If green is good, why must it be subsidized?

Why is that government bodies unwilling to fork over their own money to buy alternative-energy vehicles suddenly change their minds once they receive someone else’s money to make the purchase?

The Greenville News reported Sunday that Seneca this past week became the first South Carolina city to announce service using Greenville-built Proterra buses, which are touted as being zero-emission vehicles.

Seneca officials said they’d use $4.1 million from the Federal Transit Administration and $2 million from Atlanta utility Southern Co. to buy five Proterra buses and launch all-electric bus service, according to the publication.

Meanwhile, the Greenville Transit Authority is preparing its third application for federal funding to pay for a rapid-bus service using Proterra buses.

The US Department of Transportation is expected to decide on the request in March, said Carl Jackson, GTA’s executive director and transportation director for the city of Greenville, the News reported.

Twice previously, the Greenville Transit Authority has been twice rejected for federal funding it sought to develop a bus rapid transit system using Proterra buses.

In 2009, GTA asked unsuccessfully for about $100 million to pay for a regional system stretching from Clemson University to Greenville-Spartanburg International Airport and from Travelers Rest to Fountain Inn.

In 2010, it sought – again unsuccessfully – $15 million to develop an eight-mile, nine-station line that would link downtown with the International Center for Automotive Research.

In its latest application, GTA seeks $21.7 million to run eight Proterra buses along the previously proposed line and also launch express service to GSP and Mauldin/Simpsonville, according to the News.

The buses would have onboard WiFi Internet service and multiple flat-panel televisions, according to GTA’s application for the federal money.

Proterra’s buses cost more than their diesel-fueled competitors, but the company claims it’s worth it over the long run.

The company’s EcoRide model sells for between $850,000 and more than $1 million, depending on how many are included in the deal, how they’re equipped, the energy storage capacity and the size of the charger. That compares to about $400,000 for a conventional diesel bus.

Transit agencies can save $750,000 in fuel costs per bus over 16 years by using Proterra’s vehicles instead of diesel-powered ones, according to company officials.

So the question one is left with is this: If the buses result in such great cost savings in the long run, why are municipalities only going forward with purchases when they’re heavily subsidized by someone else?

And before anybody starts talking about how wonderful it is that South Carolina municipalities are buying alternative vehicles from a company located here in the Palmetto State, let’s not forget that the only reason Proterra set up shop in Greenville is because the state threw tens of millions of dollars at it.

An analysis by my employer, The Nerve, of the state and county incentives agreements for the construction of the Proterra electric- and hybrid-powered bus assembly plant in Greenville, found that the company could receive as much as $40 million in corporate income tax credits, job-development credits, grants, low-interest bonds and forgivable loans within 10 years.

Throw in millions in expected county property tax breaks, and the total state and county incentives package would more than pay for the projected cost of the plant, according to a story The Nerve ran this summer.

Per usual operating procedure with the SC Department of Commerce, the information could only be obtained through an S.C. Freedom of Information Act request.

Some of the benefits the company will receive include:

  • The state will provide worker training through the SC Technical College System’s readySC program. The training is valued at $3.9 million based on 1,300 workers. Yes, we pay them to come here, then we pay to train their workers;
  • Proterra won’t have to pay any property taxes based on the normal 10.5-percent assessment rate for manufacturers. Instead, under a 20-year deal with the county, the property will be assessed at a lower commercial rate of 6 percent and taxed at a fixed millage rate, saving the company millions of dollars over the life of the agreement. And, in the first 10 years of the agreement, Proterra would receive annual rebates – likely worth hundreds of thousands of dollars yearly – of its fee-in-lieu-of-taxes payments; and
  • The city of Greenville will rent temporary manufacturing space for one year to Proterra for a total of $12. Proterra will lease land – 25 acres, according to a Clemson University press release – for its permanent plant on the university’s International Center for Automotive Research campus.

One wonders how the average small-business owner feels about sweetheart deals such as this as they plug away, putting in 50, 60 or 70 hours a week – with no small portion of that time consumed by bureaucratic red tape.

Meanwhile, a select few companies such as Proterra enjoy a bountiful harvest of government largesse that not only keeps them in business when they not only would have likely foundered long ago – if they’d even gotten off the ground – but makes it possible for them to reap rich rewards if they play their cards right.

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