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