Road to Energy Independence: New York Citys Alternative Transportation Future Conference and Exposit

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Road to Energy IndependenceNew York Citys
Alternative Transportation FutureConference and
Exposition at Bronx Community CollegeFederal
AFV Incentives Presentation byRonald J.
GulmiLead Account Executive KeySpan Energy
DeliveryBoard Member of the Natural Gas Vehicle
Coalition

• October 28, 2005

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ENERGY AND HIGHWAY BILLS OF 2005

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ENERGY BILLTODAY

• HR 6, the Energy Policy Act of 2005
• Passed the House on July 28, 2005
• by a vote of 275-156
• Passed the Senate on July 29, 2005
• by a vote of 74-26
• PL 109-58
• (continued)

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ENERGY BILL PROVISIONSVehicle Tax Incentives

• A Tax Credit to the BUYER of a new
• Advanced Lean Burn Vehicle
• Hybrid Vehicle
• Alternative Fueled Vehicle
• Fuel Cell Vehicle
• (continued)

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ENERGY BILL PROVISIONS Advanced Lean Burn
Vehicle Tax Incentives

• A Tax Credit to the Buyer of an Advanced Lean
  Burn Motor Vehicle
• Passenger Vehicles and Light Trucks
• Credits range from 400 to 3,400
• Amount of credits are based on fuel economy
  gains and life time fuel savings
• (continued)

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ENERGY BILL PROVISIONS Advanced Lean Burn
Vehicle Tax Incentives

• A Tax Credit to the Buyer of an Advanced Lean
  Burn Motor Vehicle
• The fuel economy level is based on a gains over
  the MY 2002 baselines.
• Must meet Tier II Bin 5 emission levels for cars
  and
• Tier II Bin 8 for light trucks
• Expires after December 31, 2010.
• (continued)

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ENERGY BILL PROVISIONS Hybrid Vehicle Tax
Incentives

• A Tax Credit to the Buyer of a New Hybrid Vehicle
  
• Credits range from 400 to 3,400
• Amount of credits are based on fuel economy and
  life time fuel savings
• Eligible hybrids must achieve at least 4 maximum
  available power from its rechargeable energy
  storage system.
• (continued)

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ENERGY BILL PROVISIONS Hybrid Vehicle Tax
Incentives

• A Tax Credit to the Buyer of a New Hybrid Vehicle
  
• Must meet a Tier II Bin 5 emission level for cars
  and Tier II Bin 8 for light trucks
• The number of vehicles eligible for the credit is
  capped 60,000 per manufacturer.
• The credit is phased out over the next year once
  the cap is reached at 50 and 25 values for six
  months.
• Effective date is January 1, 2006 to December 31,
  2009.
• (continued)

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ENERGY BILL PROVISIONS Hybrid Vehicle Tax
Incentives

• A Tax Credit to the Buyer of a New Hybrid Vehicle
  
• Examples
• Ford Escape (2wd) 2600
• Honda Civic (auto) 2100
• Toyota Prius 3150
• Source American Council for an Energy Efficient
  Economy
• (continued)

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ENERGY BILL PROVISIONS Alternative Fuel
Vehicle Tax Incentives

• A Tax Credit to the Buyer of a New, Dedicated
  Alternative Fuel Vehicle
• Credits range from 2,500 to 32,000 depending on
  the size of the vehicle,
• and emission standards of the engine.
• (continued)

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ENERGY BILL PROVISIONS Alternative Fuel
Vehicle Tax Incentives

• A Tax Credit to the Buyer of a New, Dedicated
  Alternative Fuel Vehicle
• 50 percent of the incremental cost of the
  vehicle,
• plus an additional 30 percent if the vehicle
  meets certain tighter emission standards.
• Effective date is January 1, 2006 to December 31,
  2010
• (continued)

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ENERGY BILL PROVISIONSFuel Cell Vehicle Tax
Incentives

• A Tax Credit to the Buyer of a Fuel Cell Vehicle
• Base credit that depends on weight class of the
  vehicle
• LDV must meet Tier II Bin 5 emissions levels.
• Additional credit based on fuel efficiency
  improvements of MY 2002 baselines
• Credits can range from 8,000 to 44,000
• Effective date is January 1, 2006 to December 31,
  2014
• (continued)

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ENERGY BILL PROVISIONSVehicle Tax Incentives

• A Tax Credit to the Buyer of an Advanced Lean
  Burn, Hybrid, or Dedicated Alternative Fuel
  Vehicle or Fuel Cell Vehicle
• If the buyer is a non-tax paying entity and the
  seller discloses the value of the credit, the
  credit goes to the seller .
• (continued)

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ENERGY BILL PROVISIONS Infrastructure Tax
Incentives

• A Tax Credit Equal to 30 of the Cost of
  Refueling Equipment
• Fuels that qualify
• CNG, LNG, LPG, Hydrogen, E85, or any biodiesel
  mixture of 20 or more
• Up to 30,000 in the case of large stations
• Up to f1,000 for home refueling appliances
• (continued)

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ENERGY BILL PROVISIONS Infrastructure Tax
Incentives

• A Tax Credit Equal to 30 of the Cost of
  Refueling Equipment
• The existing 100,000 tax deduction for refueling
  property is repealed
• The credit is effective on purchases made after
  December 31, 2005 and expires on December 31,
  2009 for all fuels except hydrogen (after 2014)
• (continued)

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HIGHWAY BILLHistory

• HR 3- SAFETEA-LU
• Passed the House on July 29, 2005
• by a vote of 412-8
• Passed the Senate on July 29, 2005
• by a vote of 91-4
• PL 109-59
• (continued)

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HIGHWAY BILLAlternative Fuel Tax Incentives

• Volumetric Excise Tax Credit for Alternative
  Fuels VEETC
• (continued)

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HIGHWAY BILLAlternative Fuel Tax Incentives

• VEETC Volumetric Excise Tax Credit for
  Alternative Fuels
• The JOBS act of 2004 created VEETC for ethanol
  and biodiesel
• Highway bill made CNG, LNG, LPG, Hydrogen, and
  other alternative fuels eligible when those fuels
  are used in on-road vehicles
• (continued)

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HIGHWAY BILLAlternative Fuel Tax Incentives

• Increased the motor fuels excise tax rate for
  CNG, LNG and LPG to fund the Highway Trust Fund.
• CNG and LPG are increased 18.3 cents
• LNG is increased to 24.3 cents
• (continued)

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HIGHWAY BILLAlternative Fuel Tax Incentives

• Tax Increase is offset with a 50 cents per gallon
  excise tax credit paid to the seller of the fuel
• (continued)

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HIGHWAY BILLAlternative Fuel Tax Incentives

• Compared to the current situation (i.e. an excise
  tax of 4.9 cents per gge of CNG and 11.9 cents
  per gallon of LNG and 13.6 cents per gallon of
  LPG), the net benefit will be
• For CNG 36.6 cents per gge
• For LNG 63.6 cents per dge
• For LPG 62.3 cents per gge
• (continued)

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HIGHWAY BILLAlternative Fuel Tax Incentives

• CNG, LNG and LPG now pay the same rate of tax
  into the Highway Trust Fund as all other
  transportation fuels
• The credit will be paid to eligible recipients on
  a regular basis without regard to the amount of
  excise tax paid.
• The credit begins on October 1, 2006 and expires
  on September 30, 2009.
• (continued)

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Biodiesel Credit Extension PASSES!

• Passed in Energy Bill
• Through 2008 v. 2006
• Federal Excise Tax Credit
• Taken at blender level
• 50 cent credit for each gallon of biodiesel
  blended into diesel fuel
• 1 for agri-biodiesel
• First use veg oils and fats

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IRS Has Also Issued New Guidance

• Guidance Clarifies
• What constitutes a Biodiesel Mixture (1 gallon
  of diesel fuel blended into 999 gallons of
  biodiesel, or B99.9)
• Means biodiesel producers may qualify
• A biodiesel mixture includes both dyed and
  un-dyed fuel
• Provisions for transfer of certificates by
  resellers
• Provisions for commingling of biodiesel and
  agri-biodiesel
• Clarification on eligible feedstocks for
  agri-biodiesel (includes palm and fish oil).
• Clarifications on applicable forms to claim
  credit and credit calculation

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How will it affect price?

• Will make it MORE cost competitive
• There will be variables that determine the cost
  differential, but the tax incentive will help
  close the gap.
• Biggest variables will be infrastructure, petrol
  price

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How will consumers benefit?

• Competition will drive blenders to pass on
  savings to consumers.
• Evidence of this can be seen in the ethanol
  market and the bioenergy market. Nearly the full
  amount of the credits were passed through.

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HIGHWAY BILL PROVISIONS Clean School Bus Program

• Establishes a program to provide grants to school
  districts and related organizations for the
  replacement, repower or retrofit of school buses.
  
• (continued)

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HIGHWAY BILL PROVISIONS Clean School Bus
Program

• Clean School Bus Program Funding Criteria
• 50 of the cost of the new bus if the engine
  emissions
• For MY2005 and 2006 meet
• 1.8 grams NOx plus NMHC and 0.01 grams PM.
• For MY2007, 2008 and 2009 meet
• 0.2 grams NOx plus NMHC and 0.01 grams PM (the
  2010 EPA emission standards)
• (continued)

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HIGHWAY BILL PROVISIONS Clean School Bus
Program

• Clean School Bus Program Funding Criteria
• 25 of the cost if the engine emissions
• For MY2005 and 2006, meet
• 2.5 grams NOx plus NMHC and 0.01 grams PM.
• For MY2007, 2008 and 2009, regulatory
  requirements by EPA.
• This is assumed to mean the phase-in requirement
  to 2010 which is 1.2 grams NOx plus NMHC and 0.01
  grams PM.
• (continued)

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HIGHWAY BILL PROVISIONS Clean School Bus
Program

• Other provisions
• No state can receive more than 10 percent of the
  monies made available each year.
• Authorizes
• 55 million for FY2006 and 2007
• such sums as are necessary for fiscal years
  2008-2010.
• (continued)

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APPROPRIATIONS Clean Cities FY2006

• Clean Cities Appropriations for FY 2006
• Congress Appropriated 10.5 million in FY 2005
• Administration requested 6.5 million for FY 2006
• House suggested 7.0 million for FY 2006
• Senate suggested at least equal to last years
  level
• (continued)

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APPROPRIATIONS Green School Bus Program

• EPAs Clean School Bus USA program
• Congress Appropriated 7.5 million in FY 2005
• The Administration requested 10 million in FY
  2006
• Congress Appropriated 7 million for FY 2006
• (continued)

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ENERGY BILL PROVISIONS Vehicles and Fuels

• Other Energy Bill Provisions
• A new Clean Cities Pilot Program
• Two new fleet modernization grant programs
• Ports and hauling operations
• State and Local Government Agencies
• (continued)

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ENERGY BILL PROVISIONS Vehicles and Fuels

• Other Energy Bill Provisions
• A new Railroad Efficiency Program
• An EPA report on Mobile Emissions Trading and
  Crediting
• Biodiesel Engine Testing Program
• Hythane and Biodiesel Report
• (continued)

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ENERGY BILL PROVISIONSVehicles and Fuels

• Other Energy Bill Provisions
• GSA incremental cost distribution
• Use of Alternative fuel by Federal Fleets
• Extends CAFE credits for AFVs

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HIGHWAY BILL PROVISIONSVehicles and Fuels

• Other Highway Bill Provisions
• Hybrids now have HOV Access
• Diesel retrofits are now eligible for CMAQ funds
• Study on truck fuel that is NOT used for
  transportation purposes

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ENERGY BILL

• Site
• http//energycommerce.house.gov/108/0205_Energy/c
  onference/EnergyConf_report.pdf

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HIGHWAY BILL

• Site
• http//thomas.loc.gov/cgi-bin/query/query
• Click on H.R. 3. ENR

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• For more information please contact
• Ronald J. GulmiLead Account ExecutiveKeySpan
  Energy Delivery
• 175 E. Old Country Road
• Hicksville, NY 11801
• [phone]rgulmi_at_keyspanenergy.com
• OR
• Paul C. KerkhovenNatural Gas Vehicle
  Coalition400 N. Capitol St. NW 4th
  floorWashington, DC20001
• [phone]pkerkhoven_at_ngvc.org