Senator Eliot Shapleigh - El Paso, Texas

AUSTIN — James Philippi’s do-it-yourself project allows him to drive an average of 90 miles on the equivalent of a gallon of gasoline.

It’s also made him one of a handful of Texans tapping into a new green technology that’s creating a buzz among lawmakers. The 42-year-old Houston-area entrepreneur converted his 2006 Toyota Prius into a plug-in hybrid capable of running solely on electric power for about the first 15 miles, saving gas and emitting fewer pollutants than a regular vehicle.

“People are getting thrown by these incredible numbers. It shouldn’t shock anyone,” Philippi said. “The reason the numbers are great is because we’re using electricity instead of gas.”

Federal and state lawmakers hope Philippi’s enthusiasm rubs off on the rest of the country — and they appear willing to shell out the money for tax credits to help jump-start interest and market demand in mass-produced electric hybrid vehicles.

More than $2 billion will be allocated toward federal rebates for the first generation of plug-in hybrid buyers, according to the final version of the stimulus package. Now, Texas lawmakers want to join the short list of states proposing additional rebates in an effort to make the Lone Star State a leader in new-age electric transportation.

“The objective of this rebate program is to clean the air,” said state Sen. Kip Averitt, R-Waco, who has filed an omnibus clean-air and energy bill that would give a $4,000 state subsidy to plug-in hybrid buyers.

Reducing emissions
Gov. Rick Perry first proposed a tax credit of $5,000 for plug-in hybrids buyers in his State of the State speech last month. Allison Castle, a Perry spokeswoman, said money to pay for the rebate program would come from the Texas Emission Reduction Program, which is funded by vehicle title transfer fees and currently has a balance in excess of $200 million.

“The concept resonated with me,” state Rep. Rafael Anchia said of Perry’s proposal.

Four years ago, Anchia, D-Dallas, helped author a failed measure that would have given Texans who purchased a hybrid car a 10 percent rebate on their sales tax.

This session he’s pushing a bill aimed at replacing the state’s fleet of vehicles with plug-in hybrids if they prove to be cost effective. The purpose of the bill, he said, is to help reduce fuel costs — which in fiscal year 2008 totaled $61 million — and lower emissions emanating from the state’s fleet of about 26,000 vehicles.

Perry is proposing funding for the rebate program become available in 2011, about a year after Chevrolet has said it would roll out its own plug-in hybrid, the Volt. The vehicles probably won’t be available on a mass-scale until about 2015, and the first models are expected to carry a hefty price-tag of about $40,000, experts say.

A federal tax credit approved last fall of up to $7,500 is expected to ease initial sticker shock. In all, Texans could see a rebate up to almost $12,000 from state and federal tax credits.

But not every lawmaker is ready to applaud the state tax credit idea.

State Rep. Mike Villarreal, D-San Antonio, said he’d like to get a sense of the merits of subsidizing the demand for plug-in hybrids to justify state spending.

“I’d like to see the fiscal note on that,” Villarreal said of Averitt’s rebate proposal, noting that plug-in hybrids could be a “transformative technological breakthrough.”