Hatch, Cantwell, Obama introduce plan to promote plug-in hybrids
June 14, 2007HATCH, CANTWELL, OBAMA INTRODUCE PLAN TO PROMOTE PLUG-IN HYBRIDS
Washington – Senate Finance Committee members Sens. Maria Cantwell (D-Wash.) and Orrin Hatch (R-Utah) with Sen. Barack Obama (D-Ill.) today introduced a bill to help develop commercially viable plug-in hybrids and other electric-drive vehicles, which would shift the nation from its dependence on liquid fuels and toward much cleaner – and cheaper – electricity 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 MPG in the city.
“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.”
“Our transportation system in this country is out of date,” said Cantwell.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.”
“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.”
Their plan 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. The provision will be patterned after the CLEAR ACT, sponsored and passed by Hatch as part of the Energy Policy Act of 2005, which is currently providing financial incentives for consumers to purchase alternative fuel and hybrid electric vehicles.
Second, their proposal would provide tax incentives for the U.S. production of PEDVs and PEDV dedicated parts.
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.
Rep. Lloyd Doggett (D-Tex.) has introduced similar legislation (H.R. 1331) in the House, and expects the Ways and Means Committee to consider it by the end of the month.
“More and more members of the House and Senate are getting behind the wheel of the plug-in hybrids campaign,” said Doggett, a senior member of the House Ways and Means Committee. “Moving forward on plug-in hybrid legislation will help us move from the fossilized ideas of our energy past to the renewable promise of our energy future.”
Hatch’s full press conference statement follows:
Thank you all very much for coming to our press conference today. Senators Maria Cantwell, Barack Obama, and I have been working very hard together, since the beginning of this year, to construct a legislative proposal to position the United States as the world’s leader in the development and production of a new age in transportation.
Our proposal is the Fuel Reduction using Electrons to End Dependence On the Mideast Act of 2007, or the FREEDOM ACT. With it, we hope to initiate a shift in the transportation sector away from liquid fuels and toward the greater use of electrons. As most of you know, electricity can be much cheaper and cleaner than petroleum, and electricity can be generated domestically and independent of the global oil market. We believe that the United States is in a unique position to take the leadership role in developing the market, the technology, and the domestic production capacity for this dramatic shift in the transportation sector.
Some of the groups and industry members here with us today will play important roles in positioning our country in this leadership role.
I cannot emphasize enough, the pleasure it has been to work so closely on this proposal with Senators Cantwell and Obama, both of whom are leaders in this area of energy policy. The FREEDOM Act is truly the product of our combined effort and vision.
Let me quickly outline the bill and then turn over the time to Senator Cantwell. Senator Obama very much regrets that he cannot be here today.
The FREEDOM Act’s goals would be achieved through four strong tax incentives: First, a tax credit for consumers who purchase plug-in electric or plug-in hybrid electric vehicles; second, for a limited time, a tax credit for consumers who convert their existing hybrid electric vehicles to high quality plug-in hybrid vehicles; third, a strong tax incentive for the U.S. manufacture of plug-in vehicles and of major components of plug-in vehicles, such as batteries, electric motors, and electronic controllers; and finally, a tax credit for electric utilities that provide rebates to customers who buy plug-in vehicles.
Freedom Plug-in Credits would cover the consumer purchase of vehicles which use batteries and which plug into the electric grid for at least part of their power. This would include plug-in electrics, plug-in hybrids, and others. The amount of the credit would be based on the kilowatt hours of the vehicle’s battery pack, with a cap of $7,500 for passenger vehicles. The same is true for heavier duty vehicles, except that the caps are scaled up for each vehicle weight class.
Freedom Conversion Credits would go to hybrid-electric vehicle owners who choose to convert their vehicle to a high quality plug-in hybrid. These credits would also be scaled to the kilowatt hours of the new battery installed in their vehicle. Only high quality conversion kits, which are certified to meet all highway safety and emissions standards would qualify for a Freedom Conversion Credit, and the credits would be available until the market transitions toward commercially available plug-in hybrid vehicles.
The FREEDOM Act also offers first-year expensing for companies setting up production capacity in the United States for plug-in electric drive vehicles and for major components of those vehicles.
Finally, in the case that an electric utility in the U.S. chooses to offer rebates to customers who purchase plug-in electric drive vehicles, the FREEDOM Act would reimburse the utility for part of that rebate in the form of a Freedom Utility credit. The amount of the government reimbursement would be based on the rate of greenhouse gas emissions for each utility.
