INSIDE WASHINGTON/AFV mandate looms over states

A recent Department of Energy decision means that cities and counties will not have to start perusing local auto dealerships for alternative fuel vehicles (AFVs). DOE decided to let an all-important Dec. 15, 1996 deadline pass without requiring local governments to buy AFVs. That does not mean, however, that AFVs are yesterday’s news.

DOE will have another chance to impose a mandate within the next few years. Moreover, an AFV tax incentives bill will likely be introduced early in the next Congress. That bill could get a boost from the Clinton Administration, particularly Vice President Al Gore, who has been active on automobile efficiency issues.

Of course, some local governments are already driving that road, even if in low gear. Mary Sigmon, the Clean Cities Coordinator in Chicago, says there are about 2,000 AFVs, which burn ethanol or compressed natural gas (CNG), in the six counties that are part of the Chicago ozone “Non-Attainment Area.”

That, however, is a drop in the bucket, considering the area has about 400,000 fleet vehicles in private or governmental fleets of 10 or more vehicles.

And neither Chicago nor any other city is anxious for DOE to force it to buy AFVs. But the Energy Security Act (ESA) of 1992 had as one of its goals replacing 10 percent of the nation’s gasoline-powered governmental fleet vehicles with AFVs by 2000 and 30 percent by 2010. The act would have required local governments that met certain criteria to buy light-duty AFVs for 20 percent of their fleets, beginning with the 1999 model year and increasing that number to 70 percent of their fleets in 2006.

Still, another ESA-inspired mandate would require states that meet certain criteria to buy AFVs for 10 percent of their fleet vehicles beginning with the 1997 model year. About 45 states meet that criteria, according to Ken Katz, program manager for DOE alternative fuels transportation. It is feared that that mandate may result in governors pushing mayors and county executives down the AFV path.

The National Association of Counties is opposed to the mandate, according to Associate Legislative Director Diane Shea. That, however, does not mean that NACo thinks AFVs are a bad idea. “In the long term, AFVs will have really important benefits for county governments,” she says.

Natural gas is already about 30 cents a gallon cheaper than gasoline. But AFV versions typically cost $5,000 more than gasoline-powered automobiles, and a lack of fueling stations nationwide makes the technology impractical.

Positive signs, however, are on the horizon. Ford has priced its Taurus Flexible Fuel Vehicles, which run on methanol or ethanol, $345 less than the gasoline model. About 5,500 of the Taurus FFs, which have been on the market since 1993, were sold in 1996. But this is the first time the AFV model has been priced below the conventional model, according to Karen Holtschneider, a Ford spokesperson. Ford is also selling the natural gas version of its Econoline van for the same price as the gasoline version.

More AFV prices are likely to drop if Congress passes the kind of AFV tax incentive package proposed at the end of the last session. And some states are not waiting for Congress.

In 1995, Illinois passed an Alternative Fuels Act that provides an 80 percent rebate on the incremental cost of an AFV.

As a result, an advisory committee in Illinois currently is putting together the criteria for a three-year program to encourage the purchase of AFVs. It will be funded by a fee on private transportation fleets of more than 10 units.

The author is the Washington correspondent for American City & County.