In 1906, the editors of Electrical WORLD, the leading electricity journal of the day, proposed that utilities provide a special rate for the charging of electric vehicles in the middle of the night. The idea never took hold, of course. But a century later, this modest proposal has been reborn in the form of plug-in hybrid electrical vehicles (PHEVs). If the current U.S. vehicle fleet were replaced overnight with PHEVs, oil consumption would decrease by 70-90 percent, completely eliminating the need for oil imports and leaving the U.S. self-sufficient in petroleum supply for many years to come. PHEVs are not exotic vehicles of the distant future, but real cars that are in production already. These cars and trucks run fully or partially on batteries charged by plugging into an electrical socket. They also have conventional engines that run on ordinary liquid fuels such as gasoline or ethanol, which removes any limitation on the distance they can be driven, and with it the main consumer objection to purely electric vehicles. And while conventional sedans have a maximum fuel economy of about 30 miles per gallon, and non-plug-in hybrids such as the Toyota Prius average about 50 mpg, PHEVs get an equivalent of 80-160 mpg, and even more as gasoline in the PHEV's tank is replaced by biofuels.

A switch to PHEVs has profound implications for protecting earth's fragile climate, not to mention the elimination of smog. By providing most of the energy for cars from power plants instead of fuel tanks, the environmental impacts of driving are concentrated upstream in a few thousand central station generating plants, instead of a hundred million cars. This focuses the problem of climate protection squarely on the issue of reducing the greenhouse gas emissions from electricity generation. While making electric power greener is itself no small undertaking, the outlines of a solution are at least visible, whether one prefers renewable energy sources such as wind and solar, or nuclear power, or the capture and burial of the carbon dioxide from coal.

PHEVs could also revitalize the two troubled industries that must cooperate to make a PHEV transformation work-automobile manufacturing and electric power. In the past months Detroit has announced major layoffs and been slapped by a Consumer Reports article that lists only Japanese cars among its top 10 best buys. Rather than try to catch up incrementally with Japan in conventional and hybrid vehicle technology, Detroit could leapfrog current technology altogether and retool massively for PHEV production.

The prospect of permanently high gasoline prices and limits on carbon emissions favor the PHEV option. To speed the transition, a set of market support policies -- tax breaks on PHEV purchases and available recharging stations -- would make a huge difference. Lower electricity rates for vehicle charging could encourage rapid consumer adoption and seal the deal.

Why would the electricity industry want to offer such rates? For the same reason they were proposed in 1906 -- the enormous difference between on-peak and off-peak demand. Electricity soars to high levels at certain times of the day and year, such as summer afternoons when air conditioning is in use. Utilities must spend money on generating units to meet peak demand, but lose money on their investment when these units sit unused the rest of the time. In California, the replacement of 20 million conventional cars with PHEVs that were charged overnight would increase electricity demand to nearly the same level as daytime demand. Electric vehicles not in use during the day could be configured to supply electricity to local distribution networks at times when the grid was under strain. These changes could transform the economics of the utility industry.

The climate crisis and the prospects of protracted warfare in the Middle East demand that we drastically reduce the environmental and geopolitical footprint of our energy use. Fortunately, there is already a plausible vehicle - literally -- for this transformation, if our industries have the vision to pursue it. The editors of Electrical World in 1906 were prescient -- it's time to test their modest proposal in the market of the 21st Century.

Daniel M. Kammen is a professor in the Energy and Resources Group (ERG), the Goldman School of Public Policy, and the Department of Nuclear Engineering. He is also the founding director of the Renewable and Appropriate Energy Laboratory (RAEL).

Jim Williams is a senior consultant at Energy and Environmental Economics, Inc. of San Francisco, and a lecturer on quantitative methods in environmental science at Berkeley's Energy and Resources Group.