Tag Archives: natural gas

Notice of Intent to Issue Second Round Funding: Tennessee Natural Gas and Propane Vehicle Grant Program

For the first time in almost four decades, the U.S. transportation sector produces more carbon dioxide emissions than any other sector. Within the State of Tennessee, the transportation sector also consumes the most energy of any other sector, representing 28.3% of all energy consumed in 2015. TDEC engages in a variety of programs and initiatives to assist with and facilitate the accelerated adoption of cleaner, alternative fuels and advanced vehicle technologies within the State. These initiatives are helping to reduce our transportation system’s footprint and to improve our air quality.A graph depicting Tennessee's energy consumption by sector, sourced from U.S. DOE.

One such initiative is the Tennessee Natural Gas and Propane Vehicle Grant program, designed to assist public, nonprofit, and private Tennessee-based fleets with the investment in and purchase of natural gas or propane-powered vehicles. TDEC OEP manages this program and has recently released a Notice of Intent (NOI) to open the program up for a second round of funding, details below.

Visit US DOE’s Alternative Fuel Data Center to learn more about the alt fuels available to you and your fleet. You can also use the Alternative Fuel Life-Cycle Environmental and Economic Transportation (AFLEET) tool to calculate your fleet’s petroleum use, costs of ownership, and emissions–and to learn how you might save in all these areas by switching to natural gas or propane.

TDEC OEP is pleased to release this NOI to issue a second round of funding under the Tennessee Natural Gas and Propane Vehicle Grant Program. The sound round of the program is limited to one application per grantee, per location. Applications may address a variety of eligible vehicle types and uses.


  • $1,700,000 will be available under this competitive funding opportunity.
  • Each grant will provide up to 70% 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.


  • A project must propose to receive funding for a minimum of one vehicle.
  • Eligible vehicles must either (1) be purchased new, from an original equipment manufacturer (OEM) or OEM-authorized dealer or (2) be converted to run on natural gas or propane through an EPA-certified, after-market conversion.
  • 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. Natural gas or propane-powered bi-fuel vehicles, or vehicles that are capable of operating on gasoline or diesel in addition to natural gas or propane, shall be eligible for emergency response vehicles only. (All bi-fuel vehicles will be required to utilize either natural gas or propane for no less than 75% of the vehicle’s fuel use for a period of no less than five years. The grant amount available to bi-fuel vehicles will be 75% that of dedicated vehicles. Bi-fuel vehicles will therefore only be eligible to receive no more than 52.5% of the conversion or incremental purchase cost, up to $25,000 for each eligible vehicle.)
  • Light, medium, and heavy-duty vehicles will be considered eligible, as there will be no gross vehicle weight restrictions or requirements.
  • Applicants must intend to maintain operations in Tennessee for a minimum of six years.

Application forms for the second round of the Tennessee Natural Gas and Propane Vehicle Grant Program are expected to be released in the coming months. For more information about this program, or about other TDEC sustainable transportation efforts, contact Alexa Voytek at Alexa.Voytek@tn.gov or 615-532-0238.


NREL Guide Helps to Determine Cost-Effectiveness of CNG Fleets

Even with today’s discounted gasoline prices, natural gas as a fuel is about 20% cheaper than that of gasoline.[1] Although the initial purchase price of vehicles running on natural gas is higher than those fueled by gasoline, the cost savings that a consumer witnesses over the lifespan of a natural gas vehicle (NGV) helps to recover that initial investment cost in a short period of time.

An individual or business may also be keen to invest in a natural gas vehicle because NGVs have substantially lower operating and maintenance costs, as natural gas burns cleanly and there is less engine deterioration than there is with gasoline.[2] Above all, NGVs emit approximately 6%-11% lower levels of harmful greenhouse gas emissions than gasoline.[3]

A new publication by the National Renewable Energy Laboratory (NREL) breaks down the variables that many fleet managers face when deciding on the economic viability of investing in compressed natural gas (CNG)-fueled fleet vehicles.

In particular, NREL developed a Vehicle Infrastructure and Cash-Flow Evaluation (VICE) model to help business owners and fleet managers seeking to evaluate the cost savings they might generate by investing in CNG-fueled vehicles.

As each fleet represents a unique case study, the report breaks down the operating parameters of CNG-powered vehicles, analyzing infrastructure, financial incentives, vehicle maintenance, fuel taxes, fuel pricing, inflation, and vehicle type, so that fleet owners can make more informed decisions about the financial soundness of investing in NGVs.

Tennessee CNG Laws and Incentives

The State of Tennessee has its own specific incentives to make natural gas an attractive option as an alternative fuel. In particular, there is a natural gas station property tax reduction, by which any public utility, commercial, or industrial property certified to fuel natural gas vehicles may not be valued for property tax purposes at more than 30% of its total installed cost.[4] In the state of Tennessee, both Piedmont Natural Gas and UPS have utilized this incentive to build natural gas refueling stations. Furthermore, there are state procurement policies in place that favor the adoption of NGVs within the State’s fleet.

A few CNG-powered vehicles are also included on the federal high occupancy vehicle (HOV) lane exemption list, which allows low emission and energy efficient vehicles access to the HOV lane, even if the vehicle has fewer than the required number of occupants. This adds to the overall cost-effectiveness of owning natural gas vehicles, as drivers in this lane experience substantial savings in travel time.

Tennessee NGV Rally

From May 18-22, a CNG-fueled vehicle rally took place in Tennessee, beginning at Memphis Light, Gas & Water. Check out the fully rally details here to see where the vehicles stopped and refueled.

[1] Using average prices in Nashville on 4/23/15 from the following two sites: http://www.cngprices.com/station_map.php and http://www.nashvillegasprices.com/

[4] Tenn. Code Ann. § 67-4-2004(9) defines “certified green energy production facility” as including a facility certified by the department of environment and conservation as an alternative motor vehicle fueling station that utilizes natural gas in compressed or liquid form for the purpose of fueling motor vehicles and that is projected to displace more than six thousand gallons (6,000 gals.) of petroleum annually.  Under Tenn. Code Ann. § 67-5-601(f), public utility or commercial or industrial property that is used to engage in the fueling of natural gas vehicles and that is certified as an alternative fueling site as described in Tenn. Code Ann. § 67-4-2004(9) is not exempt from taxation but will be initially valued at not more than 30% of its total installed costs.  This valuation also applies to machinery and equipment utilized in a natural gas vehicle fueling station such as storage vessels, compressors, dryers, dispensers, piping, and compressed or liquefied gas appliances.  A copy of the facility certification by the department of environment and conservation is required to qualify for the valuation.  The findings of the General Assembly that this valuation is based on the limited number of vehicles equipped to use natural gas as fuel and that discouraging investment in property used for fueling alternative fuel vehicles would deny Tennessee citizens the environmental benefits and energy security arising from use of natural gas as a transportation fuel are to be considered when the property is reappraised.