Cantwell, Hatch, Obama Introduce Legislation to Promote Plug-In Hybrid Vehicles

Current electricity grid, instead of gasoline, could power most vehicles on U.S. roads, according to PNNL study

WASHINGTON, DC – Thursday, Senate Finance Committee members Maria Cantwell (D-WA) and Orrin Hatch (R-UT), along with Senator Barack Obama (D-IL), introduced a bill to help develop commercially viable plug-in hybrids and other electric-drive vehicles. Plug-in vehicles have the potential to shift America off of its dependence on fossil fuels, and onto to cleaner, cheaper alternatives for transportation. The senators highlighted the goals of the bill with a press conference today featuring two plug-in hybrids which can get more than 100 miles per gallon in the city.

"Our transportation system in this country is out of date," said Cantwell. "We need to take advantage of new technologies to bring our cars and trucks up to speed, save consumers money, and diversify our country off of fossil fuels. We produce enough extra electricity right now to power most of the cars, pickup trucks, and SUVs on our roads. It’s time we made plug-in hybrid technology available to more Americans."

"With the rapid industrialization of countries like India and China, the demand for gasoline is unprecedented, and that’s translated into higher costs at the pump," Hatch said. "We’re already feeling the pain of that, and it’ll get worse unless we start shifting our transportation sector away from liquid fuels and on to electrons. The best way to motivate that shift is with these market-based incentives, rather than Federal mandates."

"Developing environmentally friendly fuel alternatives for vehicles is a critical step we can take to reduce America’s consumption of foreign oil and combat global climate change," Obama said. "The technology to produce energy alternatives exists, and we must provide the appropriate incentives to encourage consumer and manufacturer use. Supporting energy efficient technology and electric vehicles would also help the American auto industry regain its competitive edge."

According to a January study by Tri Cities-based Pacific Northwest National Laboratory (PNNL), the U.S. electricity grid is underutilized most of the time, and, with the proper plan in place, could deliver enough power to fuel most of the country’s cars and light trucks, thereby reducing greenhouse gas emissions and curbing our reliance on foreign oil. Batteries on plug-in hybrids, the vehicle type examined in the PNNL study, are typically charged at night when overall electricity consumption is minimal. Charging a plug-in hybrid at the current national average residential rate of 9 cents per kilowatt amounts to a cost equivalent to $1 per gallon of gas.

Their legislation introduced Thursday is a three-pronged strategy promoting Plug-in Electric Drive Vehicles (PEDVs), which includes pure battery electric, extended range electric, plug-in hybrid electric, and plug-in fuel cell vehicles.

First, their proposal would provide significant tax credits to consumers who purchase PEDVs. Credits would provide up to $7,500 for small to mid-sized cars and trucks, up to $10,000 for mid to larger cars and trucks, and up to $15,000 for big cars and trucks. Credits would also cover 50 percent of the cost of converting a vehicle, up to $2,000.

Second, their proposal would provide tax incentives for the U.S. production of PEDVs and PEDV dedicated parts. Through 2012, American automakers, battery manufacturers, and component makers could expense 100 percent of their retooling costs. From 2013 to 2015, this incentive would decrease to from 100 percent to 50 percent.

Third, the proposal would give incentives for electric utilities to provide rebates to customers who purchase PEDVs. These incentives would be scaled in a manner that would provide the largest incentives to utilities producing the greenest energy.