Taxpayer-dollar Free, Rhode Island Subsidizes Electrified Car Purchases With Environmental Violation Funds

While critics of consumer plug-in car incentives have been known to bandy charges of “taxpayer dollars” funding the cost-intensive technology, no such complaint may be levied against Rhode Island.

That’s not necessarily because the state is a bastion of conservative politics and shuns such profligate expenditures, but rather that it elegantly started an incentive program last year offering consumer rebates of up to $2,500 per car without the need to raid the tax base.

Instead, the state’s Driving Rhode Island to Vehicle Electrification (DRIVE) program could just as well be a fitting entry in an encyclopedia under “Poetic Justice” as its coffers were initially filled with funding from settlements and fines from violators of environmental laws.


Not a king’s ransom, the funding added to just $200,000 but considering the small state’s population of just over a million people – and modest plug-in car sales from limited choices – only $17,500 has been issued to date for the still-new program.

The state would like to give its residents more of this free money however, and while some of the eligible vehicles are compliance cars not even sold in state, people may choose plug-in hybrids and battery electric models that are available, and can collect $500, $1,000, or $2,500 without remorse.

Funding Sources

According to Ryan Cote, program services officer for the Rhode Island Office of Energy Resources, two funding sources gave the program its initial monies.


The first $100,000 came from the “Petroleum Violation Escrow” or “Stripper Well Oil Overcharge” funds. This is a fund set up by the federal Department of Energy and dates back to the late 80’s.

The monies from fines over petroleum-related issues were left over, and a good use for them needed to be found, so Rhode Island applied for and got the payout.

The second $100,000 came from the Rhode Island Attorney General’s Office using “American Electric Power (AEP) Settlement Funds.”

This was a joint lawsuit taken on by states and the EPA against AEP for violations against the Clean Air Act. Rhode Island was one of eight states in 2013 that received the settlement, and its portion was $714,000 out of the $8.5 million settlement.

Why is Rhode Island funding DRIVE?

“The Rhode Island State Energy Plan states that the transportation sector accounts for 40 percent of total statewide energy expenditures, releasing 4.5 million tons of CO2 into the atmosphere annually,” says an abstract. “Alternative clean transportation solutions, such as electric vehicles, can reduce consumer fuel costs, mitigate emissions from the transportation sector, and enhance local energy security by reducing demand for foreign-sourced fuels.”


The DRIVE program is intended to complement the state’s clean energy portfolio and facilitate adoption of plug-in electrified vehicles. The program is otherwise modeled closely on existing rebate programs offered in other states.

For Rhode Island residents to be eligible, he or she must select one of the vehicles listed on the program’s list of approved models which is to be updated as new models come along. Vehicles must be purchased or leased from a licensed Rhode Island franchised new auto dealer.

The incentives are for purchases and leases after Jan. 29, 2016.

What happens when the $200,000 is about to be used up? Cote said they’ll look for more money.

Unknown is whether any other environmental violation funds are available, but for now, the money comes from those who’ve harmed the environment to pay those who will help it.