV charging could contribute to congestion during peak load periods, or it could create issues for the distribution system if the EVs are all set to start charging at midnight, known as a “timer peak.”

Not many people are aware of how Managed EV charging programs or tariffs could help them save money in the short-term, and help prevent issues for their local grid in the long-term. I want to make this process as seamless as possible for the end customer and it is unclear on whether this falls on the responsibility of the energy provider or auto industry.

Many utilities across the US are investing in Managed EV charging pilot programs, which is encouraging. We are seeing varying levels of engagement with auto manufacturers during this transition, with Tesla clearly at the forefront. Tesla recently announced that they are entering the retail space in Texas, they are leading a regulatory taskforce to launch a Virtual Power Plant pilot program (and getting most of the press because of their role), and have the largest market share of EVs in Texas, along with the rest of the US. Texas is an important market to watch out for, and I am concerned that Tesla will corner this space as they start to cover every lateral in the market.

Walking through the customer experience of switching to an EV tariff in Texas, I learned that there is much to be desired. We need to double down on the education to end customers on why these programs are important: Not only can you help prevent blackouts, but you can save money on your bill.

The homeowners in my family continuously ask me how they can save money on their energy bill, what type of retail rate they should use for Airbnb homes, and whether they should adopt rooftop solar. Next time, we will focus on solar export rates across the country; and whether it even make sense to adopt rooftop solar. Thank you, dad, for letting me use your house as the first test case – next time I return home, we can look at quotes for heat pumps together!