The Hill Is Alive: Legislative Happenings from California to Washington, DC

Wednesday, May 25, 2011

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National Policy
There has been a flurry of recent activity and discussion around clean transportation technologies, driven in part by high oil prices and unrest in the Middle East. Policymakers in California and at the federal level appear eager to reduce our oil dependence and create jobs. However, budget deficits and political considerations loom large, and it is not clear at this time how much real progress and investment we will actually see.

Federal The  Obama Administration continues to signal support for the clean transportation industry. The President has called for a national Clean Fleets Partnership and announced a national Clean Fleets program and called for federal agencies to purchase 100% clean vehicles by 2015. Other recent highlights include the US DRIVE partnership between DOE and industry and $47 million in biomass R&D grants for transportation.
It is clear that this will not be an easy year for energy legislation in Washington. It looks like we can expect no large-scale energy bill, transportation bill, or farm bill. However, there may be an opportunity to advance smaller efforts. Legislators realize this and are introducing (or re-introducing) several clean transportation-related bills. Natural gas and vehicle electrification are popular, with bills such as the NAT GAS Act, the Promoting Electric Vehicles Act, and the Charging America Forward Act focusing exclusively on incentives for these technologies. Other bills take a more technology-neutral approach, with a focus on clean transportation technologies as employment and energy security issues. Examples include the Advanced Vehicle Technology Act, which focuses on R&D funding, the Infrastructure Jobs and Energy Independence Act, and the Alternative Fuels Competitiveness and Energy Security Act.

The majority of the bills in play today are generally built around technology development, manufacturing, and purchase incentives. In other words, they will cost money, and anything with a large price tag will face an uphill battle in today’s budgetary and political climate. However, there is a chance for bills that are closely aligned with policy priorities in Washington. CALSTART’s Bill Van Amburg recently testified in support of some of the bills outlined above at a Senate Energy and Natural Resources Committee hearing. Bill’s comments focused on the need for multiple technological solutions and performance based incentives. This message, which seemed to resonate with policymakers, echoes a CALSTART report released earlier this year on accelerating high efficiency truck adoption.

Despite overarching concerns about jobs, fuel prices, and government budget deficits, legislators and stakeholders in California are attempting to push the envelope on clean technology issues. There have been several bills introduced this year that would affect our industry, including a number focused on electric vehicles and infrastructure. Perhaps the most ambitious and overarching piece of legislation is AB 638 (Skinner), a CALSTART-sponsored bill that would make petroleum reduction and alternative fuels usage major policy drivers for California, with a goal of 26% alternative fuels by 2026. This bill, which echoes one of the primary recommendations from a report released earlier this year by the California Secure Transportation Energy Partnership (CalSTEP), enjoys the support of a large and growing group of clean transportation technology companies.

California is currently a bright spot for clean transportation investments, largely as a result of the state’s AB 118 program. The two agencies that manage funds under this program – the California Air Resources Board (CARB) and the California Energy Commission (CEC) – are currently working to finalize investment plans for FY 2011-2012 that would provide up to $140 million in grants, loans, and purchase incentives for a wide variety of efficiency and alternative fuel technologies, with staggered solicitations expected throughout the fiscal year. See the CEC and CARB draft investment plans for details. In addition to investments in demonstrations and R&D, both agencies currently have vehicle buy-down funding available, with the CEC providing $15-30 million for natural gas trucks and buses and CARB providing rebates and purchase vouchers for hybrid and electric trucks and buses as well as zero emission passenger vehicles.

Though California is currently investing roughly $700 million per year in clean transportation technologies, the state’s investments are scheduled to drop dramatically over the next five years. Both CALSTART and CalSTEP have identified this as a major issue, and we intend to work with stakeholders to identify potential solutions and ensure long-term funding.

If you have questions about California or federal policy initiatives, contact Jamie Hall, Policy Director, or 510-307-8774.