Hybrid electric vehicles with the capability of being recharged from the grid may provide a significant decrease in oil consumption. These ''plug-in'' hybrids (PHEVs) will affect utility operations, adding additional electricity demand. Because many individual vehicles may be charged in the extended overnight period, and because the cost of wireless communication has decreased, there is a unique opportunity for utilities to directly control the charging of these vehicles at the precise times when normal electricity demand is at a minimum. This report evaluates the effects of optimal PHEV charging, under the assumption that utilities will indirectly or directly control when charging takes place, providing consumers with the absolute lowest cost of driving energy. By using low-cost off-peak electricity, PHEVs owners could purchase the drive energy equivalent to a gallon of gasoline for under 75 cents, assuming current national average residential electricity prices.