Oklahoma Natural Gas has slashed the amount of rebates toward compressed natural gas vehicles and conversions after seeing stronger-than-expected demand for the incentives.
The company announced a waiting list for the program in October, just a few months after it went into effect in July.
ONG said Monday it will reduce the rebate for a dedicated natural gas vehicle to $1,000, down from $2,500 in the original program. The rebate for a bi-fueled natural gas vehicle will fall to $500, compared to $1,500. Residential CNG fueling systems will have a $1,000 rebate, down from $2,500.
The reduced rebates take effect Nov. 26.
Money for the rebates comes from a 25-cent per gasoline gallon equivalent surcharge on compressed natural gas bought from ONG's public fueling stations. The Corporation Commission approved the surcharge in June.
“While we would like to continue rebates at the current levels, our funding source — a 25-cent surcharge based on the amount of CNG sold to the public at company facilities — simply can't support the rebates at those levels,” said Greg Phillips, president of ONG, in a statement. “As a result, we are reducing the amounts of the rebates due to this exceptionally strong demand.”
ONG has 61 rebates on its waiting list totaling $130,500, said spokeswoman Cherokee Ballard. Those on the waiting list will receive the higher rebates if their applications were processed by Nov. 26. The company expects to be able to pay rebates again by March.
Rebates are limited to three per applicant each calendar year. Dealers and installers of CNG conversion systems are not eligible for the rebates.
The ONG rebates are on top of existing state tax credits for natural gas vehicles, conversions and home-fueling stations. The state incentives, which expire at the end of 2014, are unaffected by ONG's rebate reduction.