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GAO Report Concludes Plug-in Vehicles Offer Potential Benefits, but High Costs and Limited Information Could Hinder Integration into the Federal Fleet; Recommended Actions

The US federal government has set a goal—via Executive Order 13423—for federal agencies to use plug-in hybrid electric vehicles (PHEV) as they become available at a reasonable cost. In response to a request from Representatives Henry Waxman (Chairman, Committee on Energy and Commerce); Edolphus Towns (Chairman, Committee on Oversight and Government Reform); and Darrell Issa (Ranking Member, Committee on Oversight and Government Reform), the US Government Accountability Office (GAO) examined the (1) potential benefits of plug-ins; (2) factors affecting the availability of plug-ins; and (3) challenges to incorporating plug-ins into the federal fleet.

The GAO found that increasing the use of plug-ins could result in environmental and other benefits, but also that realizing these benefits depends on several factors. Although plug-ins could significantly reduce oil consumption and those associated greenhouse gas emissions, the electricity used for charging the batteries would need to be generated from lower-emission fuels such as nuclear and renewable energy rather than the fossil fuels for PHEVs to reach their full potential.

However, the GAO notes, “new nuclear plants and renewable energy sources can be controversial and expensive.” In addition, the report says, research suggests that for plug-ins to be cost-effective relative to gasoline vehicles the price of batteries must come down significantly and gasoline prices must be high relative to electricity.

Auto manufacturers plan to introduce a range of plug-in models over the next 6 years, but several factors could delay widespread availability and affect the extent to which consumers are willing to purchase plug-ins. For example, limited battery manufacturing, relatively low gasoline prices, and declining vehicle sales could delay availability and discourage consumers, the GAO said. Other factors may emerge over the longer term if the use of plug-ins increases, including managing the impact on the electrical grid and increasing consumer access to public charging infrastructure needed to charge the vehicles.

To incorporate plug-ins into the federal fleet, agencies will face challenges related to cost, availability, planning, and federal requirements. Plug-ins are expected to have high upfront costs when they are first introduced. Agencies vary in the extent to which they use life-cycle costing when evaluating which vehicle to purchase. Agencies also may find that plug-ins are not available to them, especially when the vehicles are initially introduced because the number available to the government may be limited.

In addition, agencies have not made plans to incorporate plug-ins due to uncertainties about vehicle cost, performance, and infrastructure needs. Finally, agencies must meet a number of requirements covering energy use and vehicle acquisition—such as acquiring alternative fuel vehicles and reducing facility energy and petroleum consumption—but these sometimes conflict with one another. For example, plugging vehicles into federal facilities could reduce petroleum consumption but increase facility energy use. The federal government has not yet provided information to agencies on how to set priorities for these requirements or leverage different types of vehicles to do so. Without such information, agencies face challenges in making decisions about acquiring plug-ins that will meet the requirements, as well as maximize plug-ins’ potential benefits and minimize costs.

As federal agencies work to cost-effectively comply with requirements and goals for conserving energy in their facilities and vehicle fleets, a number of uncertainties hinder their efforts. Although, by making statutory requirements, Congress signified the importance of acquiring alternative fuel vehicles, using alternative fuel, decreasing petroleum use, decreasing greenhouse gas emissions, and improving energy efficiency in facilities, the requirements can be costly and are sometimes in conflict. As a result, agencies are uncertain about setting priorities and struggle to meet the overall intent of these requirements and goals. Executive Order 13423’s directive to incorporate plug-in hybrids into fleets adds to the agencies’ struggle to balance requirements and goals within their budgets. Without having clear priorities for the patchwork of requirements that compete for funding, agencies may miss opportunities to effectively use new technologies and maximize petroleum reduction. Alternatively, agencies may opt to meet the requirements that are most feasible for them, regardless of whether the actions match the priorities of Congress.

The GAO made the following recommendations to facilitate PHEV acquisition and integration into the federal fleet:

  • To enable agencies to more effectively meet congressional requirements, the Secretary of Energy should, in consultation with Environmental Protection Agency (EPA), General Services Administration (GSA), Office of Management and Budget (OMB), and organizations representing federal fleet customers such as Interagency Committee for Alternative Fuels and Low-Emission Vehicles (INTERFUEL), Federal Fleet Policy Council (FEDFLEET), and the Motor Vehicle Executive Council, propose legislative changes that would resolve the conflicts and set priorities for the multiple requirements and goals with respect to reducing petroleum consumption, reducing emissions, managing costs, and acquiring advanced technology vehicles.

  • The Secretary of Energy should begin to develop guidance for when agencies consider acquiring plug-in vehicles, as well as guidance specifying the elements that agencies should include in their plans for acquiring the mix of vehicles that will best enable them to meet their requirements and goals. Such guidance might include assessing the need for installing charging infrastructure and identifying areas where improvements may be necessary, mapping current driving patterns, and determining the energy sources used to generate electricity in an area.

  • The Secretary of Energy should continue ongoing efforts to develop guidance for agencies on how electricity used to charge plug-ins should be measured and accounted for in meeting energy-reduction goals related to federal facilities and alternative fuel consumption. In doing so, the Secretary should determine whether changes to existing legislation will be needed to ensure there is no conflict between using electricity to charge vehicles and requirements to reduce the energy intensity of federal facilities, and advise Congress accordingly.

  • The Administrator of GSA should consider providing information to agencies regarding total cost of ownership or life-cycle cost for vehicles in the same class. For plug-in vehicles that are newly offered, the Administrator should provide guidance for how agencies should address uncertainties about the vehicles’ future performance in estimating the life-cycle costs of plug-ins, so agencies can make better-informed, consistent, and cost-effective decisions in acquiring vehicles.

  • Once plug-in hybrids and all-electrics become available to the federal government but are still in the early phases of commercialization, the Administrator of GSA should explore the possibility of arranging pass-through leases of plug-in vehicles directly from vehicle manufacturers or dealers—as is being done with DOD’s acquisition of neighborhood electric vehicles—if doing so proves to be a cost-effective means of reducing some of the risk agencies face associated with acquiring new technology.



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