First off, the Oregonian announced today that a special committee advising Oregon Gov. Ted Kulongoski on transportation issues will suggest that state tax credits for hybrids such as the Toyota Prius be phased out. The credits were meant to help establish the market for the new technology, and so it makes sense that as the market becomes secure (with almost 1% of Oregon cars now being hybrids), that the tax credit go the way of all good things. That leaves room for a tax credit on the next generation of fuel-efficient vehicles, which are the plug-ins. These hybrid vehicles can be plugged into a regular electrical outlet and charged up, going as far as 10 miles without any gasoline usage and getting up to 100 mpg.

These plug-in vehicles were featured in another article in this week's Oregonian, describing a newly installed charging station for plug-in vehicles at the PGE headquarters in downtown Portland (other stations in the metro area are planned). Currently, only a few cars in the entire nation have plug-in capability, but the next few years should see more of them come onto the streets as manufacturers such as Toyota refine the prototype, and customers have access to these extremely fuel-efficient vehicles. Once these vehicles are available for purchase, owners will be able to simply plug them into a regular power outlet at their home for a few hours, and GO (at a vastly reduced cost).

CUB thinks this is great, and certainly a necessary shift for a nation that is becoming increasingly serious about reducing its global warming pollution, as well as its gasoline expense. We have just one cautionary principle to offer about plug-in hybrid vehicles: In order to really be cost-effective and environmentally beneficial, these vehicles need to be charged overnight. Each one should come with a so-called smart chip which enables the cars, when plugged in at the owner's house, to start the charging process when electric demand is down, and surplus electricity is available (usually at night).

Why is this so important? Well, if we charge our plug-in vehicles when usage is high, at "peak" times such as the daytime and early evening, then it adds to the peak electricity usage, requires the production of electricity from coal or natural gas plants to meet the increase in demand, and drives up the cost of electricity for everyone. In this scenario, you have shifted the carbon emissions burden from the transportation sector to the utility sector and while you are reducing it, you are still relying on fossil fuel for your power (with attendant carbon dioxide pollution and volatility of markets), and you have lowered your gasoline bill but raised your electric bill. However, if we can arrange for the charge time to be at night when usage is many times lower, and when excess wind and hydropower energy is available, you have a truly beneficial situation: lower emissions, lower costs, fully charged car by the time you need to leave in the morning.

If these smart chips are installed in the vehicle (or the dishwasher or the clothes dryer) at the time of manufacture, the cost is minimal, adding merely a few dollars perhaps to the cost of production. If added by the retailer, the cost of adding the chip is magnified by about 10. Waiting to add the smart chip after the customer has purchased the product magnifies the cost yet again, so that it becomes an expense of perhaps well over $100. This is one area where planning really reaps big rewards.

So we acknowledge PGE's action in taking this first step to bring plug-in hybrid technology to Oregon. However, we would like to make clear that from our perspective, this daytime, workplace charging model (like the soon-to-be-expired hybrid tax credit) is for transition purposes only. Daytime charging of thousands of plug-in vehicles would overload our electricity system and raise our rates. We can afford to charge up a small number of hybrid electric vehicles during peak electricity hours as the market emerges, and numbers of these plug-ins are still relatively small. But even before we reach a tipping point, where the market for plug-ins really takes off, we need to be aware that the model of daytime charging is a faulty one. Smart chips and night charges will bring the plug-ins into their own.