Designing Distribution Network Tariffs in the US with an Application to Increased Electric Vehicle Adoption
Name
turk-et-al-2025-designing-distribution-network-tariffs-in-the-us-with-an-application-to-increased-electric-vehicle.pdf
Description
Published version
Size
1.15 MB
Format
Adobe PDF
Checksum (MD5)
49162a2b77e9df0b929175248654a786
Author(s)
Turk, Graham
Schittekatte, Tim
Duenas-Martinez, Pablo
Joskow, Paul L
Schmalensee, Richard
Date Issued
November 2025
Journal
The Energy Journal
Publisher
SAGE Publications
Citation
Turk, G., Schittekatte, T., Duenas-Martinez, P., Joskow, P. L., & Schmalensee, R. (2025). Designing Distribution Network Tariffs in the US with an Application to Increased Electric Vehicle Adoption. The Energy Journal, 46(6), 143-165.
Version
Final published version
Abstract
Time-of-use (TOU) tariffs that vary the cost per kWh to reflect wide variations in generation and wholesale market costs give incentives to shift all electric vehicle (EV) charging to low-price periods. As EV penetration increases, such tariffs would substantially raise the local kW demand in those low-priced periods, which eventually would lead to increasing network expansion costs. A straightforward way to mitigate this problem is to separate energy charges from network charges, with appropriate rate designs for each. This paper uses a realistic case study to investigate the implications of combining TOU energy charges with various network tariff designs in the face of increased EV penetration. Our results provide support for the adoption in the US of ex-ante subscribed capacity tariffs (subscription charges), which give consumers incentives to reduce their peak kW demands. Reducing costs of EV ownership (a priority for many US states) need not be pursued at the expense of broader affordability goals.
JEL classification: L51, L94, L97, Q41, D40
MIT Department
MIT Energy Initiative
Massachusetts Institute of Technology. Department of Economics
Sloan School of Management
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivatives
Persistent DSpace Link
DOI of Published Version
https://doi.org/10.1177/01956574251365616
