Fort Smith officials plan to take advantage of a state-managed and federally-funded rebate program designed to help cover the costs of converting vehicles to use compressed natural gas.
The Arkansas Energy Office (AEO) first announced in August the rebate program and that it was to be funded by $2.2 million in federal stimulus funds. The program was originally only available to vehicle fleets but in late October was expanded to include all Arkansas licensed vehicles eligible for conversion.
The AEO, a division of the Arkansas Economic Development Commission, then announced Dec. 15 that rebate requests will now be accepted through Jan. 31, with the date to complete the conversions extended to April 30, 2012.
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.
The gasoline equivalent cost of compressed natural gas is roughly $1.03 a gallon. Fuel mileage is equivalent. A CNG user buying 200 gallons of fuel a month will spend $206, while a gasoline vehicle owner with the same amount of fuel will spend — at $3.10 per gallon — $620. Annualized, that comes to a savings of $4,968. CNG proponents also claim that natural gas motors require less maintenance.
Jeff Dingman, deputy Fort Smith city administrator, noted in a recent memo to the Fort Smith Board of Directors that the city will apply for the rebate “in keeping with the overall Board objective of becoming ‘greener’ in city operations.”
Dingman said the city has ordered a conversion kit for a Chevy Tahoe operated by the Fort Smith Police Department and a new pickup truck to be purchased by the Fort Smith Fire Department in 2012. Dingman said the rebate extension gives the city time to purchase the pickup truck and install the conversion kit.
“Both of these installations will give us some first-hand experience on how well the fueling system works for our applications, and perhaps will lead to more CNG vehicles in the city’s fleet. We are still evaluating whether or not we can find suitable conversion kits for one or two of the Transit buses, but we are learning that it may not be a possibility at this time,” Dingman explained.
Dingman said the city will also review the city fleet to evaluate the cost-benefit ratio for more CNG usage.
“We intend to still evaluate candidates for CNG conversion in the city’s fleet. The conversion kits range from $10,000 to $12,000 each, so they need to be new or relatively new vehicles so that we can realize the savings return on the investment before the vehicle reaches its useful life,” Dingman wrote.