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[Senate Report 111-334]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 621
111th Congress                                                   Report
                                 SENATE
 2d Session                                                     111-334

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 HEAVY DUTY HYBRID VEHICLE RESEARCH, DEVELOPMENT, AND DEMONSTRATION ACT

                                _______
                                

               September 28, 2010.--Ordered to be printed

                                _______
                                

   Mr. Bingaman, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 679]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 679) to establish a research, 
development, demonstration, and commercial application program 
to promote research of appropriate technologies for heavy duty 
plug-in hybrid vehicles, and for other purposes, having 
considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                Purpose

    The purpose of S. 679 is to establish a competitive 
research, development, demonstration, and commercial 
application program to advance heavy-duty hybrid vehicle 
technologies.

                          Background and Need

    The Department of Energy's Vehicle Technologies Program 
conducts research and development in a number of areas for both 
light- and heavy-duty applications. The Department's programs 
generally focus on individual technologies that could be 
applied by manufacturers; and are sometimes structured as 
commercial-partner initiatives such as FreedomCAR for light-
duty vehicles and the 21st Century Truck Partnership for heavy-
duty vehicles. These programs have aided in the development of 
a number of promising technologies that could reduce the fuel 
consumption of the transportation sector.
    Hybrid technologies can offer a range of economic and 
environmental benefits. These technologies have gained 
significant deployment in the light-duty vehicle market, but 
are often much more expensive to incorporate into heavier 
vehicle fleets. Accordingly, additional legislation is needed 
to provide for specific research and development to advance the 
commercial deployment of hybrid technologies in the heavy-duty 
segment.

                          Legislative History

    S. 679 was introduced by Senator Collins on March 24, 2009. 
The Committee on Energy and Natural Resources' Subcommittee on 
Energy held a hearing on the bill on June 15, 2010. The 
Committee on Energy and Natural Resources considered the bill 
and ordered it favorably reported without amendment on August 
5, 2010.

                        Committee Recommendation

    The Committee on Energy and Natural Resources, in an open 
business session on August 5, 2010, by a voice vote of a quorum 
present, recommends that the Senate pass S. 679.

                      Section-by-Section Analysis

    Section 1 provides a short title.
    Section 2 (a) defines terms used in the legislation.
    Subsection (b) directs the Secretary to establish a program 
to provide grants to carry out projects to advance research and 
demonstrate technologies for advanced heavy duty hybrid 
vehicles.
    Subsection (c) requires the Secretary to issue application 
requirements and to establish criteria for making grant awards. 
The Secretary must give priority to applicants who are best 
able to advance the current state of technology and achieve the 
greatest reductions in fuel consumption and emissions. Three to 
seven grants are to be awarded, with each grant limited to no 
more than $3 million per recipient per year.
    Subsection (d) defines two phases of research by award 
recipients. In phase one, each recipient has one year to build 
or retrofit one or more advanced heavy duty hybrid vehicles. 
Recipients are required to collect and analyze data on the 
performance of key vehicle components; the estimated costs of 
producing, operating, and maintaining the vehicle; the 
emissions of the vehicle; and on overall vehicle performance 
according to guidelines established by the Secretary.
    If, at the conclusion of phase one, it is clear that a 
grant recipient will be unable to complete the requirements of 
phase two, the Secretary has the discretion to waive the 
requirement for phase two research and terminate the grant to 
that recipient.
    In phase two, recipients are required to demonstrate the 
advanced manufacturing processes of heavy duty hybrid vehicles 
by producing or retrofitting 50 such vehicles within two years. 
Recipients must report on the major technological obstacles 
they encounter in developing and producing the vehicles and on 
the projected costs of each vehicle.
    Subsection (e) directs the Secretary to conduct a study of 
alternative power train designs for use in advanced heavy duty 
hybrid vehicles. The study would analyze these different 
designs under conditions in which they are typically used, 
including the average number of miles driven, the time spent 
with the engine at idle, horsepower requirements, the length of 
time the maximum power is required, and other factors the 
Secretary determines to be appropriate.
    Subsection (f) requires the Secretary to report to Congress 
within 60 days on the findings of the reports submitted by 
grant recipients.
    Subsection (g) requires the Secretary to coordinate the 
research conducted under this program with other research 
conducted by the Department.
    Subsection (h) applies the cost sharing provisions of 
section 988 of the Energy Policy Act of 2005 (42 U.S.C. 16352) 
to the program.
    Subsection (i) directs the Secretary to establish a pilot 
program through DOE's National Laboratories and Technology 
Centers to research and test the effects that plug-in hybrid 
vehicles, including heavy-duty plug-in hybrid trucks, will have 
on the domestic electric power grid.
    Subsection (j) authorizes appropriations of $16 million per 
year for fiscal years 2010 through 2012, of which $15 million 
per year must be used for the awards distributed through the 
program established by subsection (b).
    Section 3 amends the United States Energy Storage 
Competitiveness Act of 2007 (enacted as section 641(g)(1) of 
the Energy Independence and Security Act of 2007 (42 U.S.C. 
17231(g)(1)) to include vehicles with a gross weight over 
16,000 pounds in the Secretary's priorities for advanced energy 
storage.

                   Cost and Budgetary Considerations

    The following estimate of costs of this measure has been 
provided by the Congressional Budget Office:

S. 679--Heavy Duty Hybrid Vehicle Research, Development, and 
        Demonstration Act of 2009

    Summary: S. 679 would establish a grant program within the 
Department of Energy (DOE) to advance technologies related to 
heavy duty hybrid vehicles. Heavy duty hybrid vehicles are 
powered, in part, by a rechargeable energy system and weigh 
between 14,000 and 33,000 pounds. S. 679 would authorize the 
appropriation of $16 million in each of fiscal years 2011 and 
2012 for research related to the design, production, and usage 
of such vehicles and a pilot program to examine the widespread 
use of the electric grid by plug-in hybrid vehicles. CBO 
estimates that implementing the bill would cost $32 million 
over the 2011-2015 period. Enacting S. 679 would not affect 
direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    S. 679 contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: For this 
estimate, CBO assumes that S. 679 will be enacted near the 
beginning of fiscal year 2011 and that the authorized amounts 
will be appropriated each year. Estimated outlays are based on 
historical spending patterns for similar DOE programs. The 
estimated budgetary impact of S. 679 is shown in the following 
table. The costs of this legislation fall within budget 
function 270 (energy).

----------------------------------------------------------------------------------------------------------------
                                                                    By fiscal year, in millions of dollars--
                                                              --------------------------------------------------
                                                                2011    2012    2013    2014    2015   2011-2015
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Authorization Level 1........................................      16      16       0       0       0         32
Estimated Outlays............................................       9      14       7       2       0         32
----------------------------------------------------------------------------------------------------------------

    Pay-as-you-go considerations: None.
    Intergovernmental and private-sector impact: S. 679 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Martin von Gnechten; 
Impact on State, Local, and Tribal Governments: Ryan Miller; 
Impact on the Private Sector: Amy Petz.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 679.
    The bill is not a regulatory measure in the sense of 
imposing Government-established standards or significant 
economic responsibilities on private individuals and 
businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 679, as ordered reported.

                   Congressionally Directed Spending

    S. 679, as ordered reported, does not contain any 
congressionally directed spending items, limited tax benefits, 
or limited tariff benefits as defined in rule XLIV of the 
Standing Rules of the Senate.

                        Executive Communications

    The testimony provided by the Department of Energy at the 
June 15, 2010, Subcommittee Committee on Energy hearing on S. 
679 follows:

Statement of Steven G. Chalk, Chief Operating Officer and Acting Deputy 
 Assistant Secretary for Renewable Energy, Office of Energy Efficiency 
               and Renewable Energy, Department of Energy

    Madam Chairman, Ranking Member Risch, and Members of the 
Subcommittee, thank you for the opportunity to appear before 
you today to discuss proposed clean energy legislation.
    The Department and the Subcommittee share common goals of 
strengthening our economy, enhancing our national security, and 
protecting our environment. As part of the Recovery Act, the 
Office of Energy Efficiency and Renewable Energy (EERE), 
oversees a total of $16.8 billion in investments. To date, EERE 
has obligated 96 percent, or $16.07 billion, of its Recovery 
Act funds. The funds are putting America to work laying the 
foundation for our clean energy future. The Department also 
appreciates the authorities you have provided in recent years 
in the Energy Policy Act of 2005 (EPAct) (P.L. 109-58) and the 
Energy Independence and Security Act of 2007 (EISA) (P.L. 110-
140). This year, the Committee has proposed further investment 
and we thank you for all your hard work in reporting the 
American Clean Energy Leadership Act (S. 1462).
    Today, I am pleased to offer the Department's perspective 
on five pending pieces of legislation related to energy 
efficiency and renewable energy. Note that many of the 
authorities outlined in the bills would simply reinforce 
existing authorities, and may not be necessary for the 
Department to carry out the activities in question. I will 
discuss them in the order listed in the hearing invitation 
letter I received from the Subcommittee. These include the 10 
Million Solar Roofs Act of 2010 (S. 3460), the Supply Star Act 
of 2010 (S. 3396), the Improving Energy Efficiency and 
Renewable Energy Use By Federal Agencies Act of 2010 (S. 3251), 
the Heavy Duty Hybrid Vehicle Research, Development, and 
Demonstration Act (S. 679), the Gas Turbine Efficiency Act of 
2009 (S. 2900).

              s. 3460--10 million solar roofs act of 2010

    We thank the subcommittee and the sponsor of this 
legislation for your strong leadership on solar technologies 
over the years. The Department's goals for solar electric 
technologies are to be cost competitive in their respective 
markets by 2015 and to reach a high penetration of solar 
installations. The Department is investing $232 million in 2010 
to support solar research across the development pipeline, from 
basic photovoltaic (PV) cell technologies to manufacturing 
scale-up to total system development. Within the $232 million, 
DOE is investing up to $50 million in concentrated solar power 
technology development and deployment related activities and 
$23 million to understand how solar technologies can be better 
integrated within existing electricity generation and 
transmission systems. In solar hot water heating, DOE is 
investing approximately an additional $6.5 million in 2010.
    The proposed legislation incorporates several significant 
features. We believe that rebates, loan programs, and 
performance based incentives are all effective means of 
stimulating demand. Allowing states to choose between these 
incentives will enable the Act to expand existing state 
programs that have been effective in promoting solar 
installations. In addition, the states' matching funds 
requirements will leverage available federal appropriations and 
increase the resulting deployment of solar technologies, both 
of which are high priorities for the Department.
    To maximize the effectiveness of the proposed legislation, 
we would recommend two changes. First, while we support the 
state match requirement, we propose that the cost share be set 
at 50 percent to increase the potential leverage of federal 
funds. Second, the Secretary should be given the ability to 
reduce this as necessary to increase the overall effectiveness 
of the program. We also believe the program could be designed 
in a creative way such as working with municipalities to 
promote photovoltaic installations through innovative local 
programs.
    We note that by our estimates, the $250 million authorized 
for FY 2012 would yield roughly 100,000 rooftop solar systems, 
and may not be sufficient to put us on a trajectory to meet the 
goal of 10 million solar roofs. With these changes, the 
legislation could be an effective tool in increasing deployment 
of solar electricity technologies Nationwide. We note that 
existing authorities, such as the competitive portion of the 
state energy program, would allow DOE to undertake such a 
program already.

                    s. 3396--supply star act of 2010

    Supply chain energy efforts can make an important 
contribution to overall industrial efficiency and the 
competitive position of domestic suppliers. Analysis suggests 
that a large part of the carbon footprint for many consumer 
products can be attributed to the supply chain--from raw 
materials, transport, and packaging to the energy consumed in 
manufacturing processes--on the order of 40 to 60 percent.\1\
---------------------------------------------------------------------------
    \1\Source: Climate Change and Supply Chain Management, McKinsey 
Quarterly, McKinsey & Company, July 2008.
---------------------------------------------------------------------------
    The Supply Star legislation seeks to build upon existing 
best practices in the industrial community by establishing a 
voluntary recognition program that supports and promotes 
products and companies with highly energy- and resource-
efficient supply chains.
    DOE and the Environmental Protection Agency (EPA) both have 
existing initiatives that address supply chain efficiency, such 
as Save Energy Now' at DOE and the Smart Way 
Transport\TM\ program at EPA. The legislation should coordinate 
with and leverage these programs as a structure through which 
Supply Star activities could be conducted. For example, through 
its national Save Energy Now' initiative, DOE 
encourages manufacturing companies to engage their supply 
chains in energy and carbon management. Specifically, DOE 
develops processes and resources to assist companies in 
promoting energy management to their industrial suppliers and 
customers. Save Energy Now' LEADER Companies make a 
voluntary commitment to reduce their energy intensity by 25 
percent in 10 years. Many of these companies are interested in 
improving the efficiency of their supply chains as well.
    The Supply Star bill also builds upon Superior Energy 
Performance (SEP), a voluntary certification program working to 
provide industrial facilities with a roadmap for achieving 
continual improvement in energy efficiency while maintaining 
competitiveness. A central element of SEP is implementation of 
the forthcoming International Organization for Standardization 
(ISO) 50001 energy management standard, with additional 
requirements to achieve and document energy intensity 
improvements. DOE is working through SEP to bring ISO 50001 to 
the U.S. Upon its expected publication in 2011 this American 
National Standards Institute-accredited program will provide 
companies with a framework for fostering energy-efficiency at 
the plant level and a consistent methodology for measuring and 
validating energy efficiency and intensity improvements. This 
new framework will be an important tool to integrate into 
supply chain efforts.

   s. 3251--improving energy efficiency and renewable energy use by 
                      federal agencies act of 2010

    On October 5, President Obama signed Executive Order 13514 
requiring Federal agencies to set GHG emission reduction 
targets, increase energy efficiency, reduce fleet petroleum 
use, conserve water, reduce waste and promote environmentally-
responsible produce purchases by federal agencies. With this 
action, the President directed agencies to demonstrate the 
Federal government's commitment, over and above what is already 
being done, to reducing emissions and saving money.
    As a whole, the Federal government has made significant 
progress in meeting the energy requirements of EISA 2007 and 
EPAct 2005. Further progress on these efforts would be 
bolstered by S. 3251. The Department is particularly supportive 
of provisions clarifying the definition of allowable 
``renewable'' energy sources, and authorizing the creation of a 
revolving fund for Federal facility energy efficiency and 
renewable energy projects.
    The Department looks forward to working with the 
Subcommittee on legislation that would provide agencies with 
the flexibility to purchase renewable energy for appropriate 
time periods, that do not exceed asset life, create appropriate 
risk sharing between project developers and taxpayers, and that 
recognize the importance of fiscal responsibility and 
Congressional Budget Office scoring of contracts. This 
authority would provide opportunities for more on-site 
renewable power at Federal agencies and would provide strong 
support for growing our domestic clean energy economy.
    The Department's recommended definition of renewable energy 
follows the definition in section 203 of EPAct 2005, with an 
additional recommendation to allow for both electric energy and 
thermal energy from renewable sources. It is very important to 
allow thermal energy to count as renewable energy, particularly 
because renewable thermal energy sources such as ground source 
heat pumps are often the lowest-cost option for displacing 
purchased energy and are already widely deployed. This approach 
contrasts with the current definition which is limited only to 
``renewable electricity,'' a definition that reduces incentives 
for this valuable and cost-effective form of renewable power.
    The Department fully supports the creation of a revolving 
loan fund based on best practices and subject to appropriate 
interest rates for Federal facility energy efficiency and 
renewable energy projects. There is considerable experience and 
success at the state and local level with using revolving loan 
funds to assist innovative projects to improve energy 
efficiency. In addition, there is Federal experience with a 
similar concept within the General Services Administration 
(GSA) that funds agency relocations, and agencies reimburse the 
fund at slightly above costs to gradually increase the amount 
of funds available for lending.
    Federal agencies are already responding to the requirements 
of EISA Section 432 to survey their facilities for potential 
energy efficiency and renewable energy upgrades, as well as to 
complete energy audits and to report on measures taken. The 
Department recommends that the renewable energy facility 
surveys called for in S. 3251 Section 5 should be included as a 
modification of EISA Section 432.
    DOE's Federal Energy Management Program is already at work 
implementing provisions similar to the Federal energy 
management and data collection standard called for in S. 3251 
Section 7. As required under EISA Section 432, DOE will publish 
overarching guidance for implementation of all Section 432 
requirements in 2010. The Department is also developing a web-
based tracking system for facility-level energy data and 
identified or implemented energy conservation measures per 
EISA. Tasking the GSA to deploy a similar publicly-available 
resource with facility-level energy data would create 
redundancy as the Department's compliance tracking system will 
be deployed for use by all agencies in July 2010.

     s. 679--heavy duty hybrid vehicle research, development, and 
                           demonstration act

    The program authorized by S. 679 would complement several 
of the Department's current activities focused on increasing 
vehicle energy efficiency. One of those programs is the 
SuperTruck Program, in which DOE is seeking to improve the 
freight hauling efficiency of Class 8 trucks by 50 percent. 
Other complementary efforts underway include: (1) the 
development of hybrid school bus technology; (2) research, 
development, and demonstration of medium-duty utility bucket 
trucks and passenger shuttles using a plug-in hybrid electric 
system; and (3) other medium and heavy duty truck deployment 
activities supported by our Clean Cities program. S. 679 has 
the potential to increase the fuel economy attainable by 
vehicles in this sector.
    There are several technical definitions and reporting 
requirements about which we would like to seek clarification, 
and the Department looks forward to working with the 
subcommittee on those provisions.

              s. 2900--gas turbine efficiency act of 2009

    The Gas Turbine Efficiency Act would establish a research, 
development, and technology demonstration program to improve 
the efficiency of gas turbines used in combined cycle and 
simple cycle power generation systems.
    The Department believes that industry has economic 
incentives to invest in research, development and demonstration 
to increase the efficiency of gas turbines. To the extent that 
the private sector underinvests in basic research, DOE has 
sufficient authority and existing programs to improve high 
temperature materials applicable to a range of energy 
technologies.
    The bill is similar to an existing successful program 
within DOE. The Advanced Turbine Systems Program, a research, 
development and demonstration collaborative between the 
Department's Offices of Energy Efficiency and Renewable Energy 
and Fossil Energy, successfully developed and deployed advanced 
turbine material and coating leading to today's turbine 
efficiencies.
    The legislation outlines activities DOE already performs. 
For example, through its Industries of the Future 
(crosscutting) investments, DOE's Industrial Technology Program 
(ITP) aids the development of advanced manufacturing processes 
for the expanded use of lightweight materials such as titanium. 
Those breakthroughs help to drive production cost down and 
market impact up. In other efforts, ITP promoted advanced 
alloys of steel to support many of the new clean energy 
products being developed today. Nanocoating technologies are 
still another group of innovations developed with the 
assistance of ITP that now extend the life of tooling systems 
and provide wear resistance to reduce the cost of manufacture 
and extend the useful life of products. All of these efforts 
support the overarching objective of reducing the energy 
intensity of Industry to help advance the Administration's 
energy security and environmental performance goals.
    The Department is committed to continuing research of high 
temperature materials which will help industry develop more 
efficient energy technologies. Meanwhile, the private sector 
has economic incentive to invest in the development and 
demonstration of efficient gas turbines. Therefore, private 
sector work on later stages of efficient natural gas turbine 
development and demonstration will likely be conducted without 
the need for additional funding authorizations beyond that 
already in place.
    In conclusion, the Department of Energy thanks the 
Subcommittee for the opportunity to comment on these proposed 
initiatives. We look forward to working with Congress to 
develop strong, effective clean energy policy to ensure U.S. 
leadership on these global issues and in the clean energy 
economy.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill S. 679, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

        UNITED STATES ENERGY STORAGE COMPETITIVENESS ACT OF 2007

 (Section 641 of the Energy Independence and Security Act of 2007; 42 
U.S.C 17231)

           *       *       *       *       *       *       *

SEC. 641. ENERGY STORAGE COMPETITIVENESS.

    (a) Short Title.--This section may be cited as the ``United 
States Energy Storage Competitiveness Act of 2007''.

           *       *       *       *       *       *       *

    (g) Applied Research Program.--
          (1) In general.--The Secretary shall conduct an 
        applied research program on energy storage systems to 
        support electric drive vehicles, vehicles with a gross 
        weight over 16,000 pounds stationary applications, and 
        electricity transmission and distribution technologies, 
        including--
                  (A) ultracapacitors;
                  (B) flywheels;
                  (C) batteries and battery systems (including 
                flow batteries);
                  (D) compressed air energy systems;
                  (E) power conditioning electronics;
                  (F) manufacturing technologies for energy 
                storage systems;
                  (G) thermal management systems; and
                  (H) hydrogen as an energy storage medium.

           *       *       *       *       *       *       *

                                  
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