Alternative Fuel Transportation Grant Program

June 22, 2005

Summary

Indiana's Alternative Fuel Transportation Grant Program is designed to enable businesses and institutions to acquire alternative fuel vehicles and to make use of alternative transportation fuels. This program replaces the transportation components of the EPD's previous Alternative Energy Systems Grant Program. Businesses, non-profit institutions and units of local government (including public school systems) are eligible to apply for grants. Projects eligible for grants include those that involve the purchase of alternative fuel vehicles, the conversion of conventionally fueled vehicles to run on alternative fuels, the installation of alternative fuel vehicle refueling facilities, the purchase and use of renewable transportation fuels, or combinations of these purposes. Alternative fuel vehicles include vehicles capable of running on electricity, ethanol, propane, hydrogen and natural gas. They do not include hybrid electric vehicles. For the purposes of this program, alternative fuel vehicles and alternative fuels are defined according to applicable U.S. Department of Energy definitions under the Energy Policy Act of 1992. Eligible projects will apply commercially available technologies. Grants under this program will not be awarded to fund research projects. Entities that are required to purchase alternative fuel vehicles under the Energy Policy Act of 1992 are not eligible for grants under this program. Grant amounts range from $2,000 to $30,000 and are determined according to the following formulas: 1. For the purchase of factory-built alternative fuel vehicles for which the manufacturer produces a conventionally fueled equivalent, 80% of the additional cost of the alternatively fueled version is eligible for funding. 2. For the purchase of factory-built alternative fuel vehicles for which the manufacturer does not produce a conventionally fueled equivalent, 30% of the overall cost of the vehicle is eligible for funding. 3. For the conversion of vehicles to use alternative fuel, 80% of the cost of conversion. 4. For the purchase and installation of refueling facilities for alternative fuel to be used in vehicles, 50% of the cost is eligible for funding. 5. For the purchase and use of 85% ethanol (E-85) and for biodiesel in blends of 20% or higher, 50% of the additional purchase cost above that of conventional fuel is eligible for funding. Applications will be evaluated and scored based on the following criteria: 1. Project soundness. Applicants should demonstrate that the proposed project is appropriate and technically feasible. The applicant should demonstrate the ability to acquire the appropriate alternative fuel for the vehicles envisioned in the project. The applicant should also provide reliable estimates of the service life and annual mileage of vehicles to be bought or converted to alternative fuel. Because the State of Indiana must make payments in arrears, applicants should demonstrate their ability to make full payment of project costs before reimbursement by the state. Applicants may also be required to submit written estimates of costs from service or equipment providers and/or documentation of comparable technology applications. 2. Petroleum fuel savings. Applicants should demonstrate that the proposed project will result in a significant decrease in the consumption of gasoline or diesel fuel. Applications should include projections of service life and annual miles for each vehicle, along with fuel mileage, to calculate overall petroleum fuel savings. 3. Environmental effect. Applicants should describe how their use of alternative fuel vehicles will produce environmental benefits. Greater credit in this category will go to projects involving dedicated fuel vehicles, vehicles with zero or very low tailpipe emissions, and those projects that represent the greatest emission reductions compared to conventional vehicle use. 4. Economic development. Applicants should describe how the project will facilitate economic development in Indiana. This may be demonstrated, for example, by the creation of new jobs, increased productivity, cost-of-business savings to the applicant, or support of Indiana business and industry. Consideration is given to the level of commitment to and the effect on alternative energy use in Indiana. Successful grant recipients are required to complete reports describing progress toward contracted goals.