A portal website bringing together vital information about natural gas and natural gas vehicles.
Kentucky Policy Data
Kentucky offers promotion, R&D & commercialization grants and investment funds for alternative fuels via the Kentucky New Energy Ventures group, and through the Kentucky Department for Energy Development and Independence.
The state passed an initiative to replace at elast 50% of its fleet vehicles with energy-efficient vehicles to include AFVs. State legislation and programs put emphasis on "synthetic" natural gas.
Sales of natural gas as a vehicle fuel were exempted from regulation by the Public Service Commission.
Louisville Gas and Electric offers a pilot Low Emmission Vehicle electricity and gas rate for home fueling of either electric or natural gas vehicles.
Kentucky does not publically publish motor fuel tax rates. Tax rates were confirmed by calling their Motor Fuel Division at 502-564-3853 - updated via phone 10/2016
IFTA - IFTA taxes are applied to vehicles of 3+ axles, or weighing more than 26,000 pounds. IFTA tax tables can be found here.
Alternative Fuel Research, Development, and Promotion
The Kentucky New Energy Ventures (KNEV) program provides grants and investments to companies for research, development, and commercialization of alternative fuels and renewable energy. Specifically, KNEV is designed to: 1) grow Kentucky-based alternative fuel and renewable energy companies to promote commonwealth-wide, innovation-driven economic growth; 2) stimulate private investment in Kentucky-based alternative fuel and renewable energy enterprises; 3) expand the alternative fuel and renewable energy knowledge base, talent force, and industry in Kentucky; 4) develop an alternative fuel and renewable energy resource network to build the technical and business capacity of entrepreneurs through informal and formal strategic support; and 5) build commonwealth-wide awareness of the economic development opportunities Kentucky's alternative fuel and renewable energy industry offers. Alternative fuels include biodiesel, ethanol, cellulosic ethanol, synthetic natural gas, fuels produced from coal, and other fuels produced from a renewable or sustainable source. To be eligible, a business must have its principle base of business or at least 51% of the property and payroll in the commonwealth. Additional eligibility requirements apply. (Reference Kentucky Revised Statutes 154.20-410 and 154.20-415)
Clean transportation fuels include liquefied petroleum gas (or propane), compressed natural gas (CNG), liquefied natural gas (LNG), electricity, and other transportation fuels determined to be comparable with respect to emissions. CNG is defined as pipeline-quality natural gas that is compressed and provided for sale or use as a motor vehicle fuel. LNG is defined as pipeline-quality natural gas treated to remove water, hydrogen sulfide, carbon dioxide, and other components that will freeze and condense into liquid form for sale or use as a motor vehicle fuel. Propane is defined as a hydrocarbon mixture produced as a by-product of natural gas processing and petroleum refining and condensed into liquid form for sale or use as a motor fuel.
A bi-fuel system is defined as the power system for motor vehicles powered by gasoline and either CNG or LNG. Bi-fuel systems are considered clean fuel systems. Conversion is defined as repowering a motor vehicle or special mobile equipment by replacing its original gasoline or diesel powered engine with one capable of operating on clean transportation fuel or retrofitting a motor vehicle or special mobile equipment with parts that enable its original gasoline or diesel engine to operate on clean transportation fuel.
Vehicles converted to operate on compressed natural gas (CNG), liquefied natural gas (LNG), or a bi-fuel system must be inspected for compliance with applicable Federal Motor Vehicle Safety Standards (FMVSS). The inspection must occur proximate to the conversion; every three years or 36,000 miles after the conversion, whichever comes first; and following any collision in which the vehicle was traveling at five miles per hour or greater. Vehicles originally designed and manufactured to use CNG or LNG must also be inspected for safety following any collision in which a vehicle was traveling at five miles per hour or greater. Any person who performs natural gas vehicle conversions must certify to the vehicle owner that the conversion does not affect any existing vehicle emissions or diagnostic systems, except as necessary for the conversion. The Kentucky Transportation Cabinet may establish regulations to qualify persons to perform safety inspections; modify FMVSSs for state use; and identify converted vehicles and ensure compliance with applicable regulations. Reference - HB212 Bill History
Alternative Fuel Tax
An excise tax rate of 9% of the average wholesale price on a per gallon basis applies to all special fuels, including diesel, natural gas, liquefied petroleum gas (propane), ethanol, biodiesel, hydrogen, and any other combustible gases and liquids, excluding gasoline, used to propel motor vehicles. For taxation purposes, one gasoline gallon equivalent (GGE) of compressed natural gas (CNG) is equal to 5.66 pounds (lbs.) or 126.67 cubic feet. One GGE of liquefied natural gas (LNG) is equal to 6.06 lbs. (Reference Kentucky Administrative Regulations 103.43:330 and Kentucky Revised Statutes 131.130(1), 138.210, 138.226(1), and 138.220)
Clean Transportation Fuels for School Buses
The Kentucky Department of Education (Department) must consider the use of clean transportation fuels in school buses as part of its regular procedure for establishing and updating school bus standards and specifications. If the Department determines that school buses may operate using clean transportation fuels while maintaining the same or a higher degree of safety as fuels currently allowed, it must update the standards and specifications to allow for such use. (Reference - HB212 Bill History, and Kentucky Revised Statutes 156.153)
Vehicle Acquisition Priorities and Alternative Fuel Use Requirement
The Kentucky Finance and Administration Cabinet (Cabinet) must develop a strategy to replace at least 50% of commonwealth motor fleet light-duty vehicles with energy-efficient vehicles including hybrid electric, advanced lean burn, fuel cell, and alternative fuel vehicles. The Cabinet must also develop a strategy to increase the use of ethanol, biodiesel, and other alternative fuels in commonwealth motor vehicle fleets. The Cabinet must report targeted vehicle and fuel usage amounts annually. (Reference Kentucky Revised Statutes 45A.625)
Natural Gas Deregulation
The rates, terms, and conditions of service for the sale of natural gas to a compressed natural gas fueling station, retailer, or to any end-user for use as a motor vehicle fuel are exempt from Kentucky Public Service Commission regulation. (Reference Kentucky Revised Statutes 278.508)
2015 Session - Proposed Legislation
Resolution calls for a study to address shortfall in funding for highway projects due to the falling excise tax (adjusted every 3 mths based on wholesale price) and reduced revenues associated with fuel efficiency improvements and VMT shifts. Requires that they look at alternative methods of funding highways. Reference - HCR45 Bill History, Reference - HCR45 Bill Text
Emergency bill passed to prevent the gas and motor fuel tax from dropping due to decline in fuel prices. Current tax is 27.5 cent. This bill establishes 26 cent floor and calls for adjustments in tax annually instead of quarterly. Takes effect immediately upon signing. Reference - HCR45 Bill History, Reference - HCR45 Bill Text Signed by Governor 3/25/15
Amends the motor fuel taxes so that portion of the CNG and LNG fuel tax (1.4 cents) shall be deposited in the KY Alternative Fuel and Renewable Energy Fund for purposes of supporting investments in research and development and commercialization. Reference - HB466 Bill History, Reference - HB466 Bill Text Passed H 3/12/2014; Pending: Senate Appropriations and Revenue Committee
Authorizes rate recovery for certain expenditures made to extend natural gas service to areas where there is no service for purposes of providing gas to fueling station. Reference - HB560 Bill History, Reference - HB560 Bill Text Pending: House Tourism Development and Energy Committee
2013 Session - Proposed Legislation
Provides tax credits for CNG and LNG motor vehicles and also mobile equipment like construction or maintenance equipment. Requires safety inspections for converted, retrofitted or repowered vehicles; inspections must occur at time of conversion, every 3 years or 36,000 miles, and after accidents. Persons performing conversions must certify they have not tampered with vehicle. Calls for regulations to identify vehicles that have been converted and ensure compliance with safety requirements. Amends KRS 45A.625 in regards to state fleet purchase requirements, extending time to meet 50% passenger cars and light truck target for AFVs, hybrids, lean-burn vehicles (now target is Jan. 1, 2014). Provides tax credits for 2016 - 2017 as follows: 35% or $2,500 for OEM vehicles, 50% or $2,500 for converted vehicles, or $1,000 in case of mobile equipment. Requires KY Dept. of Education to study whether to allow clean fuel school buses. TAX CREDITS WERE DROPPED. Reference - HB212 Bill History, Reference - HB212 Bill Text Passed House 2/22/2013; passed Senate 3/25/2013; to the Governor 3/25/2013 - NOTE TAX CREDITS WERE DROPPED
Direct the staff of the Legislative Research Commission to study the sufficiency of highway fuel taxes to meet highway funding needs over the next two decades, the effect of the anticipated decline in gasoline demand and its effect on road fund revenue, and alternative methods to fund Kentucky's highways in the face of reduced fuel consumption; report findings to the appropriate committee or committees by November 29, 2013. Reference - HCR86 Bill History, Reference - HCR86 Bill Text Pending: House Transportation Committee [printfriendly]
This state was last examined and updated in October, 2016.