California policies aimed at reducing electricity use and curbing greenhouse gas emissions have the unintended consequence of making new plug-in hybrid vehicles uneconomical, according to a Purdue University economist.

Wally Tyner, the James and Lois Ackerman Professor of Agricultural Economics, said California's tiered electricity pricing system means Californians will pay some of the highest electricity rates in the country to recharge plug-in hybrid vehicles. States with flat electricity rates or those that vary price based on the time of use are more economical, according to Tyner's study.

In tiered systems, consumers pay a higher rate for electricity they use beyond a certain amount. California has three rate tiers. It also has a time-of-use system, which reduces the rate during periods of low demand. In addition, Californians pay some of the highest electricity rates - an average of 14.42 cents per kilowatt hour, which is about 35 percent higher than the national average.

"The objective of a tiered pricing system is to discourage consumption. It's meant to get you to think about turning off your lights and conserving electricity. In California, the unintended consequence is that plug-in hybrid cars won't be economical under this system," said Tyner, whose findings were published in the early online version of the journal Energy Policy. "Almost everyone in California reaches the third pricing tier each month. If they add a plug-in hybrid, they are charged the highest rate."

Tyner worked with Purdue researchers Farzad Taheripour, an energy economist in Purdue's Department of Agricultural Economics; Joseph F. Pekny, a professor of chemical engineering; Gintaras V. Reklaitis, the Burton and Kathryn Gedge Distinguished Professor of Chemical Engineering; and Shisheng Huang and Bri-Mathias S. Hodge, graduate research assistants in chemical engineering, to develop a model that would simulate energy use by Californians. They analyzed U.S. Census data to determine types of appliances each household would use. The model closely aligned with actual energy use in California.

Adding a plug-in hybrid would increase the average use of electricity nearly 60 percent per household, according to the findings. In California, most of that increase would be charged at the highest rate.

Tyner said states such as Indiana, which charges a flat rate of about 8 cents per kilowatt hour, would be more economical. Those that employ time-of-use rates would be the most economical because the lower nightly rates would coincide with when people are most likely to charge their cars.

"If you have time-of-use pricing, you have the opportunity to charge the car at the lowest available price," Tyner said.

Tyner said California could change its rate system or issue extra electricity meters for charging cars on flat rates.