Anatomy of a $90 Million Truck Deal


When EPRI first identified hybrids as important for their member utilities in 1999, the issue of electric commercial vehicles was essentially dead.

Yet the necessity for more efficient commercial fleets was great. With utility vehicles weighing at times in excess of 19,000 pounds, and the need for these monstrous engines to run nearly all day to power heavy booms, fuel consumption and likewise greenhouse gas emissions were a big concern. So EPRI took up the challenge to stimulate the development of commercial PHEVs. It wasn't long before the AQMD caught the vision and co-funded EPRI's PHEV research.

Mark Duvall, EPRI 

"The production and demonstration of this fleet of vehicles is a significant step in driving PHEV technology beyond the personal transportation platform to a daily work application. This project leverages Eaton's current hybrid electric system and builds upon nearly three years of ongoing work by Eaton and EPRI to develop PHEV technology for commercial vehicles."

Independently, Eaton, a diversified power management company, began development of their first diesel hybrid system a few years later. Seeing parallel intersects between their two organizations, EPRI soon contacted Eaton to begin discussions to work together on the development of efficient commercial fleets. The next several years saw continued testing of various commercial vehicles--from a prototype Sprinter PHEV, to a plug-in gasoline hybrid shuttle bus, and eventually a Ford F550 diesel utility truck.

Public Partnership

John E. Bryson, Chairman and CEO, Edison International

"With public support, it is likely that someday millions of Americans will fill up their vehicles at the plug instead of the pump, saving money and protecting the environment."

Yet it wasn't until nearly 10 years after the vision was first conceived that the group got a big break. In March 2009, the US Department of Energy (DOE) announced ARRA funding for the electrification for transportation, putting in motion a dizzying sequence of events that would lead inevitably to the solidification of relationships and research that had been developing for the past decade. And with these new funds, speedy progress could now be made.

"It would have been an incremental process [without the stimulus funds], which is much harder," added Mr. Duvall.

EPRI, Eaton, and AQMD certainly could not have anticipated the events that led to the award of their $45.4 million grant from the DOE, yet by leveraging the work they'd done over the past 10 years, they are now in the position to make significant progress. And once the DOE project is complete in approximately four years, their vision for efficient commercial fleets will have come to fruition, and a production-level fleet will be ready to roll out, available to whoever wants to buy them.

Design Features

The initial designs are impressive. Unlike traditional utility trucks that run the engine to power the boom for the better part of a day, the new PHEVs can operate for many hours using only electricity. And they recharge by plugging into either individual smart charging stations or a regular 120V outlet, which can power-up the vehicle overnight. As an added benefit, these trucks no longer contribute to noise or air pollution when on-site, making them attractive especially in residential locales.

Alexander M. Cutler Chairman and CEO, Eaton 

"This funding is an important milestone in the advancement of plug-in hybrid vehicles, and Eaton is pleased to be a recipient. By providing our sustainable, energy-saving technologies to power the vehicles as well as the electrical infrastructure support to help keep them running, we believe we can provide ... the technology ... to move plug-in hybrids to the next level."

More important, the EPRI-Eaton approach -- as opposed to existing systems for utility applications -- provides regeneration, launch assist and electric power. Regeneration converts the kinetic energy of braking into a useful form of energy, instead of dissipating it as heat as with conventional brakes. Regeneration is then paired with launch assist, which uses the energy stored through braking for the high power demands of starting, thereby extending battery life. Regeneration, launch assist and the ability of the vehicles to run in battery only mode, dramatically reduces fuel consumption and emissions.

President Obama inspecting PHEV truck. Courtesy Southern California Edison Long Term Cooperation

Certainly long-term relationships between key players made for a smooth transition from planning to implementation. This was especially necessary given the constraints of a tight time line: approximately six weeks from the funding opportunity announcement to submission of the proposal. It was also beneficial to be working with organizations that possessed a proven track record with government-funded research and development projects. Perhaps equally important has been the shared risk inherent in the proposal structure.

"These are tough financial times and we recognize that the cost-share requirement was signification in the funding opportunity," explains Pat Davis, program manager of vehicle technologies at the DOE. "It's hard for a single entity to put up half of the cost of the project, so getting a team together and each sharing some of the burden was important."

US DOE Requirements

Steve Specker President and CEO, EPRI "We now see that widespread use of PHEVs could expand the fuel options in our transportation sector and at the same time yield net benefits to our environment."

The DOE's opportunity announcement contained big requirements: domestic manufacturing, production of at least 100 electric, plug-in hybrid, or fuel cell vehicles, long-term evaluation of the finished product, and a cost-share arrangement that would leave only 50 percent of the bill with the federal government. In the end, there were a total of five financial partners including 50 fleets committing to the purchase of the finished PHEVs, as well as other entities offering technological expertise and manufacturing support. Each came to the table with unique but necessary expertise, and each will benefit from the arrangement. This public--private--nonprofit partnership serves as a model for how to organize diverse groups around a single cause to achieve substantial financial gains. Read in the 2011 Transportation issue to see details on the players, the impact of PHEVs on energy costs and more.