DOE ISSUES FINAL DECISION ON PRIVATE AND LOCAL GOVERNMENT FLEET MANDATES

In January 2004, the U.S. Department of Energy published a final rule announcing its decision not to implement an AFV acquisition mandate for private and local government fleets.

In 2002, as the result of a lawsuit brought against the U.S. Department of Energy by Earth Justice, et al, a federal court ordered the Department of Energy (DOE) to resolve the status of Energy Policy Act mandates for private and municipal fleets. Under the ruling, DOE was to determine whether or not the mandates would be implemented, addressing three issues: 1) whether the EPAct goal of reducing petroleum usage by 30 percent by 2010 is feasible or whether the goal should be revised; 2) whether a private/municipal fleet mandate is needed to meet the goal; and 3) whether the goal will actually be met if the mandate is enforced. DOE issued a draft rule in March of 2003. The final rule, published in January 2004, follows the assessments made in developing the draft rule. 

As stated in the Federal Register publication for the draft rule, DOE's decision is based on its assessment that "implementation of a private and local government fleet rule program would not appreciably contribute to the achievement of EPAct's existing 2010 replacement fuel goal of 30 percent, or of a revised replacement fuel goal were one to be adopted." DOE goes on to state that "adopting a private and local government fleet rule would result in no appreciable increase in the percentage of alternative fuel and replacement fuel used by motor vehicles in the United States."

According to DOE, this conclusion is based on "two interrelated findings and reasons":

First, DOE has concluded that the number of fleets that would be covered by a private and local government fleet mandate and the number of AFV acquisitions that would occur are too small to cause an appreciable increase in the amount of alternative fuel used. This is because of the limitations placed by EPAct itself on DOE's authority to promulgate the new mandate. For example, a private and local government fleet program could only apply to light duty vehicles, to fleets that are located in certain metropolitan areas, and could not apply to a number of excluded vehicle classes and types. Furthermore, even covered fleets can avoid the acquisition requirements if they fall within one of the numerous exemptions provided for in EPAct.

Second, even if a private and local government fleet acquisition mandate were adopted and substantial numbers of AFVs were acquired, there is no assurance that the AFVs would actually use alternative fuels. EPAct only requires the purchase of AFVs, not the use of the alternative fuel. Further, EPAct gives DOE no authority to require that vehicles acquired by private and local government fleets use the alternative fuel for which they were designed.

DOE also notes that based on experience with the federal, state and fuel provider mandate programs, the lack of alternative fuel infrastructure, lack of suitable AFV models, lack of reasonable vehicle prices, and high alternative fuel costs, market forces would prevent appreciable increases in alternative fuel use even if DOE were to impose a private and local government fleet vehicle acquisition requirement. 

As part of its evaluation of a potential private and local government fleet mandate, DOE reviewed the status towards meeting the current replacement fuel goal. DOE has determined "that extraordinary measures would be required to achieve the current goal of 30 percent petroleum replacement by 2010." However, based on many factors including significant Congressional focus on comprehensive energy legislation and an understanding of the purpose of EPAct, DOE has concluded that "it should not make a determination under EPAct concerning the achievability of the 2010 goals at this time" and will not seek to modify these goals.

Additional details on the final rule are available on the DOE website.