There's Hope in Hybrids.

New cars that use both gasoline and electricity just may be the answer to lowering gas consumption and pollution.

Representative Elizabeth Watson of Maine often receives honks of appreciation, thumbs up from pedestrians and smiles at stoplights as she makes her way to the capitol every day. People are responding to the car she drives--a sleek, two-seat Honda Insight that looks like it might just belong to the future. The onlookers who dole out the encouragement might be even more impressed if they knew what was under the hood. It's a hybrid engine that is powered by gasoline and electricity and can be driven up to 700 miles between trips to the pump.

"People get excited about it, especially when they hear I'm getting 65 miles per gallon in town and 70 mpg on the highway," says Watson. "From my experience, the public is really hungry for new technologies and opportunities to contribute to clean air."

"They always ask me 'Where do you plug it in?"' she says. "Everyone's surprised to learn that I don't have to. The gasoline charges the electric battery as I drive. There is no external charging mechanism.

Indeed, this may be the key to the "real world" application of hybrid technology. The fact that hybrids reap some of the benefits of an electric motor while depending on nothing more than the traditional gasoline system for refueling gives them an edge over other promising alternative fuels.

For many years, the complaint about straight electric vehicles has been inconvenience and lack of performance. No one should overlook the fact that electric vehicles produce zero pollution from the tailpipe. But critics have argued that the electric batteries simply do not store enough energy to power the vehicles for more than 80 or 100 miles.

Recharging with an electrical hookup must be performed frequently and long distance travel is troublesome. How many "electric vehicle charge stations" did you see along the interstate on your last family vacation? On top of this, cold weather is known to zap the strength from batteries creating additional uncertainty and headaches.

Although hybrids are not a perfect substitute for electric vehicles, they cannot be labeled as inconvenient or lacking in performance. The Toyota Prius (Toyota is the only other company with a hybrid for sale) registers top speeds of 105 mph. And by all accounts, the combined power of the traditional gasoline engine with the electric battery motor creates a terrific boost in periods of high acceleration.

"It has plenty of zip. You really feel a surge of power in the passing lane," says Representative Watson.

The arrival of the quasi-electric car comes not a moment too soon, according to energy conservationists and clean air advocates. The average miles per gallon for new vehicles roiling off the production lines has dropped steadily for nearly 20 years and is now at its lowest point since the early 1980s.

The federal government sets the corporate average fuel economy standard (CAFE), which is the average mpg target, that each automaker must achieve for its entire fleet of vehicles. This standard has not changed since 1985, then set at 27.5 mpg for cars and 20.7 mpg for passenger trucks and vans. In 1999, the average mpg for all new vehicles was 23.8 mpg.

In times of such technological advance, why has automobile fuel economy been tanking for nearly two decades? A lot of it has to do with the type of vehicles people are buying. Most sports utility vehicles get between 13 and 18 mpg. Pickup trucks and minivans also have grown dramatically in popularity over the last few decades and their, gas mileage isn't much better.

The fuel economy issue has become magnified over the last year because of climbing gasoline prices. "Improved gas mileage is something the public wants," says Art Garner, Honda spokesman. "Hybrids like our Insight will instantly double fuel efficiency over a lot of the vehicles on the roads today."

Although fuel efficiency is the shining achievement of hybrid technology, it also holds promise for improved air quality. Pollution from automobile tailpipes is difficult to control especially when it comes to ozone (commonly known as smog). Despite the fact that today's cars are significantly cleaner than they used to be, the number of cars on the road and the total miles that Americans drive each year is steadily increasing--wiping out gains achieved by cleaner-burning engines and improved catalytic converters.

Hybrids cut tailpipe emissions of smog pollutants in half and dramatically reduce carbon dioxide and other global warming pollutants too. Toyota's Prius meets the highest pollution standards for any vehicle that is not purely an electric car. The Insight falls in the next cleanest category, meeting ultra-low emissions standards.

HOW IT WORKS

Hybrid technology has been under development for most of the last decade but there is no standard system under the hood of each of these vehicles. Automakers are developing competing and sometimes complementary technologies for hybrid electric vehicle propulsion.

One system uses a small gasoline-burning engine that directly drives an alternator to generate electricity. The electricity is stored in batteries or sent to an electric motor which in turn powers the wheels at all times.

A second system is configured with two power paths so that the gasoline engine, an electric battery pack or both may be used to produce the motive power to turn the wheels. The gasoline engine also is used to charge and recharge the electric batteries.

Under this dual-power or parallel-power system, the vehicle is powered by the electric engine at lower speeds and switches to the gasoline engine for quick acceleration and once it reaches cruising speed.

Reducing the total weight of the vehicle is one of the most important factors in achieving greater fuel efficiency. Replacing steel engine and frame components with advanced aluminum, and strategic uses of other materials such as magnesium, carbon fiber and titanium has helped hybrids shave pounds for greater efficiency. Although these types of structural changes have been simultaneously developed and tested alongside hybrids, they will be equally applicable to use in conventional vehicles.

Some may be concerned that lightweight materials used in hybrids could create safety concerns. Not so, according to Terry Penny at the National Renewable Energy Laboratory in Golden, Cob. "All materials on the hybrid vehicles have to meet structural and other performance requirements identical to conventional vehicles." There is one other specific safety issue, says Penny. "Some people worry that in a rescue situation the 'jaws of life' could be electrifying if they cut into the vehicle's high voltage line." But others say that rescuers would be aware of the electric nature of hybrids and act accordingly in an emergency.

Finally, one of the most attractive and intuitively pleasing features of having an electric motor onboard is a function called regenerative braking. As the brakes are applied under normal driving conditions, the HEV captures energy expended to slow the vehicle down. It is then routed to the battery pack, recycled and applied in the passing lane or in climbing that next big hill.

WHAT'S THE BOTTOM LINE?

It's still very early, but the sticker price for one of these hybrids is a pleasant surprise. Toyota is currently selling its four-door sedan Prius for $20,450. The suggested retail price for the Honda Insight, a two-door coupe, is $18,900.

Unfortunately, selling hybrids at these prices probably doesn't create much profit for automakers. Neither Honda nor Toyota is talking about the actual cost to manufacture their hybrids. "We're not making any money off these things," says Garner. "This is an investment in the future. We've got a ways to go before production of hybrids is cost competitive with straight gasoline-powered vehicles."

James Walter of Toyota says, "Our costs will go down once we start producing significant numbers of hybrids. Economies of scale will kick in." For now, both companies are banking on building consumer relations by putting hybrids on the market several years before their competitors.

Nevertheless, today's list prices are relatively competitive with traditional gasoline autos.

Toyota offers up the Corolla Sedan ($18,500) as a comparison for its Prius hybrid. Both are four-door sedans and offer similar features. Consumers may quickly calculate the cost savings of a vehicle that achieves 48 mpg as opposed to 34 mpg. At $1.51 per gallon and 15,000 miles per year, the Prius saves its owner $194 a year at the pump.

Because of the two-passenger design of the Insight, Honda does not offer a comparison with one of its conventional vehicles. Soon, however, consumers will be able to compare for themselves. Honda has announced plans to equip a limited number of one of its all-time best selling models, the Civic, with hybrid technology beginning in 2005.

CONSUMER DEMAND HIGHLY CHARGED

"Initial response for the Insight was very strong," says Honda's Garner. "We raised our production numbers for 2001." Four thousand Insights were sold in 2000, but demand is such that Honda plans to up the production numbers to 6,500 this year.

As of January 2001, Toyota had sold 5,500 Prius and had 2,500 backlogged orders. Toyota's Walter says, "At first, we didn't know what to expect. Now, we've doubled our production numbers for this year to 2,000 units per month."

Consumers will tell you that these numbers could probably be much higher. "Car dealers were jacking up the price," says Tracy Morford, a 23-year old energy efficiency technician who lives in the San Francisco area and recently bought an Insight. "Most dealers wanted $5,000, or even $10,000 over the suggested sticker price. I had to search for a long time to find one at Honda's list price."

Consumer sentiment that these vehicles are difficult to come by resonates on the East Coast, too. "There does seem to be a production bottleneck," says Amanda Sears of the Natural Resources Council of Maine. "Last I heard, there were 47 hybrids sold in Maine, and 51 people on a four-to-six month wait list."

Honda admits that there have been production and distribution problems thus far, but says that this is a common situation for a vehicle produced in such limited numbers.

SOME STATES PROMOTE CLEAN VEHICLES

There are several federal laws that require states to purchase clean vehicles and alternative fuel vehicles for state fleets. These mostly apply to states with areas that violate national standards for air pollution. But the option is there for states to participate voluntarily in clean vehicle programs.

Georgia, Maine and Utah passed legislation last year providing incentives for the purchase of low emission vehicles or for scrapping high-polluting vehicles.

Maine's bill created a pilot program that offers rebates for motorists willing to retire their older, high-polluting vehicles and purchase clean, low-emission ones. Although the program lacks considerable funding that its originators had hoped for, long lines are forming to participate in the program.

Senator Sharon Treat co-chaired the Natural Resources Committee through which the Maine bill passed. When asked specifically about hybrids, Senator Treat says, "Everyone I know has one or wants one. Public response to super-clean, efficient vehicles is tremendous."

Georgia enacted legislation last year to provide an income tax credit of up to $2,500 per year for the purchase of a very low emission car. "In Atlanta, we're constantly dealing with poor air quality. We're trying to find ways to promote clean transportation," says Representative Charles Scheid.

His bill received little opposition in the legislature. "I'm encouraged. I'm starting to notice these types of cars on the roads." The tax credit can be spread over five years and offers both individuals and businesses incentives to use cleaner cars.

THE START OF SOMETHING BIG?

Alternative fuel automobiles have been promoted and subsidized by all levels of government since the energy crisis of the 1970s. Many have offered hope for creating less pollution while using less gasoline, but each seems to have unique limitations. Limitations aren't generally noted when talking about hybrids and consumers' interest is pushing automakers to make more of them than expected.

Most indicators suggest that hybrids are more than a fad. It makes perfect sense to Representative Watson, "It's a two-fer. You get great fuel efficiency and you help keep the air clean."

Jeff Dale is NCSL's expert an clean air issues.

                           DRIVE GREEN AND SAVE
                 Hybrid cars are not only economical, they
                    pollute far less than regular cars
2000 CAR MODELS   MILEAGE CITY/HWY FUEL COST [*]   EMISSIONS [**]
                                   (PER YEAR)    (CO2 PER YEAR)
  Honda Insight          65 mpg       $374            3.0
  Toyota Prius           48            506            4.1
 Honda Civic HX          36            675            5.4
    Saturn SL            31            784            6.2
Volkswagen Beetle        24          1,013            5.5
Ford F-150 Pickup        16          1,416           11.7
   Chevy Tahoe           15          1,510           12.4
(*.)Figured at $1.62 regular gas; automatic transmission (except Insight);
15,000 miles per year
(**.)Includes all steps of fuel cycle, from refining through driving
Data: U.S. Energy Department, U.S. Environmental Protection Agency

TOYOTA PRIUS

Startup--The electric motor draws power from the battery, gets the car moving and continues to run the vehicle at slow speeds.

Cruising--At higher speeds, the gasoline engine does most of the work, splitting time between recharging the battery and maintaining speed at cruising levels,

Recharging--During braking and at cruising speed, the car transfers kinetic energy from the slowing wheels through the electric motor and back to the battery.

Climbing and Acceleration--While speeding up, passing or climbing hills, the gas engine concentrates on powering the car, and the electric motor pitches in as well.

Startup/Cruising--the gasoline engine is the primary power source for the vehicle, and the electric motor assists as needed.

Recharging--During braking and at cruising speed, the car transfers kinetic energy from the slowing wheels through the electric motor and back to the battery.

Climbing and Acceleration--an onboard computer allocates the contribution of the electric motor. It is primarily used during periods of high demand such as acceleration and climbing.

Idling--the gasoline engine shuts off when the car comes to a stop (at stoplights or otherwise). Drivers notice the silence as the electric motor takes over.

ARIZONA ALTERNATIVE FUELS PROMOTION GOES HAYWIRE

An Arizona law designed to promote use of less-polluting alternative fuel vehicles made headlines last year for its loopholes that provide consumers with incredible discounts. Governor Jane Hull called the Legislature into special session in December to address a runaway rebate that will end up costing the state close to $170 million. The original estimated cost of the program was $3 million to $10 million.

SB 1504, which passed late in the 2000 session, created a refundable tax credit that would pay for the entire cost of converting a new automobile to one that also runs on an alternative fuel. In addition to full reimbursement for conversion cost, the rebate included 30 percent to 50 percent of the entire cost of the vehicle, depending on the air pollution benefit.

For example, someone could have bought a Ford Focus that normally lists at $16,000 and decided to participate in the program. He would then pay to convert the vehicle to run on propane or compressed natural gas at a cost of $5,000. That would make him eligible for the conversion cost rebate of $5,000, plus 40 percent of the total paid--the cost of the car plus the $5,000 or 40 percent of $21,000. It's unbelievable, but true. The deal would get him a $7,600 car. It's easy to see how such an offer may spiral out of control.

Beyond this, pre-owned, older vehicles were eligible for the same tax rebates at the original value of the vehicle. This meant that last summer, someone could buy a 1985 vehicle which sold for $12,000 off the new car lot when Reagan was president and receive the 100 percent conversion refund plus 40 percent of the original value even though they just purchased the 15-year-old car for $500.

How could this have happened? "This bill was buried in an omnibus air quality bill, which generally is sent over by the state environmental department and contains cleanup provisions," explains Senator Herb Guenther, the primary sponsor of the bill that finally put an end to the madness. "It was placed there on the last day of session during a flurry of activity and sent over to conference committee. It slipped through."

Legislators didn't realize something was amiss until September, and a stop gap bill was passed to suspend the refund in early October. By this time, the issue had become a media bonanza and estimates of the total cost to the state exceeded $700 million, Governor Hull called the Legislature into special session on Dec. 4, 2000.

"We had to draw the line somewhere, to put a stop to this transfer of wealth," says Guenther. "So we drew it with consumers who had a vested interest. We put together the best fix we could given the circumstances. We will hold people harmless for our mistake." Anyone who had contractual obligations for the purchase of a vehicle will receive the tax rebate as promised. Consumers who can retreat from purchases on order without penalty must do so. The state estimates that it will pay out approximately $170 million over the next two to three years.

The money will come from the state's rainy day fund, which in turn will be reimbursed from the general fund at $16 million a year. Several investigations are underway to determine if any legislator acted in an unlawful manner in the sage of SB 1504. In addition, the state's attorney general plans to scrutinize purchases, including consumers who purchased multiple vehicles for resale and automobile dealers who may have inflated conversion costs.

"We have our tails between our legs, but we're better off financially than we were a couple of months ago," says Senator Guenther.