Tennessee Natural Gas and Propane Vehicle Grant Program

The Tennessee Natural Gas and Propane Vehicle Grant Program will assist public, non-profit, and private Tennessee-based fleets with the investment in and purchase of natural gas or propane-powered medium- and heavy-duty vehicles. The program, managed by the Tennessee Department of Environment & Conservation’s Office of Energy Programs (TDEC OEP), is limited to one application per grantee, per location. Applications may address a variety of eligible vehicle types and uses.

Funding:

  • $2,500,000 is available under this competitive funding opportunity.
  • Each grant will provide up to 50% of the incremental purchase cost of eligible vehicles, with a maximum grant of $25,000 for each eligible vehicle.
  • The maximum amount that may be awarded to a grantee shall not exceed $250,000.

Eligibility:

  • A project must propose to receive funding for a minimum of three vehicles.
  • Eligible vehicles must be purchased new, from an original equipment manufacturer (OEM) or OEM-authorized dealer. The vehicles purchased must be fully equipped by the manufacturer or by a third party at the direction of the manufacturer to operate on an alternative fuel prior to the initial purchase and registration of the vehicle.
  • Vehicles must be registered within the State of Tennessee, unless the vehicle is to receive International Registration Plan (IRP) apportioned registration. In the case of the latter, the entity applying for a grant must submit a letter, certifying the percentage of time that the vehicle is expected to operate within the State of Tennessee.
  • Eligible vehicles include dedicated compressed natural gas vehicles, dedicated liquefied natural gas vehicles, and dedicated propane-powered vehicles.
  • Vehicles must be classified as “medium-duty” or “heavy-duty,” and must therefore have a gross vehicle weight rating of at least 14,000 pounds. Examples of “medium-duty” vehicles that would be considered eligible are shuttle buses, delivery trucks, and some bucket trucks. Examples of “heavy-duty” vehicles that would be considered eligible are school buses, tractor trailers, and waste collection vehicles.
  • Applicants must intend to maintain operations in Tennessee for a minimum of six years.

Deadline to Submit:

Applications must be received by 8:00 pm CST on December 16, 2016. Acceptable delivery methods include: mail, express delivery service, hand delivery, or email. Awards are expected to be announced by January 16, 2017, and the expected timeframe for award negotiations will be March 2017.

Digital copies should be emailed to: TDEC.OEP@tn.gov.

Hard copies should be mailed to:

Tennessee Department of Environment and Conservation
The Office of Energy Programs - Tennessee Natural Gas and Propane Vehicle Grant Program
C/o Alexa Voytek
William R. Snodgrass Tennessee Tower
312 Rosa L. Parks Avenue, 2nd Floor
Nashville, TN 37243

Application Documents:

Tennessee Natural Gas and Propane Vehicle Grant Program Application Manual
Tennessee Natural Gas and Propane Vehicle Grant Program Application (CN-1495)

FAQ:

1. Who can I contact if I have questions?

Alexa Voytek, Program Manager, TDEC Office of Energy Programs, alexa.voytek@tn.gov, 615-532-0238

2. Are leased vehicles eligible for the program?

No; eligible vehicles must be purchased new from an original equipment manufacturer (OEM) or OEM-authorized dealer.

3. What supporting documentation is required to apply for the grant?

  • The application must include a project description, which must contain:

A description of the number and type of eligible vehicles to be purchased;
Confirmation of the existence or planned construction of fueling infrastructure within Tennessee that will be available to supply all vehicles to be supported with grant funds;
A statement as to whether or not the primary fueling facility will be accessible to the public;
A statement on the projected use of natural gas or propane in gasoline gallon equivalents (GGEs) accompanied by the methodology utilized to determine the projected use;
A plan which demonstrates the financial viability of the project, the proposed project purchase schedule, and the expected payback;
A description of the total incremental purchase costs of eligible vehicles, as well as the amount of incremental cost requested as grant share; and
A description of the expected driving route of the vehicles to be supported with grant funds (i.e., whether the vehicle will be in service on a daily, weekly, or monthly basis and the expected length of vehicle trips; where the vehicle is expected to travel (will it serve a local route, regional route, state-wide route), the highways/roadways that the vehicle is expected to travel on, etc.).

  • If the vehicle is to receive IRP apportioned registration, the application must include a letter certifying the percentage of time that the vehicle is expected to operate within the State of Tennessee.
  • The application must include a budget justification and supporting documentation to detail the calculations, assumptions and information used to determine the new vehicle purchase price, the equivalent diesel or gasoline vehicle purchase price, the total incremental purchase costs of eligible vehicles, the amount of incremental cost requested as grant share, applicant or project partner match amount, total project cost, the financial viability of the project, and the expected payback. Supporting documentation should include price quotes and/or other verifiable sources for incremental cost calculations.
  • The application must contain letter(s) documenting financial commitment to the project. Letters of financial commitment from each source, including the applicant, should clearly state the amount and source of matching funds (i.e., non-incremental costs) to be committed to the project. Funding "applied for" but not yet awarded from other sources may not be included.
  • The application must contain documentation confirming the existence of fueling infrastructure available in Tennessee to supply eligible vehicles to be supported with grant funds. For existing fueling stations, the applicant must provide a letter from the owner or operator of the station stating that the fueling station is or will be capable of supporting the projected fuel consumption within the grant period of performance. For proposed new fueling stations, the applicant must provide a letter from the owner/operator of the station identifying the online date, the supplier of natural gas, and the capabilities of fueling station to support the projected fuel consumption of the project within the grant period of performance.

For more information on the above requirements, please refer to the Tennessee Natural Gas and Propane Vehicle Grant Program Application Manual.

4. What if I purchased my vehicle before being awarded grant funding?

Only vehicles purchased within the period of performance of a fully executed grant contract shall be eligible for reimbursement.  

5. Can I purchase the vehicle(s) out of state?

Yes. However, eligible vehicles must be registered within the State of Tennessee, unless the vehicle is to receive IRP apportioned registration. In the case of the latter, the organization applying for a rebate must submit a letter certifying the percentage of time that the vehicle is expected to operate within the State of Tennessee.

6. Will I be required to scrap an older vehicle in order to be eligible to receive grant funding?

No; this will not be an eligibility requirement to receive grant funding. However, the application allows applicants to note intent to replace and dispose of an older vehicle, and such intent will be taken into consideration when all applications are being reviewed.

7. Will the program require grant-funded vehicles to operate in nonattainment or maintenance areas for one or more criteria pollutants (such as ozone or PM 2.5)?

No; this will not be an eligibility requirement to receive grant funding. However, the application requests that applicants state whether the vehicles are expected to operate in nonattainment or maintenance areas, so that this can be taken into consideration when all applications are being reviewed.

8. What reporting requirements apply to this program?

  • Grantees must submit brief quarterly reports to include updates on procurement, vehicle operator training (if needed), and fueling infrastructure until the grant-funded vehicles are purchased, delivered, and put into service.
  • Within three months of the conclusion of each year of the grant period, and for three years thereafter, grantees must submit an annual report. Such reporting shall include the demonstrated usage of compressed natural gas, liquefied natural gas, or propane in purchased vehicles, the number of gasoline gallon equivalent (GGE) purchased, purchase price, refueling locations, miles driven, driving or route habits, metrics regarding emissions reductions, and savings or cost avoidance.
  • Grantees must submit a final project report within three months of the completion of the grant period. The final project report will take the place of the annual report for the final year of the grant period and must include cumulative financial information to match the final reimbursement request. The final project report must also include an inventory control report of all equipment or motor vehicles purchased with funding through the Grant Contract.

Note: TDEC OEP will provide reporting templates for quarterly, annual, and final reports. These templates will be referenced in the Grant Contract and will be attached to the corresponding grant program manual. If Grantees must track some of the required information for other purposes, OEP will consider accepting that information in other formats.