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Accelerating zero-emission mass transit one EV bus order at a time

During the last ten years the United States has borne witness to a patchwork of federal transportation funding measures.  But on December 4, 2015, President Obama signed into law the Fixing America’s Surface Transportation (FAST) Act, crystallizing a long-term investment future for manufacturers, infrastructure providers and public transit agencies alike. Backed by strong bipartisan support, the $305 billion surface transportation bill marks the first multi-year, fully-funded bill of its kind in over a decade, which sets the historical legislation in stark relief against years of inadequate funding.

The law is of particular importance to the emerging zero-emission bus industry.  Transit agencies will see an 89 percent increase of current funding levels for the Bus and Bus Facilities Program and bolstered investment in the Low or No Emission Vehicle Deployment (LoNo) Program. These changes firmly underscore the federal government’s growing commitment, supported by both sides of the aisle, to reduce emissions through the accelerated adoption of cleaner, more efficient alternative fuel bus transit.

{mosads}In fiscal years 2013-2014, the FTA’s LoNo program received 50 project proposals, which resulted in over $200 million in requested funds.  These proposals exceeded the $55 million of combined available federal resources allocated to the program by nearly four times.  And last fiscal year, 2015, the FTA received even more proposals for only $22.5 million in funding.  Under the FAST Act, the LoNo program has been integrated into the Bus and Bus Facilities Program, which will allow the initiative’s success and popularity to grow further.  In recognition of increased market demand for LoNo buses and to further incentivize their deployment, the FAST Act increases LoNo funding by 144 percent to $55 million annually over five consecutive years, for a total of $275 million. And now that this funding will come from the Highway Trust Fund, it will be more certain and predictable.  Doubling the LoNo program is unequivocal proof that Congress believes the program is serving an indispensable role in accelerating zero-emission mass transit. 

The FAST Act has strengthened the LoNo program in a variety of other ways as well: it expands eligibility to all transit agencies regardless of air quality status, requires the FTA to promptly award LoNo grants within the same fiscal year that they are requested and eliminates certain regulatory requirements so that transit agencies can now enter into leasing arrangements for vehicles or batteries.  The ability of an agency to lease batteries will reduce costs by as much as $100K per zero-emission electric bus.  And unlike any surface transportation bill to date, the FAST Act takes a novel approach to authorize several innovative procurement practices.  Among other innovations, it allows states to establish cooperative rolling stock procurements, thus enabling any transit agency to purchase buses that a lead transit authority has ordered.  By opening up this process, and shortening the procurement cycle, the FAST Act will enable the industry to scale volume production, reduce procurement costs and ultimately accelerate LoNo bus adoption and ensure that LoNo buses are on the road faster than ever before. 

Lastly, the FAST Act enhances state transportation programs.  For example, California transit agencies can take advantage of the state’s existing Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP) and still lease batteries through the FAST Act, dramatically reducing upfront capital costs. The expected 12-year Total Cost of Ownership of owning, operating and maintaining an EV bus is now more economically compelling than any other technology.  Alongside the industry’s technological advancements, electric buses have become a compelling financial opportunity that is even more incontrovertible thanks in part to the FAST Act—incentivizing electric transportation options from coast to coast­.

To date American electric buses have logged millions of miles of revenue service, in large part because of the state and federal predecessor programs to the LoNo program.  Municipal agencies in California, Kentucky and elsewhere are placing their second or third orders of zero-emission buses after witnessing the economic and technological viability of these vehicles firsthand, and it is these agencies that will continue to drive a competitive market and push manufacturers to innovate.  The FAST Act will play a critical role in accelerating continued adoption of advanced technology transit vehicles and improving heavy-duty mobility solutions throughout the United States; indeed, the bill is a major victory not only for public transportation, but the transportation sector as a whole, creating funding stability and propelling the EV bus industry toward a critical adoption tipping point.

McCarthy is the vice president of Government Relations and general counsel of Proterra Inc., the leading U.S. manufacturer of zero-emission, all-electric transit buses.  


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