The comprehensive Energy & Highway Bills, recently passed by the
US Government, include virtually all the provisions for which the
NGV industry had been lobbying.
This is a summary of the provisions of the Energy Bill that directly
affect the NGV industry. While it’s a long list, the most important
are: (1) the vehicle and infrastructure provisions of the CLEAR ACT;
(2) the fuel use incentive (The fuel use incentive is included in the
Highway Bill – not the Energy Bill. and (3) the Clean School Bus
Program (which actually is included in both the Energy Bill and the
Highway Bill). Also listed in the summary are some of the key
provisions that are directed at promoting fuel cell vehicles, hybrid
vehicles and non-NGV alt fuel vehicles.
This just shows that, when it comes to Washington politics, persistence
pays off. For 10 years, the NGVC has been lobbying for a broad package
of incentives, programs and studies in support of the NGV market. In
the last two Congresses, NGVC had many of these provisions included in
comprehensive energy bills. In both Congresses, those bills died at
the end of each Congress Now (at long last), NGVC has been successful.
The new laws contain no less than 28 provisions that will support the
use of NGVs. Some are minor. But several are very significant
including:
- An income tax credit to the buyer for the purchase of new, dedicated
NGVs of 50 percent of the incremental cost of the vehicle, plus an
additional 30 percent if the vehicle meets certain tighter emission
standards. A tax credit is a dollar-for-dollar reduction in federal
income taxes owed. These credits range up to $4,000 for light-duty
vehicles, and up to $32,000 for the largest, heavy-duty vehicles. For
non-tax-paying entities, such as municipalities, the seller of the
vehicle can take the credit and pass the savings on to the buyer.
- An excise tax credit payable to the seller of CNG or LNG (or user in
cases where there is no sale!). The actual mechanism for the
calculation of the tax credit is complex, but the net effect is that
the cost of CNG to the seller will be reduced by about 38 cents per
gasoline-gallon-equivalent, while the cost of an LNG gallon will be
reduced by about 67 cents per diesel-gallon-equivalent. With both
gasoline and diesel fuel selling in the $2.30-$2.50 range in the U.S.,
this will be a significant financial incentive.
- An income tax credit equal to 50 percent of the cost of natural gas
refueling equipment, up to $30,000 in the case of large stations and
$1,000 for home refueling appliances. If the fueling station owner is
a non-tax-paying entity, the seller of the fueling equipment can take
the credit.
- A program to provide grants to school districts for the replacement,
re-power or retrofit of school buses. For the cleanest natural gas
buses, the size of the grant can be as large as 50 percent of the cost
of the entire bus.
The U.S. NGV industry is now working to identify the steps that must be
taken – such as outreach programs to potential customer groups – to
maximize the beneficial impact of these and the other NGV-related
provisions in the new laws. The next 12 months will be very hectic
ones, indeed.
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