After a long and circuitous route to passage, the U.S. now has a new bipartisan infrastructure law, and there is a lot in this law of interest to convenience and fuel retailers. It will fund traditional highway programs, including roads and bridges throughout the nation, as well as broadband deployment, clean water programs, public transit, airports, ports, electricity transmission and grid updates, and clean-up funds for sites with pollution.
"These are funds that retailers may be able to use to help fund their own investments in alternative fueling."
For the convenience industry, one of the new programs in the law is the $7.5 billion alternative fueling infrastructure grants program, which includes funding for electric vehicle (EV) charging, hydrogen and natural gas. These are funds that retailers may be able to use to help fund their own investments in alternative fueling. But, how the Transportation and Energy departments design the programs will make a real difference in how helpful the funds are and how retailers might be able to access them. The U.S. Department of Transportation (DOT) is seeking input on how to administer these new programs and what criteria will be used to best distribute these funds. Comments are due by January 28, 2022, and background on information the department seeks can be found here: https://bit.ly/3rTMJO4.
There are a few things we know already. The law includes an EV charging program whereby funds will be directed to the states to distribute for the following:
- Acquisition and installation of EV charging infrastructure
- Operation and maintenance of EV charging infrastructure
- Data sharing about EV charging infrastructure to ensure success of investments under the program
The EV charging program funds are slated to go to the private sector as long as the completed projects will be open to members of the general public as customers—or to commercial motor vehicle operators from more than one company. The federal share of a project can be up to 80% of the cost. Projects must also be located along designated alternative fueling corridors, and the DOT will further define how to make those determinations before releasing funding to the states.
States will have to provide written plans to the DOT laying out how they plan to use the funds. Retailers should engage with their states now to ensure that collaborative projects with the private sector are a prominent part of their states’ plans.
The bill also includes a Charging and Fueling Infrastructure Program. Under that program, the federal government will award grants for infrastructure projects involving EV, hydrogen, propane or natural gas fueling. The grants will initially go to states, localities, state or local transportation authorities, Indian tribes or U.S. territories, but those entities must use the money to contract with the private sector to develop these alternative fueling projects.
Half of the Charging and Fueling Infrastructure Program funds must also be used along designated alternative fueling corridors, and the other half is designated for projects in communities that need them. The program will prioritize projects in rural areas, low- and medium-income areas and areas with either a low ratio of private parking spaces to households or a high ratio of multiunit households to single-family homes. These grants will also look at how well they would enhance geographic diversity of alternative fueling options and how well they meet current and anticipated future needs for alternative fueling. The Charging and Fueling Infrastructure Program can also fund up to 80% of the cost of a project.
Importantly, the law requires DOT to take into account the private sector and the presence of current fueling infrastructure, as well as current EV charging infrastructure when making grant decisions. These are key pieces of the instructions Congress gave to DOT and should help it guide the states and make decisions that foster robust private market investment and competition. While the public funds available are substantial, there is a risk that such funds would undercut private investment and ultimately result in less infrastructure than would be built without any public money. Hopefully, the direction that Congress provided will prevent that outcome and instead catalyze private investment.
This is your chance. People in the industry should take the opportunity to tell the DOT that facilitating the private sector is the most advantageous way to spend these funds and ensure that they are fully leveraged. And you should work with your states and localities to get ready to claim funds from these programs and build new infrastructure to serve your customers.
Remember, $7.5 billion won’t come knock on your door and jump in your pocket. Retailers who want access to the funds need to make plans and ask for them. The NACS government relations team is here to help you and will continue to provide you with the necessary information to help navigate this opportunity.