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March 15, 2018

Day 2 at the 2018 Maui Energy Conference

Categories: Energy | Featured | Transportation | Sponsorships

‘Bottom line’ considered in furthering energy goals

Budgets were top of mind at Day 2 of the 2018 Maui Energy Conference and Exhibition, which concluded today at the Maui Arts and Cultural Center.

“What I worried most about at the (U.S. Department of Energy) was the budget,” said keynote speaker Alice Madden, former Department of Energy principal deputy assistant secretary. Now the executive director for the Getches-Wilkinson Center for Natural Resources, Madden explained that the federal government serves a significant role by helping to jumpstart new technologies necessary for efficiently and cost-effectively generating, storing and using energy. 

She explained that most, if not all, current battery storage technology started with U.S. Department of Energy (DOE) funding assistance. That backing helped many small startups past the initial ‘valley of death’ period new ventures must survive in order to succeed. 

Similar to a program within the Defense Advanced Research Projects Agency for developing defense tech, the DOE launched its own program publicizing funding options for high-potential, high-impact energy solutions that may be too early for private-sector investment. 

Budget was also a central element of a case study presented by Ulupono Initiative Managing Partner Murray Clay on “Balancing EVs (Electric Vehicles) and the Highway Fund.”

Today, Hawaii’s gas tax is the largest source of funding for the state’s highways, contributing about 31 percent of revenue for maintenance and new construction projects. Owners of EVs, which currently make up only 0.63 percent of Hawaii’s 1.06 million passenger vehicles, do not contribute into that fund since they do not purchase gasoline. But with the anticipated growth of EV market share, the State of Hawaii Department of Transportation (DOT) is looking at different options to fund transportation maintenance and improvement projects in light of EV adoption into the future.  

Under consideration by the Hawaii DOT is the Vehicle Miles Traveled (VMT) tax, also known as a “Road User Fee,” which would charge motorists by miles driven, rather than by fuel consumption. 

“The DOT deserves credit for being proactive,” Clay said. “But energy and the environment are no less important; they must be considered.”

While the tax identifies motorists that travel more frequently along our public roadway, it ignores the distinction between various types of vehicles being driven. Larger vehicles, which require more energy and have a greater impact on the environment, will be taxed at exactly the same rate-per-mile as fuel-efficient vehicles. With the same rate charged per-mile, that means that less efficient vehicles will actually be paying less per-unit of emissions or per-unit of energy used than electric vehicles and other fuel-efficient vehicles.

Ulupono Initiative Managing Partner Murray Clay presented a case study on “Balancing EVs and the Highway Fund” at the 2018 Maui Energy Conference and Exhibition.

Swapping the gas tax for an across-the-board VMT tax is simply bad policy. It would overlook the state’s energy goals, primarily driven by the State Energy Office, as well as the state’s sustainability goals, overseen by a combination of agencies that include the Department of Health, Department of Land and Natural Resources, and Office of Planning

Hawaii can do better by working together and across departments’ functional areas, while helping move the state toward its renewable energy and clean transportation goals. 

For example, a more productive solution would be to gradually move from the gas tax to a VMT tax as EV share increases. Under this policy, everyone pays something for using the roads, yet there is still an incentive to be more fuel efficient and create less emissions. 

Clay presented several alternatives in his presentation, which is available for download here 

One thing is clear: sufficient highway funding is necessary. However, means of funding should consider not only motorists’ usage of the roadways, but energy consumption and consideration of environmental impacts.