BILL ANALYSIS Ó
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Wieckowski, Chair
2015 - 2016 Regular
Bill No: AB 904
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|Author: |Perea |
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|Version: |7/14/2015 |Hearing | 7/15/2015 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Joanne Roy |
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SUBJECT: Air Quality Improvement Program: Clean Reused Vehicle
Rebate Project.
ANALYSIS:
Existing law:
1) Creates the Air Quality Improvement Program (AQIP),
administered by California Air Resources Board (ARB), in
consultation with local air districts, to provide competitive
grants to fund projects to reduce criteria air pollutants,
improve air quality, and support research to improve the air
quality impacts of alternative fuels and vehicles, vessels, and
equipment technologies. (Health and Safety Code (HSC) §44274).
2) Creates the Clean Vehicle Rebate Program (CVRP), within the
AQIP, to promote accelerated widespread commercialization of
zero-emission vehicles (ZEVs) by providing rebates of up to
$5,000 for the purchase or lease of per eligible light-duty
vehicle. This program was not created through statute, but
instead was developed and initiated by ARB pursuant to ARB's
existing statutory authority through AQIP.
3) Creates the Enhanced Fleet Modernization Subaccount to
implement the Enhanced Fleet Modernization Program (EFMP)
developed by ARB, in consultation with the Bureau of Automotive
Repair, that allows for the voluntary retirement of
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high-polluting passenger vehicles and light-duty and
medium-duty trucks. (HSC §44125).
4) Under the California Alternative and Renewable Fuel, Vehicle
Technology, Clean Air, and Carbon Reduction Act of 2007,
requires the State Energy Resources Conservation and
Development Commission (commonly referred to as the California
Energy Commission) (CEC) to implement the Alternative and
Renewable Fuels and Vehicle Technology Program to fund measures
to develop and deploy technologies and alternative and
renewable fuels in the marketplace to help attain the state's
climate change policies. (HSC §43865 et seq.).
5) Creates the Advanced Clean Cars Program (ACCP) administered by
ARB that sets forth air quality and emissions reductions
requirements for certain vehicle models and assures the
development of certain clean air vehicles.
6) Creates the Charge Ahead Initiative, which outlines the vision
of placing one million electric cars, trucks, and buses on
California roadways and directs ARB to draft a financial plan
to meet that goal and ensure that disadvantaged communities can
participate. (HSC §44258 et seq.)
7) Establishes the Greenhouse Gas Reduction Fund (GGRF) in the
State Treasury, requires all moneys, except for fines and
penalties, collected pursuant to a market-based mechanism be
deposited in the fund and requires the Department of Finance,
in consultation with ARB and any other relevant state agency,
to develop, as specified, a three-year investment plan for the
moneys deposited in the GGRF. (Government Code §16428.8)
8) Prohibits the state from approving allocations for a measure or
program using GGRF moneys except after determining that the use
of those moneys furthers the regulatory purposes of AB 32, and
requires moneys from the GGRF be used to facilitate the
achievement of reductions of GHG emissions in California. (HSC
§39712)
9) Defines "used vehicle" as a vehicle that has been sold, or has
been registered with the Department of Motor Vehicles, or has
been sold and operated upon the highways, or has been
registered with the appropriate agency of authority, of any
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state, District of Columbia, territory or possession of the
United States or foreign state, province, or manufacturer in
the sales or distribution work of such manufacturer. (Vehicle
Code §665).
This bill:
1) Requires ARB to establish a Clean Reused Vehicle Rebate Project
(CRVRP) by July 1, 2017, to provide an applicant with any of
the following:
a) A rebate or other incentive of up to $1,800 for
acquisition of an eligible used vehicle from a licensed
dealer. Restricts the rebate availability to counties in
which less than 2% of the total CRVRP rebates have been
issued, or counties which are located in air districts that
have been designated by ARB as a state nonattainment area
and does not meet National Ambient Air Quality Standards.
b) A rebate or other incentive of an unspecified dollar
amount for the replacement or refurbishment of a battery and
related components for an eligible used vehicle, for an
extended warranty for the battery and related components, or
for both.
c) A rebate or other incentive of an unspecified dollar
amount for an extended service warranty to cover unexpected
vehicle repairs not covered by the manufacturer's warranty
related to unique problems in eligible used vehicles.
2) Provides that "eligible used vehicle" only includes the same
types of vehicles that are eligible for a rebate under CVRP.
3) Limits rebates or other incentives issued under this program to
one per vehicle.
4) Limits rebates or other incentives issued under this program to
low- and moderate-income consumers living in disadvantaged
communities.
5) Requires ARB to coordinate CRVRP with CVRP, EFMP, and the
Charge Ahead Initiative, as follows:
a) Coordinate CRVRP eligibility with EFMP eligibility.
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b) Ensure appropriate outreach and targeting to low- and
moderate-income communities to encourage participation.
c) Expand financing mechanisms, including, but not limited
to, a loan or loan-loss reserve credit enhancement program
to increase consumer access to zero-emission and
near-zero-emission financing and leasing options, to help
increase participation rates among low- and moderate-income
consumers.
6) Requires ARB to establish safeguards for CRVRP to prevent
fraudulent activity by sellers and acquirers of eligible used
vehicles and practices that could prevent intended CRVRP
recipients from benefiting from this program.
Background
1) Batteries: General. One of the key elements of any electric
vehicle is its battery. A battery is an electrochemical energy
storage device that can release an electrical charge when
needed. It generally consists of an anode, a cathode, and an
electrolyte (separator). Batteries may be made up of one or
more cells, which can be connected together (in series) to
provide a higher voltage. For example, a typical 12-volt car
battery is made up of six cells connected together internally
and a battery pack for a battery electric vehicle ( ) may have
hundreds of individual cells.
Battery characteristics that are particularly important for
automotive use include their energy density and power density.
Energy density is a measure of how much energy a battery can
hold. The higher the energy density, the longer it will last
before needing to be recharged. Power is the rate at which
energy is used. Power density is the measure of how much power
a battery can deliver on demand - how quickly it can release
energy and conversely, how quickly it can be recharged.
Battery types are typically identified by the materials that make
up one or more of components of the battery. Common types of
automotive batteries include lead-acid, which are used in
conventional cars; nickel-metal hydride, which are commonly
used in hybrid vehicles; lithium-ion, which are becoming the
battery of choice for plug-in hybrids, battery electric
vehicles, and some conventional hybrids; lithium polymer, which
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can be found in some hybrid vehicles; and, lithium iron
phosphate, which are now being used in hybrids and BEVs.
The estimated price of a replacement battery to a consumer
generally ranges from $3,000 to $6,000, but the price is
dependent on the manufacturer. On the high end, a battery can
cost approximately $12,000.
2) Batteries: longevity and warranties. If a battery fails, the
entire battery must be replaced. Currently, there is just one
manufacturer (BMW), which is set up to do modular replacement
of a battery (for the BMW i3), meaning the entire battery would
not need to be replaced. However, this type of modular
replacement for BEV batteries is in its infancy.
Several manufacturers of plug-in vehicles offer 9-year/100,000
mile battery warranties. The National Renewable Energy
Laboratory states that today's batteries may last 12 to 15
years in moderate climates and eight to 12 years in extreme
climates.
Although manufacturers have not published pricing for replacement
batteries, some are offering extended warranty programs with
monthly fees. If a battery needs to be replaced outside the
warranty, it may be a significant expense.
3) Air Quality Improvement Program (AQIP). The AQIP, which was
established by the California Alternative and Renewable Fuel,
Vehicle Technology, Clean Air, and Carbon Reduction Act of 2007
(AB 118 (Nuñez, Chapter 750, Statutes of 2007), is a voluntary
incentive program administered by ARB to finance, through
grants, revolving loans, or loan guarantees, projects that
improve air quality, promote research on the air quality
impacts of alternative fuels and advanced technology vehicles,
and support work force training.
AQIP is funded through, among other things, surcharges on vehicle
registration fees and a portion of the Smog Abatement Fee (paid
to register vehicles less than six model years old and
therefore exempt from smog check). AQIP also receives a
significant amount of Greenhouse Gas Reduction Fund (GGRF)
moneys.
4) Clean Vehicle Rebate Project (CVRP). CVRP, which is part of
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AQIP, is funded by ARB and administered by the Center for
Sustainable Energy, in order to promote the production and use
of zero-emission vehicles, including electric, plug-in hybrid
electric and fuel cell vehicles. CVRP enables the purchaser or
lessee of an eligible vehicle to receive a rebate. A consumer
can apply for a rebate within 18 months of purchasing or
leasing an eligible vehicle. The consumer must retain
ownership of the vehicle in California for at least 30
consecutive months after the purchase or lease date or
reimburse ARB for part of or the entire rebate amount. Rebates
are distributed on a first-come, first-served basis and issued
within 90 days of application approval.
CVRP provides a rebate of up to $5,000 for purchasing or leasing a
new zero-emission vehicle or plug-in hybrid electric vehicle.
Specifically, a consumer may obtain a $5,000 rebate for a
hydrogen fuel-cell vehicle; a $2,500 rebate for a
zero-emission, battery electric vehicle; a $1,500 voucher for a
plug-in hybrid electric vehicle; or, a $900 rebate for a
neighborhood electric vehicle or a zero-emission motorcycle.
As of June 23, 2015, CVRP has issued 109,660 rebates ($231.8M)
since March 2010. There is no cap on the number of rebates
that may be issued, but rebates are subject to funding
availability and the program has more than once been forced to
stop issuing rebates and create a waiting list due to funds
running out.
5) Public Fleet Pilot Project. Administered by CSE for ARB, the
Public Fleet Pilot Project offers up to $15,000 in rebates for
the purchase of new, eligible zero-emission and plug-in hybrid
light-duty vehicles. The project replaces standard CVRP
rebates with increased incentives for public agencies operating
in the state's disadvantaged communities.
Up to $2.877 million in funding from GGRF is available for
California public entities fleets located in or serving
disadvantaged communities. The Public Fleet Pilot Project
benefits disadvantaged communities by providing immediate air
pollution emission reductions while stimulating local
deployment of the next generation of zero-emission and plug-in
hybrid electric light-duty vehicles. The Public Fleet Pilot
Project is administered as a set-aside within CVRP.
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6) Enhanced Fleet Modernization Program (EFMP).
a) Plus-Up Program. ARB is currently implementing the new
EFMP Plus-Up Program (Plus-Up) in the San Joaquin and South
Coast air districts. Plus-Up provides additional incentives
above and beyond EFMP base incentives for individuals in
disadvantaged communities who retire high-polluting vehicles
and replace them with used or new hybrid, plug-in hybrid, or
zero-emission vehicles. Eligible participants can receive
incentives ranging from $1,500 to $5,000, depending on the
vehicle type that is purchased and the income level of the
applicant. The EFMP, Plus-Up, and CVRP rebates can be
"stacked" for a total of up to $12,000.
b) Car scrappage programs: EFMP provides for the voluntary
"retirement" (scrappage) of high-polluting passenger
vehicles and light- and medium-duty trucks. EFMP has a
statewide component and a local component.
Under the statewide component, ARB administers the Consumer
Assistance Program (CAP), in consultation with the Bureau of
Automotive Repair. This program offers a $1,500 voucher to
low-income vehicle owners, or a $1,000 voucher to other
owners, to retire a high-polluting vehicle.
Under the local component, ARB administers a program,
authorized in the San Joaquin Valley and South Coast air
districts, to replace high-polluting vehicles. In addition
to the "retirement" vouchers described above, the local EFMP
program offers a $2,500 "replacement" voucher to low-income
vehicle owners to replace a high-polluting vehicle by either
purchasing a vehicle eight years old or newer, or using the
voucher toward public transit.
7) Charge Ahead Initiative. SB 1275 (de León, Chapter 530,
Statutes of 2014) establishes the Charge Ahead California
Initiative, which outlines a vision of placing 1 million
electric cars, trucks, and buses on California's roads by 2023
and directs ARB to provide incentives to increase the
availability of zero-emission vehicles and near-zero-emission
vehicles, particularly in disadvantaged communities. Pursuant
to SB 1275, ARB's FY 2015-16 Funding Plan includes, among other
programs and actions: a) $163M for CVRP, which includes an
income cap to exclude high-income consumers and higher rebate
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levels for lower income consumers; b) increased investments for
light-duty pilot projects in disadvantaged communities
including $20M to expand air district administered
retire-and-replace pilot programs that help low-income
residents afford the cleanest cars.
Comments
1)Purpose of Bill. According to the author, "AB 904 provides an
opportunity for California to increase access to electric
vehicles for those with the most need. California has some of
the most polluted areas in the country and requires extensive
and immediate transformation for its disadvantaged communities.
This bill will provide an immediate, tangible, and measureable
benefit for low-moderate income Californians who largely
purchase used vehicles in contrast to new ones. In the long run
making electric vehicles accessible to low-moderate income
Californians will speed up technological development and
increase the demand and deployment of electric vehicle
technology in our state. This bill builds consumer confidence
in the market by establishing a battery warranty and encourages
those who may not have the means to take the risk with new
technology to purchase a long term saving investment for their
everyday transportation needs."
2)Existing programs and projects benefitting disadvantaged
communities. According to ARB, several vehicle incentive
programs and projects exist that specifically address
disadvantaged communities, including:
a) EMFP Plus-Up: Promotes advanced technology vehicle
replacements (new or used) for lower-income consumers. ARB
has recently initiated a pilot project under EFMP in the San
Joaquin Valley and greater Los Angeles area to help
low-income individuals and families in disadvantaged
communities (as determined by CalEnviroScreen) to retire
older, polluting vehicles and purchase cleaner and more
fuel-efficient cars. The program provides increasingly
larger cash payments for the lowest-income families to move
up to the very cleanest cars. For example, under this
program, it is possible for a family that meets the income
guidelines to receive up to $12,000 toward the purchase of an
electric vehicle. Eligible vehicles must be less than eight
years old and get 20 mpg or greater, such as a Toyota Prius.
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Plus-Up also allows for recipients to be eligible for
vouchers for public transit passes, between $2,500 and $4,500
in value, depending on income level.
ARB states that Plus-Up is funded Fiscal Year (FY) 2014-15 for
$3 million; and expects to provide $20 million in FY 2015-16
with the intent of expanding the program to other areas in
the state.
Does the Plus-Up Pilot Project, which focuses on providing
individuals and families in disadvantaged communities with
potentially up to $12,000 to purchase cleaner vehicles (that
are less than eight years old), satisfy the goals of this
bill, if not more due to the air emission reductions as well?
b) Public Fleet Incentive Pilot Project: Offers rebates of
up to $15,000 for public fleets to reduce emissions in or
near disadvantaged communities. The project launched in
February 2015; rebates for 86 vehicles totaling $430,000 were
reserved by April 30, 2015. (FY 2015-16: $5M). (See
Background #5 for more detail.)
c) Car Sharing and Mobility Option Pilot Project: Provides
funding to establish advanced technology clean car sharing
fleets in or near disadvantaged communities to offer an
alternate mode of transportation and encourage use of
advanced technology cars. (FY 2015-16: $5M).
d) Financing Assistance Pilot Project: Provides financing
assistance, such as loan loss guarantees for financial
institutions, or through non-profit organizations that are
already lending to lower income consumers, to support
consumers in or near disadvantaged communities in the
purchase of an advanced technology vehicle. (FY 2015-16:
$4M).
e) Agricultural Worker Vanpools in the San Joaquin Valley
Pilot Project: Provides incentives for the purchase of new
eligible zero-emission, plug-in hybrid, and hybrid passenger
vans to turn over the existing fleet or to expand
availability to new riders. Eligibility is limited to
projects that serve disadvantaged community census tracts in
the San Joaquin Valley.
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(FY 2015-16: $3M).
f) Car scrappage programs (See Background #6(b) for more
detail):
i) CAP: Provides consumers with $1,000, and $1,500 for
low-income consumers, to retire a vehicle that meets
certain eligibility guidelines. (FY 2014-15: $23.5M).
ii) EFMP: Retirement-only program: Provides customers
with $1,000, and $1,500 for low-income consumers, for
vehicles that meet certain eligibility guidelines.
Starting July 1, 2015, EFMP will be limited to low-income
consumers, and they will receive $1,500 incentive for
vehicle retirement. (FY 2014-15: $25.9M).
iii) EFMP: Retirement-and-replacement program: Provides
funds to consumers to retire an older vehicle and replace
it with a new, cleaner model. ARB provides grants to the
San Joaquin Valley Air Pollution Control District and South
Coast Air Quality Management District to implement the
program in their jurisdictions. (FY 2014-15: $2.8M)
The several existing programs and projects listed above, as
well as the accompanying tens of millions of dollars of
funding, provide air emission benefits and place cleaner
vehicles in those communities.
Because this bill proposes to add an entirely new program that
is very similar to the ones above, a question arises as to
whether doing so would be considered unnecessary.
3)Coordinate among programs or incorporate within existing
programs? Pursuant to several legislative directives, such as
SB 1275 (de León, Chapter 530, Statutes of 2014), ARB is
currently implementing several programs aimed at helping
low-income consumers and consumers in disadvantaged communities.
AB 904 requires ARB to coordinate the proposed CRVRP with the
CVRP, EFMP, and the Charge Ahead California Initiative.
However, because there appears to be much overlap in these
programs, can the objectives of this bill be met via the several
programs and projects currently in place? Establishing a new
program or project is time consuming and costly; and adding
another one to the fray may result in redundancy and confusion.
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The Committee may wish to consider whether it would be more
prudent, time saving, and cost effective for ARB to incorporate
some of the proposed mechanisms/benefits in this bill such as
extended warranties or replacement of batteries into existing
programs.
4)Is legislation necessary? This bill would establish CRVRP as
part of AQIP. As noted above, CVRP was not created through
statute, but instead was developed and initiated pursuant to
ARB's existing statutory authority under AQIP. This bill
proposes to establish CRVRP as part of AQIP. A question arises
as to whether legislation is necessary to create CRVRP
considering ARB already has existing statutory authority through
AQIP.
5)What is the funding? This bill does not specify a funding
source or amount for the proposed CRVRP, which would be
established as part of AQIP.
a) Funding sources for AQIP. As noted above, AQIP is funded
through, among other things, surcharges on vehicle
registration fees and a portion of the Smog Abatement Fee,
and receives a significant amount of GGRF.
Under AQIP, CVRP is highly subscribed and has more than once
run out of funds midyear and been forced to establish a
waiting list. It is unclear whether a new funding source
would be established for CRVRP. If CRVRP takes from existing
AQIP funds, how would this affect the current programs and
projects, such as CVRP?
b) Potential GGRF? As noted earlier, AQIP receives a
significant amount of GGRF. GGRF investments must facilitate
the achievement of GHG emissions reductions. Considering
this bill does not likely reduce GHG emissions because no
high-polluting cars are required to be retired, it seems
questionable whether the proposed CRVRP would be eligible to
receive GGRF moneys.
6)Potential of double-dipping. This bill provides that an
eligible used vehicle only includes the same vehicles that are
eligible for rebate pursuant to CVRP. According to ARB, 70% to
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75% of vehicles eligible for CVRP rebates have received them.
Considering that approximately three out of four cars eligible
have received the CVRP rebate, this bill may provide another
rebate or incentive for the same vehicle, but without the
environmental benefit of further reducing air pollution.
7)Incentives. This bill provides for incentives to purchase
eligible used clean vehicles. The term "incentive" is very
broad. Common forms of incentives may be either financial or
non-financial. Examples of financial incentives include a
rebate (buyer receives cash after making the purchase), a
voucher (buyer receives what is essentially a coupon to take to
a dealer who will deduct the voucher amount from the cost and
submit to ARB for payment), or a loan with favorable terms.
Non-financial incentives may include HOV lane access, free
charging or free hydrogen fuel, or free/reduced parking costs.
Also, while incentives often target the consumer, incentives are
sometimes structured around the dealer or lending institution,
such as a loan loss guarantee program. Various forms of
incentives have different advantages and disadvantages based on
the type of behavior meant to be encouraged. The types of
incentives intended for this bill is unclear.
8)Fraud. Although this bill requires ARB to establish safeguards
for CRVRP against fraudulent activity, there is concern that
fraud potential with this bill is high. For example, although a
vehicle is limited to one CRVRP rebate or incentive, this bill
could result in unknowing consumers becoming victims of sellers
who may not be honest about whether the vehicle had already
received a CRVRP rebate or other incentive at the time of
purchase. In addition, there is no standard of information for
a consumer or ARB to know the value and price of a used car
because they are dependent on the condition of that particular
vehicle. How is ARB expected to prevent fraud on a used car?
9)How would ARB implement a warranty program? This bill proposes
to establish CRVRP, which would include an extended warranty for
a battery and related components and an extended service
warranty to cover unexpected vehicle repairs. Manufacturers
currently do not have warranty programs for batteries only. ARB
would have to either develop a battery warranty program or work
with the manufacturers to help them develop a battery warranty
program. This would be a completely new program area for ARB.
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a) How long would an extended warranty be? This bill would
provide an applicant an extended service warranty to cover
unexpected vehicle repairs not covered by the manufacturer's
warranty related to unique problems in eligible used
vehicles. Although not included in the bill, parameters on
an extended warranty that should be considered include:
minimum warranty requirements, incentive type (point of sale
rebate, rebate toward warranty purchase for a used advanced
technology vehicle), and minimum warranty coverage in years
and mileage.
b) What should a warranty cover? Car warranties tend to have
limits on what they cover. For example, some may not cover
damage as a result of negligent care or an accident caused by
the owner. Or there may be requirements to maintain a car in
a specified manner in order for a warranty to apply. A
question arises as to whether similar conditions would apply
to the warranties proposed in this bill. Also, what types of
mechanical issues are considered "unique problems"? This
bill is unclear as to what kinds of unique problems would be
covered by a warranty.
10)What are long-term or other costs and considerations to keep in
mind for the clean car owner?
a) What happens after the incentive/warranty ends or does not
cover the cost of repair/replacement? A longer-term
challenge for a clean car owner may be maintenance and repair
of the vehicle over its lifetime. Batteries gradually lose
their maximum charge over time. At a certain point, they
become too weak to power a car. Eventually, it will be
worthwhile to replace the battery to get back the vehicle's
original capabilities. The applicant under this program
would be purchasing a used vehicle, which means that the
battery is already further along in its life at the time of
purchase. As noted earlier, the estimated cost to replace a
battery is generally in the range of $3,000 to $6,000, and if
a battery fails, the entire battery must be replaced. If a
warranty does not cover the cost of replacement or the
warranty has expired, is the cost of replacing the battery
feasible for that purchaser? If not, is it possible that the
owner may get stuck in a situation that they cannot easily
afford to get out of or be left without a working vehicle
entirely?
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b) Other considerations for the clean car owner. Depending
on the type of clean vehicle, a home charging station may be
required. The cost varies for a home charging station based
on the type of charger and location (home vs. multi-dwelling
unit). ARB estimates that for a residential application,
installation costs would range from approximately $1,500 to
$6,000. A charger added to the design of a new structure
would cost much less than retrofitting an older unit that has
old wiring. In addition, as with any electrical appliance,
there are also energy costs and potential maintenance and
repairs of equipment to consider. Another consideration is
whether the vehicle owner lives in a rental - It is possible
the landlord might be reluctant to add a home charging
station on the property. In general, the owner will need to
consider the availability and accessibility of charging
stations in the area in which the vehicle is expected to be
driven.
Additionally, owners would eventually be responsible for the
maintenance, which could include replacing the battery and
beyond the provisions of this bill. Will it be financially
feasible for the owner to maintain a car that requires a
battery that costs thousands of dollars?
If a purchaser in a disadvantaged community must choose between
a used conventional vehicle and used clean vehicle, is it
possible that the purchaser, as well as the environment, may
get more "bang for the buck" by choosing a newer,
conventional vehicle? Plenty of newer, conventional vehicles
exist that are subject to fuel efficiency standards, NOx and
other pollutant criteria standards. For the vehicle
purchaser, is it more prudent to buy a newer, conventional
vehicle that may have a longer lifespan than a clean vehicle;
as well as a battery maintenance cost of $50 as opposed to
thousands of dollars?
11)Could no requirement for the retirement of a polluting vehicle
result in no improvement in air quality? This bill establishes
CRVRP as part of AQIP. Pursuant to AQIP, grants are provided to
fund clean vehicle and equipment projects that reduce criteria
and toxic air pollutants; ARB is directed to evaluate proposed
projects based on potential reduction of criteria or toxic air
pollutants, cost-effectiveness, contribution to regional air
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quality improvement, and ability to promote the use of clean
alternative fuels and vehicle technologies.
Removing the legacy fleet of older, polluting vehicles is what
will make the difference in improving air quality in
disadvantaged communities. This bill does not require a
recipient of a CRVRP benefit to scrap an older, polluting
vehicle in order to receive a rebate or incentive to buy a
clean, reused vehicle. Rather than reducing the number of
polluting cars on the road, is it possible that this bill may
simply add more cars?
For example, if a CRVRP recipient did not own a car previously and
instead used public transit for transportation, would this bill
increase the number of cars in the community, potentially
worsening traffic? Because of an increase in number of cars on
the road, motor vehicles may sit in traffic longer, which in
turn may create more air pollution. Although the individual
vehicle may not create more emissions, it may cause others to do
so.
A question arises as to how much this proposal will improve
environmental quality overall in disadvantaged communities when
the bill does not reduce the number of older, polluting cars.
12) Broader impacts on the environment.
a) From where does the electricity come? Although battery
electric vehicles (EVs) produce zero emissions from the
vehicles themselves, and hybrid electric vehicles and plug-in
hybrid electric vehicles (PHEVs) produce fewer emissions than
vehicles using internal combustion engines alone, there are
emissions produced by, or other environmental impacts
resulting from, the sources of electricity they use. For
example, like internal combustion engines, coal-fired
generating stations emit carbon dioxide, which is a GHG; and
nuclear generating stations produce radioactive waste
products that remain toxic for thousands of years.
The life cycle emissions of an EV or PHEV depend on the source
of electricity used to charge it, which vary by region. In
geographic areas that use relatively low-polluting energy
sources for electricity production, plug-in vehicles
typically have a life cycle emissions advantage over similar
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conventional vehicles that run on gasoline or diesel. In
regions that depend heavily on conventional fossil fuels for
electricity generation, PHEVs and EVs may not demonstrate a
strong life cycle emissions benefit.
A National Academy of Science study from 2013, Alternative
Vehicles and Fuels, states that, while the environmental
costs of an electric vehicle depends on many things, how you
power it is still the most important. Different regional
grids provide different emission levels relative to operating
an electric vehicle because of how each energy mix is
comprised. According to a National Academy of Science
assessment in 2010, the power grid must produce a majority of
electricity from non-fossil fuel in order to realize the
potential of electric vehicles.
Although clean vehicles may reduce the amount of air pollution,
it seems prudent to keep in mind potential, broader impacts
to the environment.
b) Other environmental considerations. Energy is used to
mine iron, lithium, and the rare earth elements; to smelt and
process raw materials; to transport all these materials to
the factory; and to manufacture the cars, the batteries and
everything associated with them. What kind of energy is
consumed for each of these steps and what are their
environmental impacts?
The metals, solvents and processing chemicals required for the
manufacturing of these batteries release GHG like sulfur
hexafluoride (SF6), which is over 20,000 times as effective
in global warming potential as carbon dioxide. SF6 gas
decomposes to form toxics like sulfur/metal-fluoride gases,
sulfur-oxyfluorides, and hydrofluoric and sulfuric acids. If
multitudes of electric vehicles are expected to be built in
the future, then toxic compounds and how they are addressed
are issues that will have to be tackled in order to build a
sustainable future.
13) Conclusion. This bill raises many concerns. Several programs
and projects already exist that would seem to achieve the goals
of this bill. If not, then perhaps components of this bill may
be incorporated into one or more of these programs. Also, it
appears ARB already has existing statutory authority through
AB 904 (Perea) Page 17 of
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AQIP to create CRVRP. The bill is unclear as to the funding
source and amount for CRVRP. There is opportunity for
double-dipping to occur with each used vehicle sold under this
proposal. It is questionable how ARB could enforce against
potential fraud on a used vehicle. The types of incentives
considered in this bill are unclear. Long-term costs and
considerations for the clean vehicle purchaser are of concern.
Most importantly, would this bill improve the air quality in
disadvantaged communities?
Considering the issues raised above, the Committee may wish to
consider whether there are sufficient answers to these questions
and concerns to move this legislation forward.
14) Double referral. This bill has been referred to the Senate
Committees on Transportation & Housing and Environmental
Quality. This bill is scheduled to be heard in Senate
Transportation & Housing Committee on July 14, 2015.
Related/Prior Legislation
AB 1176 (Perea) would establish an Advanced Low-Carbon Diesel
Fuels Access Program to fund low-carbon diesel fueling
infrastructure projects in communities that are disproportionately
impacted by environmental hazards and where the greatest air
quality impacts can be identified. AB 1176 was heard in Senate
Transportation Committee on June 30, 2015.
SB 1275 (de León, Chapter 530, Statutes of 2014) established the
Charge Ahead California Initiative under ARB to provide incentives
to increase the availability of zero-emission vehicles and
near-zero-emission vehicles, particularly in disadvantaged
communities.
SB 459 (Pavley, Chapter 437, Statutes of 2013) required ARB, in
consultation with the Bureau of Automotive Repair, to update EFMP
regulations by June 30, 2015. SB 459 required the guidelines to
include a variety of new policies, including allowing for
retirement and replacement vouchers of larger amounts, focusing
the program more heavily on lower-income owners, and streamlining
program requirements to facilitate participation.
SB 359 (Pavley, Chapter 415, Statutes of 2013) required ARB, in
consultation with Bureau of Automotive Repair, to update the EFMP
AB 904 (Perea) Page 18 of
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guidelines, as specified, by June 30, 2015.
SB 535 (de León, Chapter 830, Statutes of 2012) requires the
Department of Finance, when developing the three-year investment
plan for cap-and-trade moneys, to allocate 25% of these funds to
projects that provide benefits to disadvantaged communities, and
at least 10% to projects located within disadvantaged communities.
DOUBLE REFERRAL:
This measure will be heard in Senate Transportation and Housing
Committee on July 14, 2015.
SOURCE: Author
SUPPORT:
American Lung Association of California
California Environmental Justice Alliance
Coalition for Clean Air
Communities for a Better Environment
Environment California
The Greenlining Institute
Latino Coalition for a Healthy California
Natural Resources Defense Council
San Joaquin Valley Air Pollution Control District
Valley Clean Air Now
OPPOSITION:
None received
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