An Arkansas school district selected for a federal rebate to help fund the purchase of an electric school bus has declined to move forward with the purchase while another district selected for the program is trying to decide whether it can afford the purchase due to the high purchase and infrastructure costs that have posed a hurdle for electric-vehicle adoption nationwide.
The Batesville School District — which turned down its spot in the rebate program — was due to receive $365,000 as part of the U.S. Environmental Protection Agency’s Clean School Bus Rebate Program for one electric school bus. The rebate program offered to provide a combined $11.03 million in rebates toward the purchase of 36 electric school buses in Batesville and three other selected Arkansas districts.
However, the rebate would only partially cover the costs associated with purchasing the vehicle associated charging infrastructure — leaving the district responsible for several tens of thousands of dollars in remaining cost. This proved to be unpopular with Batesville’s residents, school district spokesperson Megan Renihan said.
Members of the community immediately voiced their opposition when the news of the district’s selection for the rebate broke, Renihan said, not because the new vehicle would be electric, but because of an ongoing multimillion-dollar construction project for a new cafeteria and fine arts center that the district didn’t have the money to finish due to inflation.
“They were not a fan of us getting an electric bus,” Renihan said of the public reaction.
“They think, ‘Oh, well if you’re getting $365,000 and you can’t even finish this building, why don’t you just apply it to that?’ Well, that’s not the way that a grant works.”
Unlike a traditional grant, which would fund the purchase directly, the rebates being offered by the agency require recipients to buy the buses first and then submit the purchase orders to get the money from the agency.
Other factors also played into the decision, Renihan said.
The district normally does bus maintenance in-house, Renihan said.
But, if the electric bus ever needed repairs, it would need to be towed to Russellville, nearly two hours away, increasing maintenance expenses. Additionally, the district bought 13 new buses during the pandemic.
“It was also our response to saying ‘Well, we already have a pretty new fleet of buses, so why accept something that’s going to be a further financial burden, even if it’s 10 years down the road?’ It’s the perception of us accepting something when we don’t even have the money to finish a project that we already have going,” Renihan said.
Farmington Public Schools, another district selected to receive the second-largest rebate in the state, is currently in the “investigative phase” of determining if it will go forward with purchasing the six buses it was approved for under the rebate program, Superintendent Jon Laffoon said.
The district was approved for $1.22 million in rebates.
“The thing about Farmington is we have a small land area district, about 41 square miles, and most of our roads are paved and not too hilly or mountainous,” Laffoon said.
“These buses are perfect for us. I know there’s some additional rebates for charging infrastructure, I’m trying to find out what that amount would be, and then also finding out what, there’s a tax credit available for the clean buses.”
Like with Batesville, it’s possible the extra costs the district must shoulder will prove too high to justify since the $1.22 million rebate won’t cover the full cost for the six buses and the associated charging infrastructure, Laffoon said.
By Laffoon’s estimate, the district will still need to foot a $1 million capital cost after the rebate has been applied.
The cost for the buses is around $400,000 each, Laffoon said, and the rebate will only cover about half of that.
“If we can spread that [the capital cost] out over two or three years, that’s the other thing I’ve asked the EPA, then this would be doable for us, but we might end up not being able to do that or, you know, we might be able to take [the rebate] for three buses or two buses. I’m looking at all those factors, trying to make it workable for us,” Laffoon said.
Laffoon said they are currently waiting for the agency’s response.
The EPA has a few options for money from the rebate program that goes unclaimed.
“If a selectee does not complete the remaining required steps early in the rebate process, drops out, or is otherwise deemed ineligible, the selectee will be removed from the program,” Environmental Protection Agency Region 6 spokesperson Joe Robledo wrote in an email.
“Those funds may be offered to other 2023 applicants on the wait-list. … However, the EPA may opt to use returned funds for future CSB funding opportunities rather than award funds to applicants on the wait-list.”
Wait-listed applicants can be pulled off the list up to 90 days after the agency’s initial notification of selections, Robledo said, and the process for reallocating those funds will follow the program’s 2023 guide.
Quitman Public Schools was also selected for a federal rebate.
It’s superintendent, Dennis Truxler, said it’s the district’s first time to get selected for the clean bus money.
“We wrote the grant last year, but didn’t get it,” Truxler said. With this year’s award, $820,000, they will be able to get rebates for four new electric buses.
“We have 4 older buses with high mileage that need replacing so receiving the grant saves the district hundreds of thousands of dollars,” Truxler wrote in an email.
A spokesperson for the Little Rock School District, which is due to receive $8.62 million from the rebate program, said in a written statement that the 25 electric buses the district plans to purchase will primarily serve special-needs students in the district.
The district said it is partnering with Entegrity, “a local energy services company,” to assist with the preparations for the vehicles, which the district said will hit the roads between late 2025 and early 2026.
“The District is grateful for this opportunity to participate in a program that promotes a more sustainable environment, benefiting the future of our students,” Pamela Smith, the district spokesperson, wrote in an email.
“Today’s announcement is good news for children in Arkansas, especially those in underserved areas who are often exposed to more air pollution and health risks such as asthma,” Environmental Protection Agency Region 6 Administrator Earthea Nance said in the May 30 news release.
“Replacing diesel fueled buses with clean school buses reduces harmful emissions and improves air quality in communities throughout the nation.”
Fumes from diesel-powered buses can contain known carcinogens, along with other harmful gases that can harm students riding on them.
The Electric School Bus Initiative website says that while the initial upfront cost of purchasing an electric school bus is higher than that of a diesel-powered school bus, the fuel savings help offset that cost.
However, without tax credits, rebates and other ways to bring down the cost, it is still more expensive to operate an electric school bus compared to a diesel school bus.
According to an analysis run by the initiative in May 2023, before the current iteration of the clean bus rebate program, if a school district claims a $362,000 rebate for an electric bus — which includes a $10,000 rebate for a charger — then the total cost of ownership of that electric bus is around $208,000.
Comparatively, it says that the total cost of operation for a diesel-powered bus is $414,000 — including fuel, insurance and maintenance costs — while it would be $530,000 for an electric bus if no rebates, tax credits or other cost offset is claimed.
Diesel powered buses model year 2010 or older that are replaced through the rebate program must be scrapped – preferably by cutting a nine square inch hole in the engine block and destroying one of the buses’ chassis rails, according to documents written by the agency.
Districts that don’t have 2010 or older buses can replace newer model year buses, which can be sold or donated instead of scrapped if the district chooses.
Despite heavy federal spending to encourage electric-vehicle adoption — nationally through the electric-vehicle tax credit championed by President Joe Biden and in Arkansas through federal grant funding to expand the state’s charging network — Arkansas’ adoption of electric vehicles has been slow.
According to numbers updated by the U.S. Department of Energy in May, there are 6,572 electric vehicles registered in the state of Arkansas, compared to its estimated population of around 3 million.
Other southern states such as Alabama and Louisiana have a similarly low electric vehicle-to-population ratios.