The head of the Federal Energy Regulatory Commission (FERC) predicts that plug-in hybrid vehicles will provide immense benefit to power grid operators — enough for utilities to provide kickbacks to their customers, paying down the extra cost of a plug-in in as little as three years. Jon Wellinghoff, FERC’s acting chairman, made that comment at a Las Vegas trade show last week according to coverage by the Las Vegas Review-Journal (which I picked up on thanks to the keen newswatching eyes of specialty publication EV World).

Wellinghoff’s comments refer to plug-in hybrids equipped with the smarts to communicate with the power grid, which he termed the “Cashback Hybrid” according to the Review-Journal article:

When the Cashback is plugged in, motorists can allow the utility to vary the speed at which the battery recharges so that the utility can more closely match supply and demand for power on the electric grid…In return, the car owner could obtain cash back or a credit from the utility that makes the electricity free, he said.

Carbon-Nation reported last week that these ‘cashback’ plug-ins may also pay dividends for the environment by reducing air pollution from power plants. One reader found my explanation of the research behind that report — a study of the Texas grid from the National Renewable Energy Laboratory — less than fully transparent, so here’s another go:

The idea is that utilities can control when and how quickly a plug-in recharges — the scenario Wellinghoff invokes — and thus use this control to smooth out power demand. They can fill dips in demand by increasing the charging rate of the plug-ins, and clip peaks in demand by pulling back on the charging throttle. This smoother power demand means the utilities have less need to throttle up and down the ‘peaking’ plants normally used to track supply and demand — a process that releases a disproportionate share of smog-forming NOx.

In the main case NREL modeled — the Texas grid supporting plug-in hybrids equal to 15% of the state’s vehicle fleet — net NOx emissions decline despite the added power generation required to charge the vehicles. NREL predicts even greater reductions in NOx, as well as cuts in sulfur dioxide and CO2, if the utility’s have the additional power of drawing charge out of the vehicle batteries (so-called vehicle-to-grid capability).

Again, these results hold true for Texas and remain to be confirmed for other grids.

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This post was created for Energywise, IEEE Spectrum’s blog on green power, cars and climate