TDEC OEP Requests Confirmation of Interest in Statewide Application to EPA Clean Heavy-Duty Vehicles Program

The Tennessee Department of Environment and Conservation’s Office of Energy Programs (TDEC OEP) is evaluating a potential statewide application in response to the EPA Clean Heavy-Duty Vehicles Grant Program for all-electric, class 6 and 7 vehicle replacement projects. TDEC OEP requests confirmation of interest from eligible organizations (municipalities, including school districts, as well as nonprofit school transportation associations) in a possible statewide application.

EPA recently announced up to $932 million in funding for heavy-duty vehicle replacement projects under the Clean Heavy-Duty Vehicles Grant Program. Funding will support the adoption and deployment of eligible class 6 and 7 zero-emission vehicles that will replace older, conventional vehicles.

Two separate competitions have been created under the Clean Heavy-Duty Vehicles Grant Program:

EPA anticipates awarding approximately 70% of the total funding to projects under the School Bus Sub-Program and approximately 30% of the total funding to projects under the Vocational Vehicles Sub-Program. Given the minimum number of vehicles required under each Sub-Program, TDEC OEP is considering submitting a statewide application to allow multiple organizations to replace diesel heavy-duty vehicles with all-electric vehicles.

EPA will fund a percentage of the new vehicle up to the per-vehicle funding cap, as shown in the table below. Organizations interested in working with TDEC OEP are responsible for providing or securing any remaining project-related costs as non-federal cost share beyond the caps detailed below.

*ADA-compliant school buses are eligible for an additional $20,000 per-vehicle funding cap (i.e., a total per-vehicle funding cap of $300,000).

As an example of estimated cost share to be required by interested organizations, an all-electric school bus costs approximately $400,000, of which the Clean Heavy-Duty Vehicles Grant Program would cover a maximum of $280,000. The subrecipient organization would then have to cover $120,000, which would be eligible for the Commercial Clean Vehicle Tax Credit of up to $40,000. (Tax exempt entities can now take advantage of this tax credit through the elective pay or “direct pay” provision). Please also note that this estimate does not include the optional purchase and installation of electric vehicle charging infrastructure, which is also an eligible expense under the Program.

Vehicles to be replaced are also subject to certain eligibility conditions with regards to engine model year and prior usage requirements, which can be found starting on page 21 of the Notice of Funding Opportunity (NOFO).

You can find additional information in the NOFO linked above and on the Clean Heavy-Duty Vehicles Grant Program page. Applications are due to U.S. DOE by July 25.

Organizations interested in participating in a TDEC-led statewide application for funding should provide the following information via email to TDEC.OEP@tn.gov no later than June 7:

Please indicate your organization’s interest via e-mail to TDEC OEP no later than June 7. Following this date, TDEC OEP will evaluate the level of interest to determine whether it will compile and submit a statewide application. If TDEC OEP moves forward with a statewide application, it will work directly with organizations that have expressed interest to secure letters of cost share commitment as well as other relevant details on vehicles to be replaced for purposes of the application to EPA.