Tennessee Natural Gas Laws and Incentives
State Incentives
Agricultural Feedstock Processing Demonstration Loan Program
The Tennessee Department of Economic and Community Development will disperse loans of up to $500,000 for projects that increase Tennessee farm income and production of alternative fuel feedstock. Eligible facilities include those that process more than 200,000 bushels each year.
Infrastructure Development Program
FastTrack Infrastructure Development Program funds may be used for alternative fueling infrastructure improvements. Funds may be used in situations where there is a commitment by certain private sector businesses to locate or expand in the state and to create or retain jobs for Tennesseans.
State Laws and Regulations
Energy Task Force
The Governor’s Task Force on Energy Policy was established to develop a state energy plan to facilitate energy efficiency and the use of alternative and renewable fuels in the state. The energy plan will include the following: a summary of opportunities for the state government to use an energy-efficient approach in purchasing and managing the state vehicle fleet; prospective policies, legislation, and incentives to encourage energy efficiency; possible public-private partnerships to encourage research and development of clean energy technologies; and strategies for expanding the use of alternative and renewable fuels. (Reference Executive Order 54, 2008)
Alternative Fuel and Fuel-Efficient Vehicle Use Requirements
All state agencies, universities, and community colleges that have more than 10 state-owned vehicles in their fleet are required to incorporate alternative fuel, hybrid electric, or other fuel-efficient or low-emission vehicles in order to reduce or displace at least 20% of the fleet's consumption of petroleum by January 1, 2010. If the fleet includes vehicles modified for educational, emergency, or public safety purposes or vehicles used for emergency or law enforcement purposes, the fleet must provide for a minimum 10% petroleum use reduction. (Reference Tennessee Code 4-22-101)
Energy-Efficient Vehicle Acquisition Requirement
State fleets are encouraged to make every effort to ensure that at least 30% of newly purchased motor vehicles are energy-efficient vehicles. Energy-efficient vehicles are defined as passenger vehicles that are: alternative fuel vehicles as identified by the Energy Policy Act of 1992 (Public Law 102-486) including those using ethanol, biodiesel, or other alternative fuel; a hybrid electric vehicle; or a conventional gasoline vehicle achieving an average fuel economy of at least 25 miles per gallon or greater. Beginning June 30, 2008, the Commissioner of General Services will compile information on motor vehicles owned and leased by the state including a categorization of vehicles by an energy-efficiency rating. (Reference Tennessee Code 4-3-1109)
Biofuels Strategy and Outreach Campaign
The Governor's Interagency Alternative Fuels Working group, supported administratively by the Tennessee Department of Environment and Conservation, was established to develop a comprehensive state alternative fuels strategy to make Tennessee a leader in the production, distribution, and use of biofuels. The Working Group developed BioTENN, a comprehensive, statewide public education and outreach campaign to increase public awareness and understanding of alternative fuels, particularly biofuels. Furthermore, state agencies should strive to use ethanol and biodiesel in appropriate state-owned vehicles whenever possible and should support the development of biofuels fueling infrastructure. (Reference Executive Order 33, 2006)
Compressed Natural Gas (CNG) Tax and Permit
A use tax of $0.13 per gallon is imposed on CNG used for the propulsion of motor vehicles on public highways. For the purpose of determining the tax on CNG, a gallon equivalent factor of 5.66 pounds per gallon is used. Government agencies are exempt from this tax. A CNG vehicle user must apply for and obtain a CNG user's permit from the Commissioner of Revenue. (Reference Tennessee Code 67-3-1113, and 67-3-1114)
Utilities/Private Incentives
Natural Gas Infrastructure Technical Assistance
Atmos Energy offers preliminary feasibility studies for compressed natural gas fueling stations and vendor selection on a case-by-case basis.
