503 W Franklin St Boise ID September 21st, 2017

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1 503 W Franklin St Boise ID September 21st, 2017 Tiffany Floyd Air Quality Division Administrator Idaho Department of Environmental Quality 1410 N Hilton Boise, ID Dear Ms. Floyd, The Idaho Chapter Sierra Club is writing to urge you to take full advantage of the $17.3 million dollars in funding from the Environmental Mitigation Trust (EMT), created as a part of the recent Volkswagen Settlement, to invest exclusively in electric vehicles (EVs) and charging infrastructure. Strategic state planning around these funds for the electrification of Idaho s transportation sector will mean less money sent out of state for oil, more in-state jobs, better vehicles for Idahoans, less pollution, cleaner and healthier air particularly for those most impacted by air pollution. The Department of Environmental Quality (DEQ) is the expected beneficiary in Idaho and will be charged with creating a plan for spending EMT funds to support different transportation programs throughout the state, including allocations earmarked for infrastructure spending to the Office of Energy and Mineral Resources. We strongly recommend that these funds be used entirely to advance electric vehicles infrastructure and adoption. Sierra Club suggests that DEQ prioritizes EMT funding based on the criteria established in the Consent Decree and additional parameters that we believe will maximize the scope of benefits realized throughout the state: Each Beneficiary shall submit and make publicly available a Beneficiary Mitigation Plan that summarizes how the Beneficiary plans to use the mitigation funds allocated to it under this Trust, addressing 1 : (i) the Beneficiary s overall goal for the use of the funds; maximum NOx reduction prioritize air quality benefits to locations with the highest air quality challenges (ii) the categories of Eligible Mitigation Actions the Beneficiary anticipates will be appropriate to achieve the stated goals and the preliminary assessment of the percentages of funds anticipated to be used for each type of Eligible Mitigation Action; In addition to this Consent Decree criteria, we advocate that the DEQ frame project priorities with these additional considerations: improve the overall market and the widespread adoption of electric vehicles in Idaho to maximize the positive externality of long term emission reductions reduce fuel and maintenance costs for vehicle owners/operators ensure the public benefits from the program as opposed to private entities Considering the above criteria, the Sierra Club recommends that DEQ funds projects in the following priority areas: 1 Consent Decree Appendix D, Page 9

2 We recommend DEQ allocate 15% of the total to building out statewide DC Fast charging infrastructure. Encouraging adoption of light duty EVs will provide additional NOx reductions. Building a statewide infrastructure for fast charging is a necessary to encourage widespread EV adoption. DEQ should coordinate with the Idaho DOT, electric utilities, and potential charging infrastructure hosts to avoid duplication and strategically plan investments that facilitate statewide electric vehicle transportation. Efforts should be guided by the work already completed by Idaho Power and partners that lays out tiered priorities for initial investments in a statewide DC fast charging network. We recommend the State Beneficiary Plan focus the remaining 85% of the total on electrification of public school buses, shuttles and public transit. Diesel school buses are a leading source of NOx emissions. They tend to operate in areas with the worst air quality generally, and locally increase emission exposure to children. Market proven zero emission buses can lock in annual savings on fuel and maintenance to bring measurable economic and environmental benefits to the communities they service. Buses are also prominent vehicles, so they serve an educational role as a billboard to promote the market for EVs generally (iii) a description of how the Beneficiary will consider the potential beneficial impact of the selected Eligible Mitigation Actions on air quality in areas that bear a disproportionate share of the air pollution burden within its jurisdiction; We recommend DEQ incorporate expected emission reductions attributable to the electrification of public school buses, shuttles and public transit and charging infrastructure into air quality modeling in air sheds most impacted by air pollution. Projections for reductions should include the potential of each project to spur further adoption of clean transportation vehicles. For example, electric bus projects should include projections for future adoption of additional electric buses, shuttles and public transit vehicles based on the potential for long-term maintenance/fuel savings to be leveraged into additional purchases and the comparable pricing of electric buses when charging infrastructure already exists. and (iv) a general description of the expected ranges of emission benefits the Beneficiary estimates would be realized by implementation of the Eligible Mitigation Actions identified in the Beneficiary Mitigation Plan. We recommend DEQ work with the Idaho National Lab and Center for Advanced Energy Studies and additional technical community partners to quantify the range of emission benefits. The Beneficiary Mitigation Plan need only provide the level of detail reasonably ascertainable at the time of submission. Additionally, we advocate against: Diesel and/or Alternative Fueled (e.g. CNG, propane, Hybrid) vehicle upgrades- although these options are available for partial funding, electric vehicle upgrades for government vehicles are fully funded through the settlement and provide greater NOx reductions. Focusing on electrification allows the Department of Environmental Quality to cover 100% of the cost and increase the likelihood that Idaho will realize sustained NOx emission reductions. Further, focusing on electric vehicles reduces Idaho s reliance on out of state fuels, increasing our energy independence and strengthening our local energy economy. Thank you for your attention and we look forwarding to working with you on crafting a State Beneficiary Mitigation Plan plan that will provide the most benefit for everyone in Idaho. Attached to this letter we have provided expanded and annotated explanations for our proposed funding criteria and priority areas. If you have any questions or require any other information, please do not hesitate to contact us. Sincerely, Casey Mattoon Conservation Program Manager Idaho Chapter Sierra Club

3 Idaho VW Settlement Environmental Mitigation Trust Funds The Department of Environmental Quality is the expected beneficiary of the $17.3 million dollars that will be allocated to the state of Idaho, with $16.2 million in 2.0-liter diesel and $1.1 million in 3.0-liter diesel EMT Funds. The Idaho DEQ has also indicated they are exploring the use of the Trust Funds for their non-federal voluntary match through the Diesel Emission Reduction Act (DERA), potentially increasing the amount of funding available 2. This presents an incredible opportunity for Idaho to invest in cleaning up and modernizing our transportation sector. The DEQ will be charged with creating a plan for the Idaho EMT funds. The plan must state an overall goal, identify the Eligible Modification Actions, take into account air quality in areas that bear a disproportionate share of pollution, and describe emission benefits realized upon implementation. There are ten eligible vehicles and equipment options, as well as three eligible replacement technologies on which the EMT funds can be spent. In crafting a plan for the spending of settlement funds, the main goal should be the reduction of negative impacts the transportation sector inflicts upon Idahoans. Funding decisions should focus on maximizing their impact, Idaho should prioritize mitigation projects based on the following criteria 3 : NOx reduction The VW Settlement Funds are based on a violation of the Clean Air Act for NOx emissions from diesel vehicles, and thus programs that have the maximum ability to mitigate NOx pollution should be given top priority. This would be an evaluation of the number of vehicles and emissions per vehicle. Minimize human risk/exposure Analysis should include the location, hours of operation, and daily routes of fleet in relation to population densities in where elevated concentrations of NOx occur. Additionally, programs should give special consideration to groups facing the greatest risk from ground level ozone pollution (people with heart or lung disease, older adults, children, and people with heart or lung disease). A new report from Environment America Research & Policy Center around clean air also identifies several cities and counties in Idaho that face high levels of air pollution that are linked with NOx emissions 4. High cost-effectiveness (across the life of the vehicle) All decisions about investment regarding any vehicles should be based upon an analysis of the lifetime costs of the vehicle to ensure maximum lifetime savings. It is crucial that decisions are not made based upon upfront costs, but rather the lifetime costs that will be incurred throughout the operation of the vehicle, including fuel and maintenance. Measurable market impact The opportunity to transform and scale a new market considering the existing inventory mix and useful life to the equipment. 2 Idaho Department of Environmental Quality. 3 Environmental Law & Policy Center 2017, 4 Environment American Research & Policy Center Our Health at Risk: Why are Millions of Americans Still Breathing Unhealthy Air, April 2017,

4 Based on these basic criteria for the use Trust Funds in the state of Idaho, we advocate for a State Beneficiary Mitigation Plan that prioritizes the following elements: 1. Ramp up EV infrastructure by spending the maximum allowed (15 percent of total) on statewide DC fast charging infrastructure: The Department of Energy egallon tools calculates that driving in Idaho on electricity cost $1.04 per egallon as opposed to the $2.61 per gallon for gasoline 5. Studies have concluded that the absence of an adequate, existing charging infrastructures for light duty electric vehicles is an impediment to rapidly increasing EV adoption 6. Additionally, a financial subsidy given to infrastructure investment will increase EV sales by more than twice the amount of the increase if the financial invective is provided for EV purchase 7. The DEQ should spend the full 15 percent allowed for charging infrastructure, and concentrate on programs that electrify highways as a first priority. Highways Lack high speed direct current (DC) charging infrastructure on highways inhibits the value, utility, and sales potential for pure-battery electric vehicles 8. Fast charging stations typically provide electric vehicles with charging times of less than 30 minutes, expanding the reasonable travel distances for all electric vehicles between long distances. EMT funding should focus on DC charging infrastructure that would create connectivity with utility proposed projects throughout Idaho to enable inter-city and long-distance travel that is otherwise impractical or impossible for all-electric vehicle drivers. The Department of Energy selected Rocky Mountain Power to deploy 1,500 miles of electric corridors, including I-84 and Id-15 in Idaho 9. Additionally, Idaho Power worked with several community partners on proposals for installing electric infrastructure along the highway and has identified several locations on three different priority tiers. The proposal for DC fast charging infrastructure siting is based on building out state transportation corridors with stations every 50 miles to facilitate electric vehicle travel statewide. A full map can be seen in appendix A. The DEQ and OEMR can leverage the full 15% of EMT funds to build upon work already being done and substantially improve the utility and increase adoption of electric vehicles in Idaho. If the beneficiary decides to invest in an array of infrastructure projects, we suggest that they limit the scope of additional infrastructure projects to electric vehicle charging infrastructure for multi-unit dwellings and workplaces. Multi-Unit Dwellings Drivers are unlikely to purchase an EV if they cannot charge at home, therefore residences without access to charging have to overcome significant barriers to make EV ownership 5 US Department of Energy, updated September , last accessed September 21, International Energy Agency, Technology Roadmap: Electric and Plug-In Hybrid Vehicles, June 2011, National Academy of Sciences, Overcoming Barriers to Deployment of Plug-In Electric Vehicles, April Li S et al, The Market for Electric Vehicles: Indirect Networks Effects and Policy Design, Cornell University PlugShare, New Survey Data: BEV Drivers and the Desire for DC Fast Charging, March Denardi, Kate. Utah, Wyoming, and Idaho Secure Funding for Electric Vehicle Infrastructure, January 2017,

5 practical 10. Large multi-unit dwelling and parking lot owners/operators may lack sufficient incentive to spend the capital to install chargers, therefore many people living in concentrated urban areas and apartment buildings lack access to off-street parking and thus charging infrastructure. EMT funds can overcome unique barriers to access infrastructure faced by residents of multi-unit dwellings by subsidizing their installation costs. Workplace Research shows that people that have access to workplace charging are 20 times more likely to be EV owners 11 and that charging at workplaces increases electric miles driven 12. Idaho Power ran a very successful workplace charging program in , but there is still an incredible amount of work that can be done to expand on the market impact and emissions reduction opportunities from workplace charging. Use of EMT Funds for light-duty vehicle charging infrastructure should be conditioned on time of use rates or some other load management tool. Doing so would incentivize EV charging at off peak times or during renewable energy generation peaks, providing the benefits of increased operational efficiency of the existing grid by filling off-peak valleys, balancing intermittent generation, and allowing grid costs to be spread over a larger sales base. Research from the Department of Energy s EV Project demonstrates that time of use rates coupled with utility outreach, can effectively shift EV charging to off-peak hours 14. Thus we assure we are achieving the greatest overall emissions reduction with the electrification of our transportation sector that will result in benefits for all ratepayers. 2. Outfit schools, shuttles and public transit with electric buses with remaining funds (85 percent of total): The lifetime cost of an electric bus is significantly lower than that of a new diesel or alternative fuel bus, though the upfront purchase cost is higher. One of the reasons for higher cost, aside from issues of limited manufacturing that increases price point, is electric buses require charging infrastructure. The recommended technology is a class 3 slow charger, which will fully charge a bus in 3-5 hours and cost around $65,000 including purchase and installation 15. However if we consider the all-in cost of buses (including purchase, fuel costs and maintenance costs), electric buses are around $1,000,000 while diesel and CNG buses have substantially higher costs of $1,4000, By using EMT fund to procure zero emission buses now, our transit agencies and schools can lock in annual savings on fuel and maintenance. Zero emission buses are more fuel efficient than diesel buses, providing annual fuel savings ranging from $40,000-$45,000 per year per bus over diesel. A report published by the National Renewable Energy Laboratory in February 2016 concluded that battery-electric buses can be nearly four (4) times more fuelefficient than comparable compressed natural gas (CNG) buses battery-electric buses had about National Research Council of the National Academies of Sciences, Overcoming Barriers to the Deployment of Plug-Ion Electric Vehicles, the National Academies Press U.S. Department of Energy, Workplace Charging Challenge Process Update 2014: Employers Take Charge, 5 (2014), 12 National Research Council of the National Academies Press, Idaho Power Company, 14 Schey, et al, A First Look at the Impact of Electric Vehicle Charging on the Electric Grid, The EV Project at EVS26 (May 2012). 15 Proterra Catalyst Bus Specifications, Aarian Marshall, This New Electric Bus Can Drive 350 Miles on One Charges, Wired, September 2016, 16 The Business Case for the Proterra Electric Bus, August 2015,

6 miles per diesel gallon equivalent while CNG buses only had 4.51 miles per diesel gallon equivalent 17. Based on the national average for electricity prices ($.12/kWh) all-electric buses consume about $5,000- $10,000 in electricity annually, far lower than the $50,000 per year spend on diesel or the $30,000 per year spent on CNG fuel 18. Electric buses also present measurable benefits in maintenance costs. Electric buses have been observed to log 133,000 miles between maintenance, compared to compressed natural gas buses that logged on average about 45,000 miles between maintenance. The average lifetime maintenance cost for an electric bus is just $.60 per mile, a significant reduction from the $.85 per mile associated with diesel and CNG fueled vehicles 19. Government estimates of zero emissions bus prices sharply decline as advances in battery manufacturing and increased demand drive down costs. Leveraging the state EMT fund presents a remarkable opportunity to advance a new market for schools and transit agencies by reducing the uniquely high purchasing cost of electric vehicles to capture lifetime economic benefits these buses provide. As those savings are realized over the lifetime of the vehicle, it will free up budget space for additional investment in electric buses and vehicles. By within the timeframe of the VW EMT grant program- an electric bus is expected to cost about $480,000, equal to or less than the cost of a new diesel vehicle 20. The electric bus revolution is playing out in cities and counties across the world. From Florida to California, Utah to Hawaii, we are seeing the widespread adoption of electric buses for public transit that offer the perfect blend of economic and health benefits motivating planners to think differently about the future of transportation 21. In addition to questions around benefits, an electric bus in Indiana just definitively settled the questions of range by breaking a world record and traveling over 1,000 miles on a single charge 22. School Buses Electric buses stand out among the highest impact eligible category. The VW Settlement vehicle options stipulates that 2009 or older class 4-8 school buses type A-D are eligible for funding. Idaho currently has 2,700 school buses that service school districts and charter schools throughout the state that travel over 28,000,000 miles annually 23. Pilot projects for school bus electrification have been implemented and demonstrated to be successful in municipalities throughout the country including in Massachusetts, California, and Minnesota to among others 24. School buses are ideal fits for electrification. Buses typically operate two shifts each day, once in the morning and again in the afternoon. Down time between shifts allows buses to fully recharge. Several manufactures are already producing or have 17 U.S. Department of Transportation, Zero Emission Bus Benefits, 2016, 18 California Air Resources Board, Technology Assessment: Medium and Heavy-Duty Battery Electric Trucks and Buses, IV-5, October Air Resources Board Cost Model, slide Air Resources Board Cost Model, slide 10 (all values in 2016 dollars) BBC News, September State Department of Education, 24 Environmental Law & Policy Center 2017.

7 announced all-electric, zero emissions buses including Proterra, Lion Bus, and Blue Bird among others 25. Electric school buses present a unique opportunity to drastically reduce NOx for one of our most vulnerable populations, students. Diesel bus exhaust contains over 40 contaminants, including NOx, which are incredibly harmful to a child s developing lungs. The average diesel bus produces over 20,000 pounds of NOx of 12 to 14-year life cycle. Nationally, buses average 85 stops per day, translating to high pollution exposure for our children. Asthma is most common chronic disease for children and the leading cause of school absenteeism 26. Electric buses have the ability to eliminate the impacts around harmful emissions, reducing health risks for our young populations and ensuring cleaner air. 3. Additionally, we advocate against diesel and/or Alternative Fueled (e.g. CNG, propane, Hybrid) vehicle upgrades. Although these options are available for partial funding, electric vehicle upgrades provide more benefits: a) keep energy dollars in state; b) grid benefits that result in rate payer savings; c) create in-state jobs; d) reduce fuel and maintenance costs; d) drastically reduce NOx, smog and greenhouse gas levels. If the DEQ selects projects that focus on fleet conversions (either light-duty or trucks), we strongly recommend that all funded vehicles be electric. Our state spends an enormous amount, $56,600,000 annually, on the purchase of petroleum for transportation 27. Oil prices fluctuate greatly and 80 percent of money spent on these fuels go to on crude oil and refineries 28. This enormous amount of money spent of transportation fuel does not support energy production in our state, a lost opportunity for both job creation and the capturing of economic benefits derived from a downward pressure on electricity rates that creating a larger customer base 29. Electrifying our transportation as opposed to alternative fuels also saves residents and businesses money on their annual fuel costs. Research from the Department of Energy shows that when compared with a gasoline surrogate, it costs about half as much to drive an electric vehicle. This is especially important in Idaho, where gas prices are consistently higher than the national average and our electricity is some of the cheapest in the nation, resulting in a 86% price difference for a gallon of gas as opposed to an electric gallon 30. Electric trucks are currently being used for localized/urban delivery and goods/services across the US (Frito-Lay, Fed-Ex, UPS, Staples, etc.), driving massive reductions in NOx, PM and CO2 while providing more than 22% lifetime fuel and maintenance savings 31. Light-duty electric vehicles are already being incorporated into government and business fleets across the state as entities seek to reduce their fuel and 25 Proterra, California Governor s Office of Business and Economic Development, 2017, us-west-2.elb.amazonaws.com/Newsroom/ArticleId/14/officials-from-go-biz-and-quebec-unveil-all-electric-school-bus-in-palo-alto; Blue Bird 2017, 26 Idaho Department of Health and Welfare, healthandwelfare.idaho.gov/portals/0/health/disease/idahoasthmaneedsassessment.pdf 27 U.S. Energy Information Administration How much oil is consumed in the United States? 28 U.S. Energy Information Agency Rocky Mountain Institute, Electric Vehicles as Distributed Energy Resources, 2016; National Resources Defense Council, Driving Out Pollution: How Utilities Can Accelerate the Market for Electric Vehicles, Department of Energy 2016, 31 Doing-Yeon Lee, et al., Electric Urban Delivery Trucks: Energy Use, Greenhouse Gas Emissions, and Cost Effectiveness, Environ. Science and Tech. 47, 8022 (2013).

8 maintenance costs, as well as polluting emissions. All fleet based funds should further the adoption of electric LDV and medium trucks in order to achieve NOx reductions and provide maximum air quality benefits, realize lower lifetime costs to increase savings, and advance a new transportation technology to uniquely affect the market in Idaho. Conclusion The Idaho Department of Environmental Quality should create a state EMT plan that allocates 15 percent of the total funds to electric vehicle charging infrastructure and the remaining 85 percent on zero emission buses. Investments in this equipment and technology will speed further integration as electric vehicles come to scale. Leveraging the EMT funds on these basic elements will ensure Idaho is achieving the maximum reduction of harmful pollutants, support the development of a new market by reducing the unique barriers faced for electric bus adoption, all while providing economic, health and environmental benefits to Idaho residents. If fleet vehicles are considered, electrification should be prioritized.

9 Appendix A: Statewide DC Fast Charging Proposed Locations Map developed by Idaho Power Company, Treasure Valley Clean Cities Coalition, and a variety of different stakeholders.

10 Appendix C: Air Pollution in Idaho Environment America Research & Policy Center. Our Health At Risk: Why Are Millions of Americans Still Breathing Unhealthy Air? April 2017.