Tennessee announces second round of grants for natural gas vehicles

November 10, 2017. The Tennessee Department of Environment & Conservation’s Office of Energy Programs (TDEC OEP) releases a Notice of Intent to issue a second round of funding under the Tennessee Natural Gas and Propane Vehicle Grant Program. The program assists public, non-profit, and private Tennessee-based fleets with the investment in and purchase of natural gas or propane-powered vehicles.

   The second round of the program, managed by TDEC OEP, is limited to one application per grantee, per location. Applications may address a variety of eligible vehicle types and uses. To receive funding, a project must propose to be awarded a grant for a minimum of one vehicle. Eligible vehicles must be purchased new from an original equipment manufacturer or an OEM-authorized dealer, or be converted to run on propane or natural gas through an Environmental Protection Agency-certified after-market conversion.

   Vehicles must be registered within Tennessee, unless the vehicle is to receive International Registration Plan (IRP) apportioned registration. In the latter case, the entity applying for a grant must submit a letter certifying the percentage of time that the vehicle is expected to be operated in Tennessee. A total of $1.7 million will be available under the competitive funding opportunity.

   Eligible vehicles include propane autogas, dedicated CNG and LNG models. Bi-fuel natural gas or propane vehicles, those capable of operating on gasoline or diesel in addition to natural gas or propane, shall be eligible for emergency response fleets only. All bi-fuel vehicles are required to use either natural gas or propane for no less than 75% of the vehicle’s fuel use for a period of no less than five years.

   The grant amount available for bi-fuel vehicles will be 75% that of dedicated versions. Bi-fuel vehicles therefore will only be eligible to receive 52.5% of the conversion or incremental purchase cost, up to $25,000 for each eligible vehicle. Light-, medium-, and heavy-duty vehicles will be considered eligible. There are no gross vehicle weight restrictions. Applicants must intend to maintain operations in Tennessee for a minimum of six years.

   Application forms for the second round of the Tennessee Natural Gas and Propane Vehicle Grant Program are expected to be released in coming months.