AMPLY Power: Top 25 US cities could save avg. 37% on fuel costs by switching to electric vehicles and buses; up to 60% with managed charging
A white paper by AMPLY Power, a company providing fleet charging as a service, finds that 25 of America’s largest metropolitan areas could save an average of 37% on fuel costs by electrifying their bus and light-duty vehicle fleets.
Additionally, well-managed electric fleets that optimize electricity charging for off-peak hours and avoid demand charges can save as much as 60% on fueling versus their internal combustion engine (ICE) or unmanaged EV fleet counterparts.
AMPLY developed an interactive map to compare gas and electric fleet fueling costs.
AMPLY used publicly compiled data to develop a dollar per gallon-equivalent metric (DPGe). The new metric gives fleet owners, operators, municipalities, and policymakers a direct apples-to-apples comparison between gasoline or diesel fuel and electricity pricing.
The cost-savings for commercial electrification are real and tangible. Until now, the entire electrification ecosystem, from utilities and regulators to fleet operators, has lacked a standard metric to showcase this economic value.
Alongside proving the economic benefits found in fleet electrification, the innovation of the dollar per gallon-equivalent metric provides stakeholders the clarity to assess, plan, and budget for electric fleet transition and accelerate the industry beyond the pilot phase to full deployment.—Carla Peterman, former commissioner of the California Public Utilities Commission, and current advisor to AMPLY
Unlike gasoline or diesel fuel prices, electricity prices can vary significantly on a kWh basis. For commercial / industrial users, the three basic components of an electric bill are: energy charges, demand charges, and fixed charges.
In the study, AMPLY suggests that rates structures in the Top 25 Metros are best understood by comparing two cities with drastically different rate design: Atlanta and San Francisco:
For the most part, Atlanta’s pricing structure minimally provides an optimization incentive. At about $0.19/kWh for energy year-round, and with no additional demand charges, vehicle charging is more or less agnostic to exactly when or the rate at which it charges. For both light duty and buses, AMPLY found Atlanta’s DPGe for fleet vehicles to be $1.85.
San Francisco, conversely, has extreme time-variable rates. Under San Francisco’s new proposed commercial EV tariff, charging during peak times costs over $0.30/kWh for energy whereas charging during off-peak times costs under $0.09/kWh, plus monthly demand charges based on instantaneous charging. Given the complex structure and multiple optimization avenues to save on energy and demand, San Francisco’s DPGe ranges between $1.46 and $3.82—i.e., a range that can be twice as expensive or 25% cheaper than Atlanta depending on how charging the fleet is managed.
As another example, in San Diego region, the DPGe for car fleets with unmanaged charging can be up to $11.27; managed charging can bring that down to $4.67. The liquid fuel cost baseline is $3.78/gallon.
In the study, AMPLY Power assessed the DPGe for the top 25 US metropolitan areas and identified significant commercial and regulatory implications of fleet electrification.
For example, electric bus fleets achieve significantly lower fuel costs by switching from ICE to electric, with managed charging, in all 25 of the largest US cities. Portland, Oregon leads these savings with 82% savings by making the switch, followed by Tampa, Florida at 79%, and Seattle, Washington at 78%. Even Detroit, Michigan—with the highest DPGe for city bus fleets—yields 12% fuel savings.
Similarly, light-duty EV fleets can also realize a lower fuel cost transitioning from internal combustion engine (ICE) fleet vehicles to electric in 19 of the top 25 US cities. Portland, Oregon leads this segment again at 69% savings, followed by Seattle, Washington at 63%, and San Francisco/Oakland, California at 62%.
When state-mandated programs serve as the basis for fleet electrification discussions, it’s easy for fleet professionals to start from a focus of sustainability, rather than targeting the repeatedly proven economic and business advantages of electric fleets.
Optimizing fleet electrification programs to maximize fuel savings still requires planning and due diligence based on a fleet’s location and other factors. While this may seem complex, we challenge fleet operators to embrace these intricacies, and realize the real economic value in switching to electric.—Vic Shao, founder and CEO of AMPLY Power
Methodology of the DPGe metric. The DPGe compares the electric dollar per gallon-equivalent of gasoline (or diesel) for specific cities. Used as a forecasting tool for EV charging, the DPGe incorporates regional-specific electricity rate structures, fleet-specific charging strategies, and vehicle class efficiencies into a single, comprehensible metric that can be used to assess, plan, and budget for an EV fleet transition.
The analysis seeks to simplify complex energy rate structures and electric vehicle efficiency metrics into a single figure that Americans know and use daily—the dollar per gallon of gasoline. Due to the complexity of electricity rate structures and vehicle fleet requirements, AMPLY has provided a range for this DPGe figure.
The research details the difference between operating a fleet without managing the EV charging or having a suboptimal charging strategy that doesn’t take advantage of all the options available, and a managed fleet using an optimized charging strategy. A managed strategy takes into account factors such as peak-pricing, utility demand charges, and time-of-use rates to determine the most cost-effective charging schedule. Conversely, an unmanaged strategy does not optimize charging for pricing.
Savings realized from EVs can easily be torpedoed if a fleet is charging at peak rates, or charging activities trigger demand charges. For instance, in New York City, it could be more costly to transition a light-duty fleet without a managed charging strategy. However, with management, a transition could yield almost 20 percent savings. This finding illustrates both the opportunity and the risks associated with fleet electrification, and why managed charging is vital to ensuring the full economic benefits.—Simon Lonsdale, head of sales and strategy at AMPLY Power