South Coast Air Quality Management District
South Coast Air Quality Management District
BOARD MEETING DATE: March 16, 2001 AGENDA NO. 6
Submit Application to ARB to Receive Funds for Implementation of Zero Emission Vehicle Incentive Program
SYNOPSIS:
The Zero Emission Vehicle Incentive Program is the result of Assembly Bill 2061 (Lowenthal) signed by Governor Gray Davis on September 30, 2000 that would provide $18 million statewide to reduce the cost of ARB certified ZEVs bought or leased on or before December 31, 2002. On December 7, 2000, ARB’s Governing Board approved the guidelines for implementation of this program. AQMD may submit an application to the ARB to implement this program locally and receive funds for this program. ARB is proposing an initial allocation of funds to AQMD, with additional allocations on a this first-come, first-served basis. Match funding are not required from air districts that wish to implement the program locally. ARB further encourages air districts to provide additional incentives for ZEVs and infrastructure.
COMMITTEE:
Technology, February 23, 2001, Recommended for Approval
RECOMMENDED ACTION:
Barry R. Wallerstein, D.Env.
Executive Officer
Background
Mobile sources are responsible for more than half of the ozone-forming emissions in California, and passenger cars and small trucks are responsible for a significant portion of the mobile source contribution. In 1990, the ARB adopted the Zero Emission Vehicle (ZEV) program as the long-term emission reduction component of the Low Emission Vehicle regulations. ZEVs have significant long-term air quality benefits because they have no emission control equipment that can deteriorate or fail, and generate only minimal "upstream" refueling and fuel cycle emissions. Many ZEVS (battery electric vehicles) are driving on California roads today, and increasing numbers of ZEVs are expected in the future. Due to the higher cost of new technology and low volume production, there is an incremental cost for these vehicles compared to conventional vehicles. AQMD’s MSRC has provided "buydowns" for these vehicles and infrastructure incentives in cooperation with the California Energy Commission (CEC) to encourage the early introduction of these vehicles in our area. Several other air districts, in cooperation with the CEC, have offered similar "buydown" programs, but their funding has been limited and many air districts have not been able to participate.
Proposal
The Zero Emission Vehicle Incentive Program is the result of Assembly Bill 2061 (Lowenthal) signed by Governor Gray Davis on September 30, 2000. ARB has the primary responsibility for administering this program, which will provide $18 million to reduce the cost of zero emission vehicles. On December 7, 2000, the ARB's Governing Board adopted the guidelines for the Zero Emission Vehicle Incentive Program. The purpose of the program is to reduce the incremental cost of electric vehicles and expedite their placement in California.
Qualified vehicles are eligible for up to $3,000 per year for up to three years resulting in a maximum $9,000 grant per vehicle. The actual amount of the grant is determined by the ARB in consultation with the CEC. The CEC determines the incremental cost of the zero emission vehicle relative to a comparable conventional vehicle based on information provided by the vehicle manufacturer. The maximum allowable grant per vehicle is calculated by subtracting $1000 from the incremental cost and multiplying the remaining incremental cost by 90%, up to $9000. 2000 vehicles would receive grants, if all vehicles are eligible for the maximum $9,000 per vehicle.
These grants are available to individuals, local government, state agencies, nonprofit organizations and private businesses who purchase or lease a qualified ZEV on or after October 1, 2000 but on or before December 31, 2002. All of the funds are to be used for grants, and not for program administration.
Eligible vehicles must be new or "substantially upgraded" passenger cars or light-duty trucks capable of operation on the freeway. ARB will maintain a list of eligible vehicle models. Vehicles must register with the Department of Motor Vehicles and meet all applicable safety standards.
When a consumer leases an ARB certified zero emission vehicle, the consumer has the choice to assign the grant to the financing company or apply for an annual grant. If the consumer assigns the grant, the monthly lease payment is recalculated on the reduced capitalized cost of the vehicle. Most ZEVs are currently offered for lease. Grants are available on a first-come, first serve basis. Pre-authorization is encouraged. ARB provides information about ZEV incentives on a dedicated web site http://www.zevinfo.com or by calling 1-800-END-SMOG. Extensive outreach is proposed to automobile makers and their dealers, fleets and individuals.
Staff recommends the Governing Board’s approval to administer the Zero Emission Vehicle Incentive Program locally according to the ARB’s guidelines, and to establish a dedicated special revenue fund.
Benefits to AQMD
The AQMP relies on the expedited implementation of advanced technologies and clean-burning fuels in Southern California to achieve air quality standards.
The successful implementation of the Zero Emission Vehicle Incentive Program will provide incentives and expedite commercialization of zero emissions vehicles, and will reduce public exposure to mobile source emissions in the South Coast region. These incentives are available for fleets required to comply with AQMD Rules 1191 and 1194.
Resource Impacts
The AQMD is expected to receive an initial allocation of $2 million for the Zero Emission Vehicle Incentive Program from the ARB. Additional funds are expected at a later date. The AQMD is not required to provide any local match for the program.
Monies received from the ARB will be placed in a separate fund, only to be used as grants for the purchase or lease of zero emission vehicles in the South Coast region, according to the guidelines adopted by the ARB Governing Board on December 7, 2000.
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