Rate Impact of Future Vehicle and Building Electrification
The rapid growth in electric vehicle (EV) adoption and building electrification, driven by municipal, state, and federal policies as well as changing consumer preferences, is raising important questions about their impact on electricity rates. EVs and heat pumps, which are significantly more efficient and emit less carbon than their fossil fuel alternatives, have the potential to reduce overall energy costs for households and businesses. To assess this, Synapse conducted detailed analyses on behalf of the Natural Resources Defense Council, examining the effects of EVs and building electrification on residential and commercial electric rates, with a focus on the period from 2025 to 2035 in both New Jersey and New Mexico.
Since 2011, EV adoption in both states has generated significantly more utility revenue than associated costs, helping to reduce rates for all households, even those without EVs. In New Jersey, transportation and building electrification are projected to generate $1.55 billion in net utility revenue from 2025 to 2035. Similarly, New Mexico is expected to see a $1.9 billion net revenue increase over the same period. These benefits will support both electric utilities and their customers while offsetting the costs of electrification.
Similar Synapse work on the historical impact of EV adoption on electric rates, completed on behalf of NRDC, can be found here.