Texas launches $2,500 incentive for CNG, electric vehicles

Steve Ghormley from Freedom CNG and Railroad Commissioner David Porter fuel up a truck at the new CNG fueling station serving Houston Distributing Company near the company's facility on High Life Drive Thursday March 27, 2014.(Dave Rossman photo)

Steve Ghormley from Freedom CNG and Railroad Commissioner David Porter fuel up a truck at the new CNG fueling station serving Houston Distributing Company near the company’s facility on High Life Drive Thursday March 27, 2014.(Dave Rossman photo)

HOUSTON — Drivers will now be able to get up to $2,500 in state incentives to help purchase alternative-fuel vehicles, the Texas Commission on Environmental Quality announced this week.

Officials with TCEQ said it’s the first time the agency has offered an alternative fuel vehicle incentive program specifically geared towards light-duty vehicles. The incentive program was part of state legislation that was approved by the state legislature a year ago.

Joe Walton, manager of the implementation grants section at TCEQ, said previous efforts to launch the program had sputtered as they’ve failed to get funding.

The new program will provide up to $7.7 million in incentives to help defray the cost of leasing or buying light-duty vehicles powered by electricity, compressed natural gas or liquefied petroleum gas, also known as propane. Until now, the agency’s incentives have applied to heavy- and medium- duty vehicles that were geared toward fleet applications.

But now, buyers of consumer-grade vehicles like the electric Nissan Leaf or Chevy Volt, or CNG versions of the Honda Civic or Ford F-150, are eligible.

The changes were part of the state’s Texas Emissions Reduction Plan, which offers financial incentives for lower-emissions vehicles as part of en effort to improve air quality in the state. TCEQ had been sorting out the rules of what type of vehicles would be eligible for the program since last year.

The program runs through June 2015 but will conclude if it runs out of money earlier.

The program would only partially offset the cost of the alternative fuel vehicles, which generally cost significantly more than their gasoline-powered counterparts. Converting an F-150 to run on CNG, for example, can cost $7,500 to $9,500, and the Chevrolet Volt costs about $34,185, more than many luxury sedans.

But Walton emphasized that TCEQ’s incentives can be combined with other grant programs offered by the state as well as the federal government. The federal government offers tax credits of $2,500 to $7,500 for some electric vehicles, for example.

Meanwhile, on Wednesday, officials were preparing for a grand opening of San Antonio’s first CNG station in a move they say will help provide a vital link for drivers making trips between Houston, San Antonio and Dallas. According to the U.S. Department of Energy, Texas has 44 public CNG stations.