By Mike Antich

On Feb. 17, President Obama signed into law the American Recovery and Reinvestment Act. The $789 billion economic stimulus legislation is comprised of $507 billion in spending programs and $282 billion in tax relief to jumpstart an economic recovery. Included in the $507 billion in spending is more than $150 billion in public works projects for transportation, energy, and technology. This includes significant new funding for fleets, such as $300 million for diesel emission retrofit grants; $300 million to establish a grant program through the Department of Energy’s Clean Cities Program; and $300 million for acquisition of energy-efficient vehicles by the federal fleet. The entire text of the American Recovery and Reinvestment Act can be found at www.recovery.gov.

$300 Million in Additional Funding for the Diesel Emissions Reduction Act
The American Recovery and Reinvestment Act makes $300 million available to retrofit diesel fleets with cleaner-burning engines. This $300 million is additional funding for the Diesel Emissions Reduction Act (DERA), administered by the Environmental Protection Agency. This new funding represents a six-fold increase from last year’s $49.2 million funding level for DERA. Private sector applicants cannot apply directly, but can do so in partnership with state and local governments or a non-governmental organization.

“This funding represents a bold new investment in clean-diesel technology that will be good for our economy and our environment,” said Allen Schaeffer, executive director of the Diesel Technology Forum. “Now the challenge will be to help applicants prepare good project proposals for what will likely be an expedited application process. Applicants for these funds should move quickly to develop an application since time is of the essence, with EPA’s application process only open for a period of 30 days.”

According to NAFA, the EPA expects to issue competitive announcements for DERA funds in late February. More information is available at www.epa.gov/otaq/diesel/grantfund.htm. EPA expects a 30-day application period for all competitive announcements.

The Diesel Technology Forum also provides online resources to aid potential grant applicants. These include:

• A webinar on the DERA program on “How to Prepare a Competitive Retrofit Proposal.” In the webinar, three EPA representatives discuss how proposals are evaluated for the DERA program and offer advice to applicants. The webinar also includes two case studies from recipients of last year’s funding. A recorded version of the webinar and all presentations are posted on the Diesel Technology Forum Web site, www.dieselforum.org/webinars. The site will also post answers to questions raised by attendees.

• The Diesel Technology Forum also provides access to a sample application provided by the EPA. Other additional materials about DERA are available on the EPA’s National Clean Diesel Campaign Web site, www.epa.gov/cleandiesel.

• The Diesel Technology Forum provides a white paper entitled “Retrofitting America’s Diesel Engines: A Guide to Cleaner Air Through Cleaner Diesel.” The white paper describes various retrofit technologies and implementation criteria that should be considered.
DERA funding is available for upgrading both on- and off-road diesel projects employing one of the five options available to reduce emissions. These are also known as the 5 Rs: refuel (using cleaner diesel fuel); rebuild (engine upgrades); repower (new engine); replace (new equipment); and retrofit (emission filters/catalysts).

Last January, more than 300 industry, environmental, and governmental organizations signed a letter to congressional leaders requesting funding for DERA, citing more than $116 million in unfunded projects after the program’s first year. To date, only $49.2 million has been provided for DERA. The newly funded additional $300 million will substantially help reduce emissions from the nation’s estimated 11 million diesel engines. DERA was originally enacted as part of the Energy Policy Act (EPAct) of 2005 and authorized for $1 billion over five years. The program also enjoys support from both Republicans and Democrats, as evidenced by its original passage by a vote of 92 to 1 as part of the EPAct 2005.

According to independent research done by Keybridge Associates, DERA is likely to generate approximately $6 of increased economic output for every $1 of federal funding. This economic impact is likely to be greatest in the auto parts manufacturing and heavy-duty truck manufacturing sectors.

Plug-In Hybrid Grant Program
The American Recovery and Reinvestment Act also provides $300 million to establish a grant program through the DOE Clean Cities Program to encourage the use of plug-in electric drive vehicles or other emerging electric vehicle technologies. This grant program may provide up to 30 geographically dispersed project grants. Grant recipients include state governments, local governments, metropolitan transportation authorities, air pollution control districts, and private or nonprofit entities. The grants may be used for the acquisition of alternative-fuel vehicles, fuel cell vehi-cles, or hybrid vehicles, including buses for public transportation and ground support vehicles at public airports. The installation or acquisition of infrastructure necessary to directly support an alternative-fuel vehicle, fuel cell vehicle, or hybrid vehicle project funded by the grant is also eligible.

Energy-Efficient Vehicles for Federal Fleet
New funds are available for federal agencies to purchase plug-in hybrid vehicles. Each vehicle purchased must have a higher fuel economy, as measured by EPA, than the vehicle being re-placed. The overall government-purchased vehicles must have at least a 10-percent greater fuel economy than the vehicles being replaced. The text of the legislation reads: “For capital expenditures and necessary expenses of acquiring motor vehicles with higher fuel economy, including: hybrid vehicles; electric vehicles, and commercially available, plug-in hybrid vehicles, $300,000,0000 to remain available until September 30, 2011.”

Energy Efficiency & Conservation Block Grants
The stimulus legislation also includes $3.2 billion for the Energy Efficiency and Conservation Block Grant (EECBG) program; $2.8 billion will be distributed by formula to eligible cities (35,000 or greater in population) and counties (200,000 or greater in population), and $400 million will be available in competitive grants through the U.S. Department of Energy. This funding will help local governments implement strategies to reduce fossil-fuel emissions and total energy use. A fact sheet on the EECBG pro-gram recently prepared by the U.S. Department of Energy is available at: www.climatecommunities.us/documents/eecbg_program_alert.pdf

Win-Win Situation
This funding is a welcome relief to many fleet organizations operating under extremely constrained budgets. Not only will these programs assist in making up for budgetary shortfalls, they will also help assist fleets in meeting green fleet initiatives.

Let me know what you think.

mike.antich@bobit.com