SALT LAKE CITY — The way alternative fuel vehicles could be tapped to address the Wasatch Front's air pollution problem not only presents complex questions in the arena of how to pay for it, but also poses a conundrum when it comes to public policy ramifications.
Utah lawmakers were puzzling over the twin challenges in an interim meeting of the Public Utilities and Technology Committee Wednesday after hearing a report delivered by Ron Allen, chairman of the Public Services Commission.
The big questions to ponder during the hearing were how to get more of the alternative energy vehicles on the road, more refueling or charging station options for motorists and lastly, the equitable way to pay for it all.
Such a dynamic in the context of the Wasatch Front's dirty air — dubbed the worst in the nation at one point last winter during a notorious inversion — is a lawmaker's political no-brainer given the bad press the issue has been causing for the state.
"It is apparent to me we have a pollution problem and we are dependent on foreign oil," said Sen. Stuart Adams, R-Layton, pointing out that since the majority of that problem derives from a tailpipe, that is the logical target to go after.
"Other than pushing it off onto someone else, the question becomes who is going to step up and pay for it," he said.
Last year, Adams sponsored and helped pass SB275, which directed the Public Service Commission to initiate a study of alternative fuel vehicles in the context of developing more infrastructure, what role utilities and gas companies should play, what funding mechanisms could be tapped and what were the most effective ways to get over any hurdles in the way.
During a series of hearings and a public comment period, the commission heard strong sentiment voiced that the law unfairly gives the advantage to Questar, by establishing a way for it to play in the marketplace with smaller providers.
The bill specifically allows a $5 million investment by a "gas corporation" in natural gas refueling stations and infrastructure because it is within the public interest and allows for "cost recovery" of a portion of that money.
Allen, a former state senator who now chairs the commission, outlined some of the concerns in the committee meeting such as those voiced by Clean Energy.
In both written testimony and comments delivered at the commission's public hearing, the company indicated it has more than 425 natural gas refueling stations nationwide but it has not come into Utah because it said the market is unfair. SB275, it said, gives a monopoly advantage to Questar that will further drive any small competitors away.
"We are hearing from the private sector they would like to be more in the ballgame," Allen said.
Low-income, consumer and senior advocates also weighed in on the fear that any development of alternative fuel vehicle infrastructure would come in the guise of a hidden tax or cloaked in the form of utility rate increase, Allen said, stressing that the commission has a commitment to transparency.
Many states have taken that tactic to expand the infrastructure, pinning it to the cost of a monthly utility bill. With Utah ratepayers paying much less than many states out there, Allen said he wants to keep those costs low. One of his recommendations emphasized that utility rates remain free of costs not associated with the delivery of service.
Some advocates warned, too, that throwing everything at compressed natural gas is not the only alternative, and that the latest in clean-burning diesel technology on heavy duty vehicles outperforms compressed natural gas.
Electric vehicles should not be ignored because they are cleaner than natural gas, too, said Kathy Van Damme of the Wasatch Clean Air Coalition, and a member of the Utah Air Quality Board.
"As we are talking about paradigms, one of the paradigm shifts that would be worthwhile to examine is that natural gas is automatically the best choice for clean air."
Companies and motorists urged lawmakers to instill parity in state tax incentives for purchases of compressed natural gas vehicles and electric vehicles, which stand at $2,500 compared to $605.
Allen said Enterprise Rental Car stressed that obstacles to adopting an electric vehicle fleet include a fear of lack of charging stations and conversion costs.
And while the transformation of large fleets to all natural gas might achieve a big pollution bang for the buck, one Summit County official said it could not happen because so few refueling options exist now, Allen said.
In his presentation to the committee, Allen outlined a number of recommendations for lawmakers to consider, including retooling the law to make it more clear when it comes to the $5 million fund, considering natural gas incentives for the transition of large fleets and specific options to encourage the development of the electric vehicle charging infrastructure. It also needs to be clear that if someone sells electricity to be used in a recharging station, they will not be regulated like a utility, Allen said.
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