Electrification is the process of converting end-uses — such as HVAC, transportation and industrial machinery — to electricity and away from fossil fuels. Economics, existing technology, climate goals, and continued advancements of electric technologies are key factors in the pace of electrification.
The electrification of end-use technologies in industry, buildings and the transportation sector has the potential to enable customers to be more energy efficient through the use of more — and increasingly cleaner — electricity while replacing direct fossil fuel use. This trend continues to grow as society seeks to replace fossil fuels with clean electricity to heat homes and buildings, power vehicles and operate industrial equipment. The benefits are significant for the environment, society and business. However, the shift to an electrified economy requires planning to ensure infrastructure is in place to meet our customers’ needs and the right policies and regulations are established to support them.
The U.S. transportation system provides mobility for people, goods and services. Because transportation relies heavily on fossil fuels today, electrification of the transportation sector is vital to achieving long-term carbon reductions and ensuring our nation’s energy and economic security.
Thanks to aggressive goal setting and technology advancement, the electric power sector now emits less carbon dioxide than the transportation sector. EVs are cost-effective, saving drivers both fuel and maintenance costs. The Edison Electric Institute (EEI) estimates EV drivers spend the equivalent of about $1.20 per gallon, based on average residential electric rates. Customers save even more money where off-peak charging programs are offered.
Enabling wider usage of electric transportation is essential to building a cleaner energy future. According to the Edison Electric Institute (EEI), an estimated 18.7 million electric vehicles (EVs) are projected to be on U.S. roads by 2030, and we are working to support this transformation while promoting a positive experience and benefits for all of our customers and communities.
As of December 2020, there were more than 18,800 EVs in our 11-state service territory. All-electric EVs surpassed plug-in hybrid EVs for the first time in March 2020 and growth rates suggest this trend will continue. We’re working with our customers and communities to help them realize the benefits of electric transportation through community outreach, assessment tools, guides, customer programs and offers, and low-cost off-peak charging rates.
Customer program offerings span our service territory and include infrastructure deployment rebates, off-peak charging programs, energy efficiency rebates and consultative services. This includes collaboration with vendors and automakers to raise awareness on fleet electrification and charging infrastructure deployment. Our customer program offerings aim to optimize the electric grid, thereby benefiting all customers with applications such as corridor fast charging, fleets and transit agencies, multi-family dwellings, workplaces and residential homes.
- Electric Transportation Customer & Community Programs
- Across our service territory, we offer programs, rebates and customer support to encourage EV adoption. We launched many new programs in 2020, including Indiana Michigan Power’s IM Plugged In program. IM Plugged In covers residential, multi-family dwellings, fleet, workplaces and corridor fast charging. Participating customers get rebates on charging equipment installation as well as off-peak usage rates to keep their EV charging costs low. While giving customers more options, we promote adoption, which creates downward rate pressure – and ultimately benefiting all I&M customers.
- AEP Ohio’s Electric Vehicle Charging Station Rebate program, launched in April 2019, incentivizes installations of network-connected charging infrastructure at public, government, commercial, and multi-family locations. The program will install and activate approximately 75 DCFC and 300 Level 2 Charging Stations by the program completion in April 2022.
- Residential customers of Public Service Company of Oklahoma (PSO) and Southwestern Electric Power Company (SWEPCO) in Louisiana and Texas are eligible for energy efficiency rebates on qualified EV chargers. Efforts to expand electric transportation offerings continue throughout AEP’s service territory, including AEP Ohio, Appalachian Power, Indiana Michigan Power, Public Service Company of Oklahoma and Southwestern Electric Power Company. Active discussions are underway to innovate, improve and evolve our customer offerings as we continue to pursue our electric transportation mission with our customers and communities.
- SWEPCO hosted its first National Drive Electric Week event in 2019 and moved the event online in 2020. The virtual event included presentations by four SWEPCO customers who are EV owners, followed by a series of videos featuring the owners posted on YouTube as part of SWEPCO’s ongoing promotion of EVs.
- AEP’s Fleet Goal
Leading by example, we announced in September 2020 plans to replace 100% of our 2,300 cars and light-duty trucks with EV alternatives by 2030. Our total fleet comprises nearly 8,000 vehicles, including medium- and heavy-duty vehicles. By converting a portion of medium- and heavy-duty vehicles with electric or hybrid models, we will achieve our goal of electrifying 40% of our entire on-road vehicle fleet in less than 10 years.
Transitioning light-duty vehicles to EVs is standard practice across all of our business units. We’ll begin to transition medium- and heavy-duty vehicles, as well as off-road equipment, when electric and hybrid alternatives become available. In addition, we will electrify 50% of forklifts by 2030. The fleet transformation is estimated to avoid 8 million gallons of fuel and to result in savings of $3.8 million over the life of the vehicles.
Fleet electrification is part of our effort to reduce CO2 emissions by 80% by 2030 and achieve net-zero by 2050. We have already made significant progress.
- Electric Transportation Highlights
The Electric Highway Coalition
In March 2021, AEP along with several peer utilities announced a plan to ensure that electric vehicle (EV) drivers have access to a seamless network of charging stations connecting major highway systems from the Atlantic Coast, through the Midwest and the South, and into the Gulf and Central Plains regions. The Electric Highway Coalition will provide drivers with effective, efficient, and convenient charging options that enable long-distance EV travel. Sites along major highway routes with easy highway access and amenities for travelers are being considered as coalition members work to determine final charging station locations. Charging stations will provide DC fast chargers that are capable of getting drivers back on the road in approximately 20 to 30 minutes.
NSR Consent Decree Electric Bus Expansion
In 2020, we worked with EPA and NSR Consent Decree stakeholders to expand eligibility of mitigation funds under the agreement to cover the incremental (above traditional vehicle) cost of electric school and transit bus replacements. The implementation plan was approved at the end of 2020, and we are working with our customers and communities to encourage them to consider this opportunity and apply for these funds to help them achieve their sustainability goals with electric transportation options. Customers in Indiana, Kentucky, Ohio, Virginia and West Virginia can apply for funding at www.aep.com/electricbusfunding.
We were a founding partner with the City of Columbus in being awarded the U.S. Department of Transportation’s (DOT) Smart City Challenge grant in 2016. The Smart Columbus project helps community leaders and organizations understand how electrification can enhance Columbus and positively impact the quality of life. The goals of the program align with our vision to transform the transportation sector and make the grid smarter and more efficient.
Smart Columbus surpassed its grant goals in 2020 with over 3,400 EVs sold and an EV adoption rate reaching as high as 2.34% during the grant term. To support these vehicles, over 900 new EV charging ports were installed in the seven-county region over three years, thanks in great part to the AEP Ohio charging program. We also exceeded our goal to install 10% of charging stations in low-income areas. Although the grant period expired at the end of 2020, Smart Columbus is continuing to promote electrification and renewable energy adoption in partnership with our team.
Indian Nations Council of Governments
In 2018, the Indian Nations Council of Governments (INCOG) took the first steps toward creating an accessible, user-friendly EV charging network in Oklahoma. INCOG allocated federal highway funding through the Congestion Mitigation and Air Quality program (CMAQ) toward a DC Fast Charging network for the Tulsa Transportation Management Area and Public Service Company of Oklahoma (PSO) provided matching funds to support the installation.
PSO and INCOG deployed the first-of-its-kind ultrafast public EV charging stations in Tulsa in collaboration with the Gathering Place Park, the Oklahoma Aquarium, and the Tulsa International Airport. The FreeWire Boost Charger™ can be deployed quickly in dense, high-traffic locations and can use energy stored in batteries to provide the fast charging, while its internal batteries charge at a lower power from the grid. This allows for lower power input to minimize electrical infrastructure upgrades and reduce ongoing energy demand for site hosts. The project demonstrates PSO’s commitment to build partnerships with community organizations to advance electrification while supporting the completion of the EV corridor through America’s Heartland.