Economy and Environment and Technology

Incentives take aim at rising fuel costs: State pumps out grants for company vehicles using alternative fuels

July 18, 2005

A combination of soaring gasoline prices, state grants and environmental idealism have whet appetites among businesses for "alternative fuel vehicles" such as this batterypowered Global Electric Motorcars model.

A $3,996 grant from the Lieutenant Governor's Office paid for about one-third the cost of the Pizza Express vehicle, manufactured by a DaimlerChrysler subsidiary.

"Industries such as ours should be pioneers in the electric vehicle frontier," said Gabe Connell, franchisee of the Pizza Express restaurants near IUPUI and in Broad Ripple.

As gas prices continue to rise, more businesses are contemplating options for environmentally friendly vehicles, driving up interest in electric vehicles as well as those burning soy diesel and the 15-percent ethanol/85 percent gasoline mixture known as E85.

State officials want to spur additional interest in hopes of avoiding federal air pollution sanctions that could force big cities such as Indianapolis to implement vehicle emissions testing.

The Lieutenant Governor's Office plans to shell out at least $180,000 in grants in the 2006 fiscal year that began July 1 to help businesses and public agencies use AFVs, said Vicki Duncan Gardner, press secretary for Lt. Gov. Becky Skillman.

If demand is strong enough, the state may have access to another $320,000 in mostly federal money to give out, officials said.

Gasoline priced above $2 a gallon "makes more of a case for renewable fuels, in addition to the environmental benefits," Gardner said.

The bulk of the $134,492 in grants issued in the first half of 2005 went to municipal agencies and school districts for the use of ethanol and soy diesel fuels. They're less polluting than straight gas or diesel and, sometimes, less expensive.

Warsaw gas station Freedom Express recently listed E85 for $1.69 a gallon vs. $2.28 for regular gas.

Indiana's only other station selling E85, Jiffy Mini-Marts in Terre Haute, has reported a similar price spread for the E85 blend.

Ethanol is made from corn and other grain products. State officials hope its production here could be a boon to the state economy. At least three new ethanol plants are in the works, thanks partly to a new state tax incentive for ethanol production.

Many vehicles manufactured since the late 1990s, particular by Ford and General Motors, have fuel systems beefed up to burn the otherwise corrosive E85.

Pizza Express and some other businesses are going a different route, choosing to forgo petroleum-based fuels and buying electric cars that cost only pennies per mile to operate.

Pizza Express' GEM electric car pollutes less than an oven making 40 pizzas-the quantity the vehicle can carry-though one could argue that the coal-fired power plant that generated the electricity spewed some extra particles to charge the car.

The GEM can silently roll up to 30 miles on a single charge. The street-legal vehicle starts at around $7,500. The fourseat version with windows and other goodies goes for nearly twice that.

"There's heightened interest recently, with gas prices going where they are," said Bill Robertson, CEO of Bill Robertson Motors, a Greencastle Chrysler dealer who has sold GEM cars for about three years to customers from Indianapolis to Austin, Texas.

Among buyers is Estridge Cos., which uses several to shuttle prospective homeowners around its Centennial community in Westfield. The University of Texas and the Indianapolis Colts also have placed orders.

"It has to be for the right application," Robertson added.

Indeed. Stomp the accelerator of Pizza Express' 1,100-pound GEM and the fastest it will go on level streets is 25 miles an hour. The upside is that the car can be plugged in when not in use to top off the conventional, marine deep-cycle batteries. The brakes also work as a generator when applied.

"It's good for short, nearby deliveries," Connell said.

He confessed that his lone GEM car doesn't significantly reduce his expenses, however. But its egg shape and comicbook-like graphics scheme have been a marketing dynamo. When his crew trailers the car to festivals, it's an instant conversation starter.

Connell said he hopes technology advances enough to give the vehicle more car-like attributes. Driving the lightweight car with 12-inch tires in the snow would be a headache. The GEM has no heater or airconditioner, either.

"Hopefully, the technology comes on board that we'll have a fleet of these," Connell added.

For now, at least, the largest use of alternative fuels in the area involves cleanerburning fossil fuels. Citizens Gas & Coke Utility has more than 125 service vans and other vehicles using compressed natural gas. In early July, CNG cost $1.35 for the equivalent of a gallon of gasoline that cost $2.16.

"It right now enjoys a relative price advantage," said Citizens spokesman Dan Considine.

He said other savings are measured in reduced maintenance expenses, such as longer oil change intervals upwards of 10,000 miles.

Many of the state's grants are going to school districts and highway departments to help pay for soy diesel fuel. With soy diesel sometimes 10 to 15 cents above a gallon of ordinary diesel, recipients often use the grants to help offset the price difference.

Recent recipients include a Jasper business that intends to convert four pickup trucks to run on propane, and a Terre Haute apartment complex that wants to buy a GEM to carry prospective renters to look at apartments.

The Central Indiana Clean Cities Alliance estimates more than 1,578 AFVs are in use in central Indiana, up from 856 in 2002.
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