Kentucky Incentives and Laws

Last Updated April 2006

State Incentives

Biodiesel Income Tax Credit

An income tax credit is available for biodiesel producers and blenders at a rate of $1.00 per gallon. The total amount of credit for all biodiesel producers and blenders may not exceed the annual biodiesel tax credit cap of $1,500,000. This credit may not be carried forward to a tax return for any other period. (Reference Kentucky Revised Statutes 141.422 to 141.425)

Alternative Fuel Promotion

The Kentucky Division of Energy provides information on a range of alternative fuels, demonstration projects, and promotes networks of people working with alternative fuels. It has implemented a number of projects to support AFVs and establish an alternative fuel infrastructure.

State Laws and Regulations

State Agency Energy Plan Alternative Fuel Requirements

To ensure that Kentucky will become a leader in securing U.S. energy independence, the Kentucky Energy Security National Leadership Act directs the Commonwealth’s Office of Energy Policy to develop and implement a strategy for production of transportation fuels and synthetic natural gas from fossil energy resources and biomass resources, including biodiesel and ethanol. The strategy must include the establishment or expansion of state government incentives for development, construction, or operation of alternative transportation fuels and synthetic natural gas production facilities. (Reference House Bill 299, 2006)

Natural Gas Deregulation

The rates, terms, and conditions of service for the sale of natural gas to a compressed natural gas fuel station, retailer, or to any end-user for use as a motor vehicle fuel are exempt from regulation by the Kentucky Public Service Commission. (Reference Kentucky Revised Statutes (KRS) 278.508)

Liquefied Petroleum Gas (LPG) Excise Tax Exemption

LPG is exempt from the state excise tax when it is used to propel motor vehicles on public highways, given that those vehicles are equipped with carburetion systems approved by the Natural Resources and Environmental Protection Cabinet. (Reference Kentucky Revised Statutes 234.321)

Biofuels Use

The Kentucky Transportation Cabinet and the Finance and Administration Cabinet are directed to establish procurement contracts that maximize the market availability of ethanol (E10) and biodiesel (B2) blends, and to report to the state Office of Energy Policy by July 1, 2006 on progress in promoting the use of these fuels. Additionally, employees using conventional vehicles in the Transportation Cabinet's fleet are directed to use either E10 or B2 as their primary fueling option, and the Transportation Cabinet is directed to maximize the use of E85 in its fleet of flexible fuel vehicles. The Transportation Cabinet is directed to promote clean fuels by educating employees about clean fuels, identifying vendors, and holding employees accountable for electing to use clean fuels in state vehicles. (Reference Executive Order 2005-124)

Utilities/Private Incentives

Feasibility Studies for Compressed Natural Gas (CNG) Refueling Stations

Atmos Energy offers preliminary feasibility studies for CNG refueling stations and vendor selection on a case-by-case basis.

Point of Contact

Walter C. Miller
Energy Services Consultant
Atmos Energy
Phone (817) 303-2903
Fax (817) 303-2929
walter.c.miller@atmosenergy.com
 

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