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Speed Bumps for Govt's Hybrid Vehicle Buys?

By Ed O'Keefe

Hybrid vehicles similar to this Toyota may soon find their way to the parking lots of federal agencies. (Getty Images)

Updated 12:42 p.m. ET

The General Services Administration this week ordered roughly 14,100 fuel-efficient vehicles from the (big?) three U.S. automakers, spending $210 million in economic stimulus funds to replace aging gas-guzzlers. That's in addition to an April order for more than 3,000 hybrids, or vehicles that use a combination of gasoline and electric batteries.

House Speaker Nancy Pelosi weighed in on the big buy, calling it "good for our economy, good for our workers, and good for our environment."

Before all those cars make their way to government parking lots, officials may want to read a new Government Accountability Report (pdf) that predicts several speed bumps as agencies start using plug-in hybrids.

The federal government has tried to make better use of fuel-efficient vehicles since the early 1990s, but has never really developed a coherent strategy that addresses important details, including who can use them, when, where and how. Lawmakers requested this latest GAO report more than a year ago, well before the Obama administration committed to buying thousands of hybrid vehicles, both to benefit the environment and boost the sagging auto industry.

Though "Increasing the use of plug-ins could result in environmental and other benefits," the report notes that "To incorporate plug-ins into the federal fleet, agencies will face challenges related to cost, availability, planning, and federal requirements. Plug-ins are expected to have high upfront costs when they are first introduced."

The GAO suggests that the operational costs of a plug-in might one day fall to match the cost of gasoline vehicles -- but only if battery prices fall to match (rising) gasoline prices (a highly speculative "if" at this point).

In her statement, Pelosi lauded the hybrid vehicle purchases, noting they would increase the fuel efficiency of the federal fleet.

But the GAO report warns that government agencies still need to figure out how hybrids will impact their overall energy usage. "Plugging vehicles into federal facilities could reduce petroleum consumption but increase facility energy use," the report states, suggesting that even if an agency's gasoline consumption drops, the plug-ins will drive up electricity usage.

The GAO's biggest concern however is that the "federal government has not yet provided information to agencies on how to set priorities for these requirements or leverage different types of vehicles to do so. Without such information, agencies face challenges in making decisions about acquiring plug-ins that will meet the requirements, as well as maximize plug-ins’ potential benefits and minimize costs."

The report urges the Department of Energy, Environmental Protection Agency, GSA and Office of Management and Budget to work together to develop a plan. Some agencies may also want to explore leasing directly from auto manufacturers or dealers if it makes more economic sense, according to the report.

By Ed O'Keefe  | June 10, 2009; 10:47 AM ET
Categories:  Agencies and Departments  
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