Senate Energy Bill Contains $3.8B for Natural Gas Vehicle Conversion and Purchasing, $400M for Plug-in Vehicle Deployment

On Tuesday, US Senate Majority leader Harry Reid released the “Clean Energy Jobs 5 and Oil Company Accountability Act of 2010”—the latest version of the energy bill to emerge from the Senate. Division B of the bill outlines two major transportation-related initiatives to reduce oil consumption and enhance energy security, including up to $3.8 billion in rebates to buyers of natural gas-powered vehicles, from light- to heavy-duty; and $400 million to support the deployment of plug-in vehicles in targeted communities.

The addition of the electric vehicle provisions was a last-minute achievement, noted Ron Minsk from the Electrification Coalition during his talk at Plug-in 2010. Heading into the weekend, the bill only dealt with oil spills, natural gas vehicles, Home Star and land and water.

Natural Gas Vehicles (Division B, Title XX). The bill establishes within the Department of Energy a Natural Gas Vehicle and Infrastructure Development Program for the purpose of facilitating the use of natural gas in the United States as an alternative transportation fuel, in order to achieve the maximum feasible reduction in domestic oil use.

The program will establish a $3.8-billion rebate program for qualified owners who convert or repower a conventionally fueled vehicle to operate on compressed natural gas or liquefied natural gas, or to a mixed-fuel vehicle or a bi-fuel vehicle.

The rebates are primarily targeted at medium- and heavy-duty vehicles; of the funding allocated for rebates, not more than 25% is to be used to provide rebates to qualified owners for the purchase of qualified alternative fuel vehicles that have a gross vehicle rating of not more than 8,500 pounds.

In general, rebates will offset 90% of the incremental cost of a qualified alternative fuel vehicle to a qualified owner for the purchase of a 15 qualified alternative fuel vehicles. Maximum values are determined by vehicle weight:

  • ≤ 8,500 lbs, $8,000
  • 8,501 - 14,000 lbs, $16,000
  • 14,001 - 26,000 lbs, $40,000
  • > 26,000 lbs, $64,000

Mixed-fuel vehicles receive a rebate of up to 75% of the amount provided for vehicles that operate only under natural gas; bi-fuel vehicles receive 50% of the amount for pure NGVs.

The bill also provides funding to establish fueling infrastructure, and a loan program for domestic manufacturing.

Plug-in vehicles. (Division B, Title XXI) The bill establishes with the Department of Energy a national plug-in electric drive vehicle deployment program to assist in the deployment of plug-in electric drive vehicles. Specified goals of the national program include:

  1. the reduction and displacement of petroleum use by accelerating the deployment of plug-in electric drive vehicles in the United States;
  2. the reduction of greenhouse gas emissions by accelerating the deployment of plug-in electric drive vehicles in the United States;
  3. the facilitation of the rapid deployment of plug-in electric drive vehicles;
  4. the achievement of significant market penetrations by plug-in electric drive vehicles nationally;
  5. the establishment of models for the rapid deployment of plug-in electric drive vehicles nationally, including models for the deployment of residential, private, and publicly available charging infrastructure;
  6. the increase of consumer knowledge and acceptance of plug-in electric drive vehicles;
  7. the encouragement of the innovation and investment necessary to achieve mass market deployment of plug-in electric drive vehicles;
  8. the facilitation of the integration of plug-in electric drive vehicles into electricity distribution systems and the larger electric grid while maintaining grid system performance and reliability;
  9. the provision of technical assistance to communities across the United States to prepare for plug-in electric drive vehicles; and
  10. the support of workforce training across the United States relating to plug-in electric drive vehicles.

Eighteen months after the enactment of the Act, and biennially thereafter, DOE is to submit to Congress a report on the progress made on implementing the program. DOE is also to make information regarding cost, performance, usage data, and technical data regarding plug-in electric drive vehicles and associated infrastructure available to the public.

Two years after the enactment of the Act, DOE is to carry out a national assessment and develop a national plan for plug-in electric drive deployment that includes:

  1. An assessment of the maximum feasible deployment of plug-in electric drive vehicles by 2020 and 2030;
  2. The establishment of national goals for market penetration of plug-in electric drive vehicles by 2020 and 2030;
  3. A plan for integrating the successes and barriers to deployment identified by deployment communities;
  4. A plan for providing technical assistance to communities across the US to prepare for plug-in electric drive vehicle deployment;
  5. A plan for quantifying the reduction in petroleum consumption and the net impact on greenhouse gas emissions due to the deployment of the plug-ins; and
  6. Recommendations to the President and Congress for changes in federal programs to better promote the deployment of and reduce the barriers to plug-ins.

The bill requires DOE to provide technical assistance to State, local and tribal governments to assist with the national deployment of plug-in electric drive vehicles. The technical assistance to be provided will include: training codes and standards for building and safety inspectors; ideas on how to expedite permits and inspections; and education and outreach on the various types of plug-in electric drive vehicles and the associated technology. It also provides grants for training first responders, electricians, contractors, and engineers who will be installing infrastructure, code inspection officials, dealers, mechanics, and others. Provides grants for programs in designing plug-in electric drive motor vehicles and associated components and infrastructure.

The bill directs the federal government to count electricity used to refuel a plug-in electric drive motor vehicle as an alternative fuel. Also, it directs the Federal Energy Management Program and the General Services Administration to compile a report on how many plug-in electric drive vehicles could be deployed in federal fleets based on needed functionality and costs.

Federal agencies are to request funding for these vehicles in their annual budget requests. Finally, it directs the Administrator of the General Services Administration to acquire and deploy plug-in electric drive vehicles to be used in a pilot program in federal fleets and authorizes funds to cover incremental costs.

The bill also creates a target Electric Drive Vehicle Deployment Communities Program—at least 5 and not more than 15 deployment communities that reflect diverse populations, geography, and a model for deploying electric drive motor vehicles. At least one deployment community will have population of less than 125,000. This is funded with the $400 million.

Other provisions include:

  • Establishing an R&D program in DOE to work on all aspects of the development, production, and deployment of electric vehicles. This section also establishes a research, development, and demonstration program in the Department of Energy to identify and assess possible uses for vehicle batteries at the end of their useful life in a vehicle. It provides grants for selected demonstration projects and directs the Secretary of Energy to carry out a study on recycling materials from electric vehicles and batteries.

  • Establishing a competition for the development of a 500-mile vehicle battery.

  • Conduct a study identifying the raw materials needed to manufacture plug-in electric vehicles, batteries, and other components, to describe the known sources of these materials and the risk associated with their supply, and to identify ways to secure the supply chain of critical raw materials.

  • Entering into an agreement with the National Academy of Sciences to conduct a study to identify what data that may be collected from electric vehicles, such as location, charging patterns and usage of electric vehicles. This study will be used to provide recommendations on procedures, technologies, and rules relating to the collection, storage and use of this data.

  • Requiring electric utilities to consider the potential levels of plug-in penetration that they might expect to see on their systems in the near term, investigate the potential impacts on their transmission and distribution infrastructure, and plan for the deployment of electric vehicles in their service area.

  • Providing loan guarantees for eligible entities that purchase more than 200 qualified automotive batteries in a calendar year for use in nonautomotive applications. This program will help attract battery manufacturing facilities to the US while plug-in electric drive vehicle production is still ramping up.

  • Establishing a technical advisory committee to advise the Secretary of Energy on matters relating to plug-in electric drive vehicles. The committee is to coordinate with the Hydrogen and Fuel Cells Technical Advisory Committee and the Biomass Research and Development Technical Advisory Committee. The bill also establishes an Interagency Task Force, chaired by the Secretary of Energy, to coordinate federal actions related to plug-in electric drive vehicles and infrastructure.

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