NEVs in Nebraska: Round 2

By Bill Moore

Posted: 15 Feb 2011

This afternoon I drove LIVN GRN, our Plug In Conversions Corporation converted Prius to our State Capital in Lincoln, exactly 50 miles from our home, getting 46.4 mpg in hybrid mode going down and 66.6 in blended electric hybrid mode on the return trip. I was on hand to testify at a public hearing that included a new bill, LB 289, which would allow neighborhood electric vehicles to legally operate on our public streets. My written testimony is reprinted below.

This year's bill narrows the definition of what type of vehicle would be allowed to those defined by federal statute: they must be able to travel at least 20 mph, but no faster than 25. They are required to have a number of important safety features including seat belts, headlight, safety glass windshields, wipers and turn signals. Importantly, they can only travel on city streets with speed limits of 35 mph or less. Last year a bill would have included golf cars in the regulation. That provision is no longer in LB 289. Finally, only motor vehicle license holders are permitted to drive them, they must be insured and licensed.

What is in the bill is a $75 fee intended as a way to collect a road tax that would normally be collected through the gasoline pump. That provision was the focus of my testimony.

Testimony on LB 289

February 15, 2010

Bill Moore, Publisher
EV World.Com
805 Leprechaun Lane
Papillion, Nebraska

Madame chairman and honorable committee members, my name is Bill Moore. I am the founder and publisher of EV, a web-based publication covering sustainable mobility since 1998. I live in Papillion, Nebraska and have not financial interest in the passage of this bill.

I want to thank you for permitting me to address you on LB 289, a bill that would, among other things, permit neighborhood electric vehicles access to public roads in Nebraska with speed limits of 35 mph or less. I am pleased that this committee is again considering this bill. I sincerely believe that its passage will send an important signal to both the citizens of Nebraska, our public utilities and electric cooperatives, as well as the automotive industry that we are serious about doing our part to reduce the state's dependence on petroleum and the economic, geopolitical and environmental costs associated with that dependence.

To illustrate what I mean, since 1970 the United States has paid $5.5 Trillion dollars for imported petroleum products. In 2009, the nation imported 4.2 billion barrels of petroleum products according to the Energy Information Agency. Assuming an average per barrel price of $60, this equates to a national oil import bill of $252 billion. Crude oil prices are now hovering in the $90-100 price range, and gasoline is now averaging in the $3.20 a gallon range. A shift away from petroleum to fuel our personal vehicles not only improves our balance of trade, but keeps revenue circulating within the state, helping drive our local economy.

Now the small numbers of vehicles covered in LB 289 are not likely to make a significant contribution to reducing oil imports, but they can help reduce the number of short trips by conventional cars and trucks. Importantly, they can also introduce more Nebraskans to the concept of electrically-propelled vehicles. They will also provide a mobility alternative for those who may be looking for such an alternative, including the older members of our communities. Businesses may find them a credible economic alternative for delivery services, employee transport, security and even vending, at least for significant parts of the year. Dealers and the state will also benefit for the added revenue opportunities they are likely to generate.

While I am completely in favor of the bill as currently devised, I do have my reservations about assessing low speed vehicles at the same rate as more conventional motor vehicles, be they hybrids, plug-in hybrids, all-electric, or vehicles powered by alternative energy sources. Madame chairman, honorable senators, we appreciate the fact that such vehicles need to pay their fair share of road taxes, which are generally levied through the current 26.8¢ gasoline tax. Some simple math suggests that the average automobile driver pays just under $150 a year in such taxes to the state. Truck owners pay more due to their lower fuel efficiency. As federal efficiency standards make all motor vehicles more efficient, the amount of tax revenues to the state and federal government will fall unless steps are taken to have said taxes keep pace with improvements in efficiency.

Permit me to share an example with you. The U.S. EPA estimates that the average automobile has a fuel efficiency equivalent to just over 22 miles per gallon. Light trucks are rated between 17-18 mpg. Chevrolet just introduced the new Cruze with a rated fuel economy of 42 mpg, and it isn't even a hybrid. This is nearly twice the fuel efficiency of the average automobile, which means that unless the owner drives twice as many miles, they will be purchasing less gasoline. This clearly represents a problem for the state, which has the same number of roads to maintain, not to mention improve and expand as population grows.

LB 289 proposes to introduce an annual alternative fuel fee of $75, which if applied to vehicles like the Chevy Cruze or the Toyota Prius makes imminent and fare sense. My own calculations suggest that these vehicles, driven 12,000 annually, will pay, because of their improved fuel efficiency only around $75 in state motor fuel taxes. Collecting an additional $75 would bring them to parity with taxes paid by less fuel efficient vehicles. The challenge comes when attempting to apply the fee to vehicles like the Chevy Volt or Nissan LEAF, both of which will eventually see sales in Nebraska starting around 2012. While the Volt uses gasoline, GM envisions that most of its miles will be driven on electric power, largely avoiding the necessity of refueling with gasoline for weeks or even months. [See attached EPA mileage labels for both vehicles]. In the LEAF's case, it has no need for gasoline, so no taxes can be collected through the pump. While at some point it will be feasible to do this through the owners electric power bill, both technology and regulations need first to be developed to make this feasible. From my personal perspective, a $75 fee probably isn't sufficient to bring these vehicles to parity with their non-electric counterparts. Two states, Oregon and Washington, are also considering legislation to address this issue. Washington state is proposing a flat $100 annual fee on vehicles like the LEAF and Volt. Oregon is proposing a 1.2¢ per mile assessment, verified by GPS tracking data and also paid annually. Assuming the 12,000 miles annual average, Oregon's 1.2¢ roughly equates to the same amount of tax paid by a motorist driving a non-electric vehicle.

The challenge faced by the legislatures in all three states is to balance the need to make sure electric vehicle drivers pay their fare share of road taxes, while also not stifling the introduction of that technology, which in the longer view actually will help stimulate the economy by keeping more revenue circulating in the state instead of being sent out of the country. $3.20 cents not spent on a gallon of gasoline instead can be spent on groceries, clothing, or entertainment. How to structure legislation to accomplish both means will require creative thinking. For example, one approach might be the offering other incentives such as free parking, discounted electric charging rates, reduced vehicle taxes. All of these have been implemented elsewhere in the US and outside the country.

Towards that end, madame chairman, honorable committee members, I urge you consider NOT charging neighborhood vehicles the $75 fee. I have researched this matter and learned that most NEVs travel no more than 1,200-1,500 miles annually. That is equivalent to charging their owners nearly five times the rate of a Toyota Prius or Cadillac Escalade, vehicles I would argue place greater physical stresses on our system of roads. If the committee does believe that it should charge a fee, may I respectfully suggest it be more on parity with their larger counterparts. For example, a 1.2¢ per mile fee for 1,500 miles equates to $15 annually, a fee that I consider both appropriate and fair.

Finally, I urge you to carefully consider how you structure fees so that they equitably spread the burden of keeping up our road infrastructure while encouraging the shift away from imported petroleum to locally-generated energy. LB 289 is a good bill. I think it can be fine tuned to be even better.

Thank you, Madame Chairman.

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