Arkansas expands CNG rebate program

Increased demand from individuals has caused the Arkansas Economic Development Commission to expand a Compressed Natural Gas Conversion rebate program the agency first announced in August.

The rebate program, funded by $2.2 million in federal stimulus funds, was originally only available to vehicle fleets but will now include all Arkansas licensed vehicles eligible for conversion. Fleets are still eligible for the rebate.

According to the Arkansas Energy Office of the AEDC, the rebates are available on a first-come, first-served basis until December 2011 or until funds are depleted.

"From input we’ve received over the past few months, Arkansans have a lot of interest in CNG, particularly converting their individual vehicles," Scott Hamilton, director of the Arkansas Energy Office, said in a statement. “I encourage anyone interested in converting to or purchasing a CNG vehicle to apply soon for these funds as it is first come, first served.”

The gasoline equivalent cost of compressed natural gas is roughly $1.07 a gallon. Fuel mileage is equivalent. A CNG user buying 200 gallons of fuel a month will spend $214, while a gasoline vehicle owner with the same amount of fuel will spend — at $3.50 per gallon — $740. Annualized, that comes to a savings of $6,312. CNG proponents also claim that natural gas motors require less maintenance.

CNG conversion costs may range between $6,000 and $18,000, depending on the type of vehicle.

Kelly Volin, industry program manager for the Arkansas Energy Office and manager of the CNG rebate program, said the office received “a lot of calls” after the August announcement from individuals and business owners who did not have enough vehicles to qualify for the fleet rebate. Volin said many of those have been called back now that the program has been expanded.

Volin said much of the individual interest came from Little Rock and Fort Smith because the two cities have public-access CNG stations.

Rebates of 50% of the conversion cost or the incremental cost of purchasing new CNG vehicles will be given directly to the vehicle owner or fleet operators following the conversion to, or purchase of, compressed natural gas vehicles, according to the statement. Also, rebates cannot exceed $25,000, and to ensure rebates are available for multiple fleets, no single entity may receive more than 20% of the CNG rebate fund.

“This is a good move by the Arkansas Energy Office. Individuals and small businesses will now be able to utilize abundant natural gas supplies to lower vehicle operating costs,” said Mike Callan, president of Fort Smith-based Arkansas Oklahoma Gas Corp. “Arkansas Oklahoma Gas has been operating CNG powered vehicles for 30 years with tremendous success. Who can argue with a CNG fuel price of $1.07 per gasoline gallon equivalent, particularly since the fuel is locally produced?”

AOG built the first public-access CNG station in Arkansas, and opened the facility in March, with a formal grand opening in June.