Justine Sears and Karen Glitman -
With infrastructure crumbling and state and federal budgets increasingly tight, forward-thinking investments in the transportation sector may seem impractical. Or is the timing, in fact, perfect? With historic sources of transportation funding falling short and a need that’s greater than ever, necessity may be driving us toward a unique opportunity.
Next stop: transportation efficiency utilities
VEIC is taking an entirely different approach to transportation finance: a transportation efficiency utility (TEU), modeled after successful energy efficiency utilities (EEUs). In the EEU model, a system benefit charge is assessed on each rate payers’ electric bill. This money is then pooled into a common fund for the entire utility service area. These funds are used to implement energy efficiency and weatherization programs which provide direct economic benefits to individuals, communities, and regions alike, while decreasing costs on a system-wide level making the best use of current infrastructure and avoiding costly upgrades.
The transportation sector uses the second-highest share of total energy in the United States—second only to the electric power sector. Yet the programs, policies and tools used for electric energy efficiency utilities are rarely known or understood by transportation professionals. The parallels between these two industries are remarkable and with the emergence of electric powered vehicles, the need for transportation professionals to understand the history and guiding principles of the electric sector is growing. A TEU could help to quantify and standardize accounting of transportation costs and facilitate the sort of long term least-cost planning that is not possible under the current system—a maze of subsidies that grossly undervalues externalities.
Sustainability through stable funding
A TEU could be financed through a system benefit charge on regulated sources of energy: electricity and natural gas. While current penetration rates of motor vehicles using these fuels are low, the foundation for a system to develop over the next 10 to 20 years can be put in place now, and indeed should be.
The transition to an alternatively-powered fleet will be upon us before we know it, and the work to prepare for it must commence now. Given the current dearth of reliable and sustainable transportation funds, those of us with a deep knowledge of the energy efficiency industry are in a unique position to drive for innovation.
Read our in-depth exploration of the Transportation Efficiency Utility concept
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