73% Of Americans Prioritizing Alternative Energy

In a recent Gallup poll, 73% of respondents said they personally are prioritizing use of alternate energy sources. Past polls show that a majority of Americans have favored alternative energy since 2011, but "this year marks the first time a majority of Republicans and Republican-leaning independents prefer an alternative energy strategy:" 51%. One theory offered for this is that with lower gasoline prices, Americans feel there is less risk in shutting down some oil drilling in the U.S.

Here is the page on the Gallup website where they present the results of this poll.

What are some common questions related to the federal tax credits for alternative fuels and infrastructure?

Question of the Month: It's tax time! What are some common questions related to the federal tax credits for alternative fuels and infrastructure?

Answer: Tax season is upon us, and the recent federal tax incentive extensions and changes impact the alternative fuel and infrastructure tax credits.

The Consolidated Appropriations Act of 2016 (H.R. 2029) retroactively extended several tax credits, including the Alternative Fuel Excise and Alternative Fuel Infrastructure Tax Credits. It also included updates to calculation method for the Alternative Fuel Excise Tax Credit amounts, specifically for propane and liquefied natural gas (LNG). Below we discuss three recent frequently asked questions about these credits.

How have the Alternative Fuel Excise Tax Credit amounts changed for propane and LNG in 2016 and beyond?

The Alternative Fuel Excise Tax Credit applies to alternative fuel sold or used to operate a motor vehicle. Previously, the excise tax credit amount for propane and LNG was based on a volumetric basis ($0.50 per gallon). For fuel sold or used starting January 1, 2016, however, the excise tax credit amount for propane and LNG is based on an energy equivalent basis. This means the credit for propane is now measured per gasoline gallon equivalent (GGE) and LNG is measured per diesel gallon equivalent (DGE). Specifically, the updated Internal Revenue Service (IRS) Form 8849, Schedule 3 defines 2016 tax credit rates for propane and LNG as follows:

• Propane: One GGE is equal to 5.75 pounds (lbs.) or 1.353 gallons of propane.
• LNG: One DGE is equal to 6.06 lbs. or 1.71 gallons of LNG.

What does this mean for propane and natural gas retailers and fleets? In short, the tax credit for the same amount of fuel is now less:

• The propane tax credit was previously $0.50 per gallon and is now $0.50 per GGE (1.353 gallons of propane), which equates to $0.37 per gallon.
• The LNG tax credit was previously $0.50 per gallon and is now $0.50 per DGE (1.71 gallons of LNG), which equates to $0.29 per gallon.

The tax credit amount for compressed natural gas (CNG) is still based on the GGE, where one GGE is equal to 121 cubic feet.

Natural Gas Vehicles for America (NGVAmerica) provides additional information on federal tax incentives for LNG and CNG, and highlights the impacts of the recent tax credit changes in the article New Year Rings in Changes for CNG and LNG in 2016. The National Propane Gas association explains the excise tax equalization for propane.

So, you said the Alternative Fuel Excise Tax Credit was retroactively extended. Does that mean I can claim it for fuels sold or used in 2015?

Yes! Both the federal Alternative Fuel Excise Tax Credit and Biodiesel Mixture Excise Tax Credit were extended to cover 2015, meaning that propane, CNG, LNG, hydrogen, and biodiesel sold or used in 2015 are eligible for the federal tax credit. To file for the tax credit, registered claimants must submit a single one-time 2015 claim with IRS Form 8849, as well as the accompanying Schedule 3. The deadline to submit a claim for fuels sold or used in 2015 is August 8, 2016. Please note that the tax credit amount for propane and LNG sold or used in 2015 is based on the previous, volumetric rate of $0.50 per gallon.

For additional information on claiming the tax credit for fuels sold or used in 2015, please see IRS Notice 2016-05.

Are tax-exempt entities eligible for the Alternative Fuel Infrastructure Tax Credit?

While a tax-exempt entity, such as a school or state government fleet, may not be eligible to claim the Alternative Fuel Infrastructure Tax Credit directly, the entity selling the fueling infrastructure to the tax-exempt entity can claim the credit and pass the "discount" along to the fleet. According to Title 26 of the United States Code, Section 30C(e)(3), the entity selling the fueling equipment to the tax-exempt entity can be treated as the taxpayer and claim the Alternative Fuel Infrastructure Tax Credit, but only if the seller discloses the amount of the credit allowable to the tax-exempt purchaser in writing. In practice, this means the tax-exempt fleet would have the opportunity to use this information to request a discount. However, the infrastructure seller is not required to pass along any savings associated with the tax credit.

For more information on how tax-exempt entities may be eligible for the Alternative Fuel Infrastructure Tax Credit, please see the IRS Instructions for Form 8911.

Please note that the Technical Response Service recommends consulting a qualified tax professional or the IRS before making any tax-related decisions.


Clean Cities Technical Response Service Team
technicalresponse@icfi.com
800-254-6735

Clean Energy CEO Strongly Supports Senator Inhofe letter to EPA

From Clean Energy:

March 18, 2016—CEO Andrew J. Littlefair today gave his strong support to Senator Jim Inhofe (R-OK) and the letter he delivered to EPA Administrator Gina McCarthy, detailing how the EPA should incorporate natural gas vehicles into remediation efforts when investigating the Volkswagen diesel emissions issue.

"Senator Inhofe has given the EPA a proven path to significantly remediate the excess diesel emissions caused by Volkswagen. Natural gas vehicles with the new 'Near Zero' engine, available on the market today, lower nitrogen oxide emissions by 90 percent or more over their diesel counterparts, and provide a cost-effective real-world answer to this challenge. Only a comprehensive solution including both light duty electric vehicles, and natural gas vehicles in the medium and heavy-duty trucking markets, will be able to correct the damage caused to our environment."

Natural gas fuel costs less per gallon than gasoline or diesel, depending on local market conditions. The use of natural gas fuel not only reduces operating costs for vehicles, but also reduces greenhouse gas emissions up to 30% in light-duty vehicles and 23% in medium to heavy-duty vehicles. In addition, nearly all natural gas consumed in North America is produced domestically.

You can find a copy of the Senator's letter here. He says:

Volkswagen has until March 24 to provide the court with an explanation as to how it plans to fix the emissions problem with the diesel vehicles that the company has acknowledged violate emission standards set under the Clean Air Act. I understand that EPA has requested Volkswagen produce light duty electric vehicles as part of the settlement: in February, Reuters reported EPA "was asking VW to produce electric vehicles at its plant in Chattanooga, Tennessee, and to help build a network of charging stations for electric vehicles in the United States." While EPA has favored EVs in the past and inevitably will continue to do so, EVs are not the only answer to mitigating the Volkswagen emissions issue. If the purpose of the settlement is to remediate the excess nitrogen oxide and other pollutants emitted by compromised Volkswagen light duty vehicles, requiring light duty EV production will have little overall impact. It is my understanding that new heavy-duty natural gas powered trucks can be equipped with engines that lower nitrogen oxide emissions by 90 percent or more compared to available diesel engines, and that these heavy-duty vehicles, if deployed, could offset significantly more pollution than electric vehicles, and in a much more cost-effective way.

Fuel Cell Electric Buses in California

From the California Fuel Cell Partnership

Fuel Cell Electric Buses in California

More than 15 years of experience in California

California has 20 fuel cell electric buses (FCEBs) operating in daily revenue service at three locations.

• 13 in the San Francisco East Bay by AC Transit
• 5 in the Coachella Valley with SunLine Transit, with 7 additional buses planned for delivery
• 1 at UC Irvine
• 1 at Orange County Transportation Authority (OCTA) (coming April 2016)
• 1 25-passenger transit shuttle is funded for operation by Fresno County Rural Transit Agency
• 2 25-passenger transit shuttles are funded for Cal State LA
• 2 29-passenger transit shuttles are funded for SunLine

Interest in zero-emission buses is growing here and abroad

38 applicants recently applied for $23.6 million (FY14-15 funds) in state funding for zero-emission buses and medium and heavy-duty vehicles. This grant funding cycle was over-subscribed for a total of $290 million in requests. Another $60 million was planned for FY 15-16 for this program, but remains unappropriated.

• The European Union is currently soliciting applicants for a program to build up to 100 fuel cell electric buses, validating industry reports that sufficient volume can reduce the cost to an equivalent of $700k per bus.
• In China, construction has begun on more than 300 FCEBs for the cities of Rugao, Foshan and Yunfu in 2016/17.
• In Japan, Hino, a subsidiary of Toyota, plans on producing 100 FCEBs for the Tokyo Metropolitan Government in time for the 2020 Tokyo Olympics.

Why FCEBs?

Fuel cell electric buses have consistently demonstrated superb operating performance in their ability to maintain sustained power and acceleration in a wide spectrum of operating conditions, smooth and quiet operation, and the same range as conventional buses with about double the fuel efficiency. Plus -

• No local in-route emissions
• Quiet operations
• Operate well in extreme temperatures

FCEBs pave the way for the introduction of heavy-duty vehicles

• Transit agencies tend to be first adopters of advanced heavy-duty vehicle technologies. Such efforts enable the private sector to assess and adopt these technologies.
• Supporting zero-emission buses, battery and fuel cell, will not only help local transit agencies contribute to on-road emission reduction, it will also help develop the technology for other medium and heavy-duty vehicle platforms.

Status Report

• More than 2.7 million miles in service in California.
• More than 2.5 million passengers carried in California.
• DOE and DOT have set performance targets. These targets (e.g. range or fuel economy) have been achieved or are within line of sight without requiring major technology advances (e.g. durability).
• California Fuel Cell Partnership CaFCP.org
• FCEBs are at Technology Readiness Level 7 – Level 9 is considered commercial.
• The National Renewable Energy Laboratory (NREL) has collected FCEB data across North America since 2004.

SunLine Transit (Thousand Palms, CA)

• In 1994, SunLine was the first transit agency in the U.S. to transition its entire fleet to CNG buses.
• In 2001, SunLine acquired its first FCEB. The most recently received buses represent SunLine's 8th generation of FCEBs.
• Since then, its fuel cell buses have accumulated more than 1.3 million miles.

AC Transit (Oakland, CA)

• Since 2000, AC Transit has been building the most comprehensive hydrogen fuel cell demonstration program in the United States.
• From 2006 to 2010, AC Transit operated three FCEBs, logging more than 270,000 miles and carrying over 700,000 passengers, all while achieving significantly greater overall energy efficiency than diesel buses.
• In 2010, AC Transit received 12 new FCEBs, which have since logged more than 1.4 million miles and 174,281 hours of operation. In 2014, the FCEB transferred from CT Transit was added, bringing the total size of the AC Transit fleet to 13.
• The lead fuel cell on one bus is now at 22,000 hours of life and is a 2002 design that was not expected to exceed 5,000 hours.
• AC Transit's fuel cell buses have consistently achieved 60% greater fuel efficiency than comparable diesel buses. On higher speed, commuter routes, the efficiency has been as much as twice that of the diesel fleet.

Centers of Excellence

CaFCP's members developed the Bus Road Map which calls for Northern and Southern California centers of excellence in order to provide the economies of scale necessary for substantive cost reductions. SunLine Transit, a national and international leader in FCEB demonstration, is committed to becoming a center of excellence and a showcase for the technology.


A center of excellence would have these features:

• A large scale deployment of fuel cell hybrid buses that comply with transit agency requirements and are operated in normal revenue service on scheduled runs (e.g. no compromise or deviation in service)
• A 12-year operating period, per US DOT FTA
• Hydrogen fueling infrastructure with throughput sufficient to achieve a fuel cost per mile comparable to conventional buses
• Regional training and education for transit staff and community stakeholders

Resources

• National Fuel Cell Bus Program
• Fuel Cell Bus Targets
• National Fuel Cell Bus Evaluations
• International Fuel Cell Bus Collaborative

Questions? Contact the California Fuel Cell Partnership
Nico Bouwkamp, Technical Program Manager, nbouwkamp@cafcp.org
Keith Malone, Public Affairs, kmalone@cafcp.org
Bill Elrick, Executive Director, belrick@cafcp.org