Texas Governor: 5k Credit for Plug-In Hybrids to Mollify 'Overzealous' EPA

By Jeff St. John

Texas Gov. Rick Perry doesn’t much care for the “increasingly activist” U.S. Environmental Protection Agency, and he’s willing to put Texas in the forefront of promoting plug-in hybrid electric vehicles to get the federal agency off the state’s back.

That, according to Perry’s state of the state address Tuesday, in which he proposed a $5,000 tax credit for Texans who buy plug-in hybrids if they live in “non-attainment” zones for air quality standards. Those include the metro areas of Dallas-Forth Worth, Houston, Galveston, Beaumont, Port Arthur and El Paso.

“Rather than wait for more mandates and punishments for environmental non-attainment, let’s continue encouraging innovation,” Perry said of the proposal.

If Texas’ legislature takes up Perry’s plan, that could make Texas — not known as the most environmentally friendly state — something of a leader in promoting electric transportation.

More than 40 states have incentives for regular old hybrids, like preferred access to parking or high-occupancy vehicle lanes. A smaller number of states have tax credits of some kind for hybrid owners.

But when it comes to plug-in hybrids — which aren’t yet being mass-produced, though a few hundred converted vehicles are on American roads today — right now only a half-dozen states or so are proposing tax breaks.

And of those, only Oregon has specifically proposed a credit matching the $5,000 value that Perry has proposed, said Felix Kramer, founder of CalCars.org, an electric vehicle advocacy Website.

Of course, the federal government did include a $7,500 maximum tax credit for plug-in hybrids in the energy package it passed in October, Kramer noted — more than double the $3,400 maximum federal credit previously available to regular hybrid cars.

That credit has a cap of 250,000 vehicles, though lawmakers may double that figure as part of the stimulus package now working its way through Congress, said Chelsea Sexton, the former executive director of the electric vehicle advocacy group Plug In America.

Even so, adding state incentives on top of that federal break for plug-in hybrids “is going to make a big difference for a car in the $35,000 to $40,000 range,” Kramer said.

Those are some possible price points he gave for plug-in hybrid vehicles being promised by Toyota (TM), General Motors (GM) and other automakers. Toyota has said it will start testing about 500 plug-in versions of its best-selling hybrid Prius in 2009, and GM wants to bring its Chevy Volt to market by 2010.

Other automakers less well-known to Americans might be aiming at those incentives as well. BYD Co. from China launched a plug-in hybrid called F3DM last month, and plans to sell the car in the United States in 2010.

And whether the tax credits might apply to all-electric vehicles from startups like Tesla Motors and Fisker Automotive as well as automakers like Nissan (NSANY), Mitsubishi, Daimler (DAI), Think and others (see Showing Off Green Cars Amid Economic Gloom) will depend on how they’re structured, Sexton said.

By the way, Perry also said that more plug-in hybrids also could help the state’s burgeoning wind power industry by providing car batteries to store excess energy at night, he said. Utilities have said that using plug-in vehicles as electricity storage devices will be a critical part of building a “smart grid” infrastructure that can accommodate intermittent renewable energy resources like wind power, which is most productive at night.

Texas leads the country in wind power, but lack of transmission and storage capacity has led some of the state’s wind farms to pay the state’s main grid operator to take it (see Texas Wind Farms Paying People to Take Power).

Comments

[Jeff B.:]

Texas, home of the oil industry, Tom DeLay, and their ilk; and the Governor is worried about an 'activist' EPA? Hoo hoo. That's funny. Maybe if the EPA & our entire Federal Govt had not been bought & paid-for the last 8 years by Texas-based oil interests, we wouldn't need an activist EPA now.

Jan 28 09:37 AM

[John D:]

Since April Toyota has now recalled over 2.3 million vehicles for a number of issues - seatbelts to fuels lines .... not sure I would want to trust a Prius as they to have been recalled already for loss of power while your driving. Think I'll take another look at a good old Chevy!!

Jan 28 11:00 AM

[jack kreg:]

much better idea would be to promote natural gas use in all conventional car engines, manufacture the conversion kits for a few 1000 bucks, and also build out the pipe lines to gas stations, that should be easy in TX, as they already have miles of natural gas lines in place.
Natural gas powered vehicles, abundant in the USA, no foreign oil, clean burning, hire American energy workers with your energy dollars.
best of all the vehicle is much cheaper than battery powered electric cars!!

Jan 28 11:06 AM

[kfree:]

Here is a thought...get the great state of California to fire up some of their existing power plants and gen their own electricity.....but alas, they can not. Cali would much rather piss and moan about having to pay market prices for electricity. Typical west coast liberal spew...


On Jan 28 09:37 AM Jeff B. wrote:

> Texas, home of the oil industry, Tom DeLay, and their ilk; and the
> Governor is worried about an 'activist' EPA? Hoo hoo. That's funny.
> Maybe if the EPA & our entire Federal Govt had not been bought
> & paid-for the last 8 years by Texas-based oil interests, we
> wouldn't need an activist EPA now.

Jan 28 01:17 PM

[Lazaris:]

Just another example of "Social Engineering" through taxation,
laws and regulation.

Jan 28 01:44 PM

[Gandalf:]

Texans just don't know how to live in a civilized society. They think they should be able to do every stupid bone-headed thing regardless of its impact on the nation and the world.

Bush proved how bankrupt this arrogant way can be.

Jan 28 06:59 PM

[babyray:]

I will buy a Chevy Volt if I get 5,000 dollars toward it. Good o'll American built quality.

Jan 28 07:34 PM

[me3tv:]

Great Policy making! Now lets get some coal fired electric plants built in a hurry to provide the juice to these new electric cars! And while we are at it - let's subsidize half the cost of building a windmill generator for every 10 cars. Now let me see --- where is Gore investing HIS Nobel prize money? Follow the money !! NO NO - let's not build nuclear - somebody might get a dose of radiation equal to a day in the sun at the beach.

Jan 29 08:48 AM

[Paul Killinger:]

Jeff B,

C'mon now, Jeff. You must be watching a different Congress on C-span than the one which meets in Washington if you believe they favor our domestic O & G interests. To our nation's detriment, I might add.

Jan 29 11:38 AM

[Paul Killinger:]

Baby,

You'd need to earn the taxable equivalent of $200K per year to get the $3,500 credit already available to you.

Oh, and don't forget, besides the $45K sticker price you get to buy another $15K replaceable battery pack every year or so if you drive it very far.

But since the Stimulus package will cost every American $72K, Obama could buy each of us a Volt instead. Maybe he will in the next bill.

Jan 29 11:51 AM

[Cleantech:]

With a gun to its head, Texas "may" do the right thing. Houston ties LA for dirtiest air in the Country and corresponding health costs associated with bad air. It's also a leader in clean Wind Energy to the grid. Put the two together and you have perfect solution for addressing both energy and environmental problems associated with fossil fuels.

Feb 04 04:50 PM

[Poor me:]

another case of strong arming by our government. I'd tell them to stick it. How many Americans will pay $40,000 for a plug in car? Give me a $35,000 credit, and I'll consider it.

Feb 24 11:28 AM

[Poor me:]

When will our states stand up to them?

Feb 24 11:28 AM

[evmdfan:]

This is great new. Electric cars, both plug-ins, and more importantly 100% electric vehicles, are necessary to save our economy, help save our environment, create jobs, provide national security, etc. And we need the governments help to make them affordable, because the automakers sure don't seem like they care enough to come out with a decent model. To learn more about electric cars, check out www.twocentspermile.com

Jul 29 01:06 PM

[themacguy:]

$5000 tax credit? Texas has no state income tax. For individuals, this proposed law is worthless. Might have some value for businesses, I guess.

Sep 19 12:36 PM