Dual Fuel Vehicles. Ghyslaine Lepage, QC Glenn Boyette, MS Gary Bennion, Con-Way

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1 Dual Fuel Vehicles Ghyslaine Lepage, QC Glenn Boyette, MS Gary Bennion, Con-Way

2 In Quebec 2010 Request from one company for decals for 3 vehicles using LNG and diesel. - What is a dual fuel Vehicle? - How does it work? - How are we going to enter data in our system? - How should the client complete the IFTA return? Many questions back then

3 In Quebec - Answers What is a dual fuel vehicle? Special thanks to CA and internet who provided information. How does it work? These vehicles need diesel to start the ignition and then they use LNG for motive power. How is Quebec going to enter the data in our system? In order to be acceptable by the system and have no impact on the KPL (Kilometer Per Liter), the client receives an additional IFTA number (change the last digit). An additional license and decals were issued.

4 In Quebec - Answers How should they complete the IFTA return? Client stated that the truck needs only 5% of diesel to start ignition, so he was reporting 5% of the distances under diesel and 95% under LNG. Analysis of the data proved the ratio was closer to 10% and 90%. Since 3Q2013, the clients are now filing the returns by prorating the distances and all the fuel used, as suggested by the Dual Fuel Working Group.

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7 In Quebec, it continues 2011 The same company now has 23 vehicles There are now 3 companies, one with 70 vehicles, one with 10 and the other one with 5 vehicles We have 7 companies using almost 200 LNG and diesel trucks. Travel occurred in ON and QC where LNG is not taxable. One company travels to NB and pays the taxes. We also have 2 other companies with propane and diesel trucks. They travel in a few jurisdictions.

8 In Quebec, it continues 2014 We have 11 companies registered with dual fuel vehicles (total of 164 vehicles). 3 companies have propane and diesel vehicles the other companies are using LNG and diesel in QC, ON and NB We will see.

9 In Quebec, some figures for 1Q2014 LNG AND DIESEL 8 Companies KPL = % of the distance and fuel were diesel, 88% of the distance and fuel were LNG Total distance was over 4.8 million kms and 2.3 million liters of fuel. PROPANE AND DIESEL 3 Companies KPL = % of the distance and fuel were diesel, 13% of the distance and fuel were propane Total distance was around 125,000 kms with 57,000 liters of fuel.

10 In Mississippi Mississippi has 8 carriers with dual fuel vehicles. 40 vehicles LP/DI GVW less than 40,000 lbs. Vehicles main use: delivery of propane to homes, businesses with no access to natural gas, farmers

11 In Mississippi (continued) Dual fuels are used at startup, and the on board computer changes fuel usage seamlessly between fuels when the truck is under a load. Under a load means the truck needs extra BTU s generated by diesel fuel to climb hills, possibly when pulling off from a dead start, etc. LP (liquefied propane) is used for idling and unloading and when traveling empty.

12 Mississippi Unique problems: The LP fuel is obtained from the same fuel tank as the product being sold. Measurement takes place between metered gallons loaded and metered gallons sold. All other gallons are road use. These gallons are paid on the Mississippi Compressed Gas Return.

13 Mississippi All diesel fuel for these fleets is purchased at retail service stations (tax paid gallons). We are like Quebec, the taxpayer would have to have two fleets for IFTA if they had trucks with only diesel and trucks with dual fuel. Mississippi just passed legislation accepting the diesel gallon equivalent of 6.06 lbs for LNG vehicles effective July 1, 2015.

14 Remaining Problems How should we publish the fuel tax rate for these alternate fuels? For 2Q2014, LNG is taxable in 40 jurisdictions and CNG is taxable in 42 jurisdictions. The footnotes tell us how to convert many different ways.

15 Remaining Problems (Cont d) How should the purchases be reported on the fuel return Diesel Liter Equivalent (DLE) Gasoline Liter Equivalent (GLE) British Thermal Unit (BTU) Equivalent Cubic Meter Energy content

16 Ballots Ballot 2013 #3 for CNG (effective July 1 st, 2015) R222 Gallon of compressed natural gas means a quantity of compressed natural gas equal to cubic feet of natural gas at 60 degrees Fahrenheit and one atmosphere of pressure. In the alternative, it means a quantity of compressed natural gas that weighs 5.66 pounds. R237 Liter of compressed natural gas means a quantity of compressed natural gas equal to 1.0 cubic meters of natural gas at 15 degrees Celsius and one atmosphere of pressure. In the alternative, it means a quantity of compressed natural gas that weighs kilograms.

17 Ballots Proposed Short Track Ballot 2014 #5 for LNG - it continues the process P1320 For IFTA reporting and transmittal purposes, the use of liquefied natural gas shall be reported in energy equivalent measures (i.e., a diesel gallon equivalent in U.S. jurisdictions weighs 6.06 pounds, and a diesel liter equivalent in Canadian jurisdictions weighs kilograms).

18 Examples of different rates in USA and Canada

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20 Questions? THANK YOU for your attention!

21 Ghyslaine Lepage IFTA Administrative Asst. QC Revenu (418) Gary Bennion Manager Operating Tax Con-way Inc. (503) Glenn Boyette MS Dept. of Revenue Bureau Director (601)