Plug-in Electric Vehicle Cost-Benefit Analysis: Arizona

MJB&A has evaluated the costs and benefits of increased penetration of plug-in electric vehicles (PEV) in the state of Arizona. The study estimated the benefits that would accrue to all electric utility customers in Arizona due to greater utilization of the electric grid during off-peak hours, and increased utility revenues from PEV charging. In addition, the study estimated the annual financial benefits to Arizona drivers from owning PEVs–from fuel and maintenance cost savings compared to owning gasoline vehicles, and the annual financial benefits to owners of public EV charging infrastructure. The study also estimated the societal benefits resulting from reduced gasoline consumption and associated greenhouse gas (GHG) emissions, as well as reduced emissions of nitrogen oxides (NOx).

Two different penetration levels between 2030 and 2050 are utilized to estimate costs and benefits. The Moderate PEV scenario is based on Transportation Electrification Goals in Arizona Corporation Commissioner Andy Tobin’s 2018 Draft Energy Modernization Plan, which include a state-wide goal of one million PEVs registered in Arizona by 2050. The “High PEV” scenario includes more aggressive PEV penetration levels - reaching 90 percent by 2050 - that would be required to achieve deep reductions in vehicle air pollution emissions.

If Arizona PEV adoption follows the moderate trajectory envisioned by the Draft Energy Modernization Plan, the net present value of cumulative net benefits from greater PEV use in Arizona will exceed $3.7 billion state-wide by 2050. If PEV adoption were to hit 90 percent by 2050 (High PEV scenario), the net present value of cumulative net benefits from greater PEV use in Arizona could exceed $31 billion state-wide by 2050.

A large portion of the direct financial benefits to Arizona drivers derives from reduced gasoline use - from purchase of lower cost, locally produced electricity instead of gasoline imported to the state. Under the High PEV scenario, PEVs will reduce cumulative gasoline use in the state by more than 15.5 billion gallons through 2050, helping to promote energy security and independence, and keeping more of vehicle owners’ money in the local economy, thus generating even greater economic impact. In addition, this reduction in gasoline use will reduce cumulative net GHG emissions in the state by more than 160 million metric tons through 2050. The replacement of gasoline vehicles with electric vehicles will also reduce annual NOx emissions in Arizona by over 2,900 tons in 2050 under the High PEV scenario.

This study was conducted by M.J. Bradley & Associates for the Southwest Energy Efficiency Project and Western Resource Advocates; it is intended to provide input to state policy decisions about actions required to promote further adoption of electric vehicles.

The Southwest Energy efficiency Project (SWEEP) is a public-interest organization promoting greater energy efficiency and clean transportation in Arizona, Colorado, Nevada, New Mexico, Utah, and Wyoming. SWEEP collaborates with utilities, state and local governments, environmental groups, national laboratories, businesses, and other energy experts.

Founded in 1989, Western Resource Advocates (WRA) is dedicated to protecting the West’s land, air, and water to ensure that vibrant communities exist in balance with nature. WRA uses law, science, and economics to craft innovative solutions to the most pressing conservation issues in the region.