You asked if Connecticut needs to obtain a waiver of the federal Energy Policy Act (EPAct) to purchase gasoline-electric hybrid vehicles for its state motor vehicle fleet. You noted that New York is purchasing hybrids without obtaining such a waiver.

SUMMARY

Neither Connecticut nor New York needs a waiver to purchase up to a certain number of hybrid vehicles for their fleets. Federal law requires that 75% of passenger cars and other light duty vehicles bought for state fleets be alternatively fueled vehicles (AFVs). Gasoline-electric hybrid vehicles (HEVs) currently do not count as AFVs.

Both New York and Connecticut are in compliance with the federal law under the 75% option. Neither state needs a waiver of the EPAct 75% requirement to purchase more HEVs as long as the HEVs do not comprise more than 25% of the vehicles the state purchases annually. States can also purchase hybrid vehicles not subject to the federal law. In practice, the actual number of hybrids purchased generally accounts for less than 25% of the total fleet, because available HEV models do not meet the state's vehicle needs.

States also may also meet EPAct's requirements through an alternative compliance waiver. To do this, a state must show that its alternative plan will save at least the same amount of gasoline the state would have saved if all its AFVs used alternative fuels only. A July 2007 Department of Administrative Services (DAS) report (attached) recommends against the state choosing this option in the near future, saying that it is not now possible to develop a plan to reduce gasoline consumption by the required amount.

In 2001, New York Gov. Pataki issued Executive Order 111, requiring state agencies and other affected entities to buy gradually increasing percentages of AFVs when they purchase new vehicles. By 2010, all the new vehicles they purchase (with some exceptions) must be AFVs. Under the governor's executive order, and unlike EPAct, HEVs count as AFVs.

EPAct'S ALTERNATIVE FUEL REQUIREMENTS

EPAct requires certain fleets to acquire AFVs. (These are called covered fleets. ) State fleets must comply if (1) the fleet has 50 or more light-duty vehicles (vehicles that have less than an 8,500-pound gross vehicle weight rating) and (2) at least 20 of these vehicles are primarily used within a single metropolitan area.

Covered fleets must acquire a certain percentage of AFVs each model year when adding new vehicles to their fleets. As of model year 2001, AFV acquisitions must be 75% of new light-duty vehicles for state fleets. A vehicle is considered an AFV if it can run on:

1. methanol, ethanol, and other alcohols;

2. blends of 85% or more of alcohol with gasoline;

3. natural gas and liquid fuels domestically produced from natural gas;

4. liquefied petroleum gas (propane);

5. coal-derived liquid fuels;

6. hydrogen; or

7. electricity.

Under current law, a vehicle that can run on a blend of 85% ethanol and 15% gasoline (E85) counts as an AFV, even it runs on gasoline in practice. Conversely, HEVs currently do not count as AFVs, although there have been several proposals to amend the law to count them.

Certain state vehicles are not subject to these requirements, including:

1. emergency and law enforcement vehicles,

2. off-road vehicles, and

3. vehicles parked at private residences when not in use.

States may comply with AFV acquisition requirements by acquiring new or used AFVs, converting conventional vehicles to use alternative fuels, using credits they have earned by exceeding the requirements in prior years, or purchasing credits from other covered fleets. (Each credit allows a state to get EPAct credit for a vehicle that would not otherwise meet EPAct requirements. ) States may also earn credits by purchasing fuel with 20% biodiesel (B20) and using this fuel in their fleets. States can obtain exemptions from these requirements if the AFVs that meet their business needs are not available or if alternative fuel supplies are not available.

The Department of Energy can conduct investigations to enforce these requirements. Further information about the federal law is available at http: //www1. eere. energy. gov/vehiclesandfuels/epact/state/index. html, and in OLR Report 2007-R-0145 (attached).

STATE COMPLIANCE WITH FEDERAL REQUIREMENTS

The vast majority of light-duty vehicles owned by the state were acquired by the Department of Administrative Services (DAS), which purchases vehicles and in effect leases them to other agencies. As of July 2007, 1,740 of its approximately 4,200 vehicles (41% of the fleet) were flex fuel vehicles capable of running on gasoline or ethanol (E85); 524 (12%) operated on compressed natural gas (CNG) and gasoline; 267 (6%) were HEVs; and one used natural gas only.

The only other agency that owns a substantial fleet is the Department of Transportation (DOT). Most of its fleet consists of trucks and other heavy duty vehicles not subject to EPAct's requirements. However, approximately 400 of DOT's 1,400 vehicles are pick-up trucks, and DOT also has a handful of passenger vehicles. DOT currently complies with the EPAct requirements. In recent years, all of the pick-up trucks it has purchased have been flexible fueled. In addition, since 2000, DOT has made extensive use of B20 in its light and heavy duty vehicles, and earned credits under EPAct.

DAS fleet operations director Tom Yuhas says DAS's first priority is to continue complying with the EPAct requirements. The department then plans to buy as many hybrids as it can afford, and that meet the needs of the state fleet.

Because up to 25% of new vehicle purchases do not have to meet EPAct requirements, and the state buys between 600 and 800 vehicles a year, theoretically the state can buy 150 to 200 hybrid vehicles and still comply with EPAct. In addition, according to Yuhas, the state also has about 80 credits, which DAS can use to buy vehicles, such as HEVs, that would not otherwise meet EPAct requirements.

But Yuhas points out that actual vehicle purchases depend on the amount of money available and the state's needs. For example, the state might need to purchase a number of light-duty pick up trucks, for which there are no HEV models. In that case, a substantial portion of non-EPAct purchases could not be HEVs.

According to the recent DAS study, the state does not expect to acquire more than 150 such vehicles a year for the near future because of the limited availability of suitable hybrids.

NEW YORK'S EXECUTIVE ORDER 111

Gov. Pataki issued Executive Order 111 (EO 111) in 2001. Among other things, it required, by 2005, that at least half of new light-duty vehicles acquired by each state agency and affected entity be AFVs. Annual AFV purchases are to increase by 10% in each successive year until 2010, when all new light-duty vehicles purchased (except for specialty, police and emergency vehicles) must be AFVs. A key difference between EO 111 and EPAct is that under EO 111, HEVs count as AFVs.

Another difference is that EO 111's requirements extend beyond the fleets EPAct covers. It affects all New York state entities over which the governor has executive authority, as well as all public benefit corporations and public authorities, the heads of which the governor appoints. EO 111's requirements apply regardless of the number of vehicles in a fleet or their location.

According to the U. S. Department of Energy, New York had 162 HEVs as of December 9, 2004. The state fleet had a total of 13,043 light-duty vehicles, of which 4,325 were AFVs. The 162 hybrids therefore comprised 3. 7% of total AFVs, and 1. 2% of the total fleet. (The remaining light-duty AFVs in the New York state fleet as of that date included 2,217 CNG vehicles; 924 flex fuel (ethanol) vehicles; 760 neighborhood electric vehicles (NEVs); 148 propane-powered vehicles; 101 electric vehicles, 12 vehicles that operated on methanol; and one hydrogen fuel cell vehicle. (NEVs, battery-powered vehicles usually limited to roads with posted speed limits of 35 mph or less, also do not count as AFVs under EPAct. )

PF: ro