WGA TRANSPORTATION FUELS FOR THE FUTURE INITIATIVE Electricity Report Summary Bob Graham, Electric Team Lead Transportation Fuels for the Future Workshop Denver, CO October 10-12, 2007

Fuel Potential in the West  Point 1 - While there is substantial concern for adequacy of petroleum supplies, the West has ample coal, natural gas, solar, and wind resources from which electricity can be produced  Point 2 - The West has an excellent electrical infrastructure is in place and immediately available. Electric utilities have substantial unused off-peak capacity available for overnight or other charging. Use of this capacity would markedly benefit the electric utility industry. Needed technology development for charging vehicles is trivial.  Point 3 - Use of electricity for transportation will significantly reduce toxic and carbon emissions compared to petroleum fuels.

Unique Challenges  Challenge 1 - Present battery technology makes electric and plug-in hybrid-electric vehicles more expensive than a comparable vehicle with the same amenities, limits electric range, and increases vehicle weight.  Challenge 2 - Consumer acceptance of new, likely more expensive technology, could expectedly be slow unless a strong value/benefit can be established.  Challenge 3 - Infrastructure developments such as consumer education regarding home refueling, off-peak utility pricing, public and on-the-road charging facilities and possible utility buy-back provisions from two-way charging connections are needed to fully take advantage of the potential of electricity use for transportation.

Select Priority Recommendations  General Recommendation - The transition to widespread use of electricity as a transport fuel in the Western states requires consumer education and a long-term commitment from key parties, including utilities and government agencies.  Recommendation 1 - Provide stable funding at the federal and state levels for battery research and development and distribute the results to the public as widely as possible. (near-term)  Recommendation 2 - Support federal, state and local demonstrations of plug-in hybrid electric vehicles (PHEVs) by public and private entities. (near-term)  Recommendation 3 - Revise government fleet purchasing programs to provide market certainty to manufacturers and promote technology demonstration. (near-term)  Recommendation 4 - Address the uncertainty associated with the new technology of new financing and insurance options, e.g., state-backed battery warranties that extend beyond current manufacturer warranties and utility financing for batteries. (mid-term)  Recommendation 5 - Increase state-level cooperation with utilities, mortgage companies and others to develop new mechanisms to mitigate the upfront cost of PHEVs, such as financing through mortgage equity. (long-term)

Key Actionable Recommendations  Include fleet purchase requirements that set fuel consumption and emission requirements to promote early purchases of PHEVs.  Continue and extend state and local incentives to build markets and consumer acceptance for vehicles using electric fuel, including tax incentives for consumer and private fleet purchases and investment incentives for vehicle and advanced component manufacturers.  Implement state and regional business attraction programs; coordinate with members of Congress in efforts to promote investment in the electric drive vehicle-related industry within their states and regions.  Increase state and federal cooperation with the automotive and battery industries to develop demonstration partnerships, such as deployment of prototypes and insertion of advanced batteries into fleets of demonstration vehicles.