Deal Would Mean USPS Can’t ‘Drag Its Feet’ on Electric Vehicles

August 03, 2022

Democrats’ new reconciliation deal adds to pressure on the US Postal Service to amend its controversial vehicle contract.

The USPS would secure $3 billion to electrify its trucks under legislation negotiated by Sen. Joe Manchin and Senate Majority Leader Chuck Schumer that could get a vote in the chamber this week. The spending would come as USPS has faced scrutiny and lawsuits for its plan to buy a bulk of new gasoline-powered delivery trucks from Oshkosh Defense. Lawmakers and activists have sought to reverse the move over the last year to force 100% fleet electrification.

“With this funding, there’s absolutely no doubt that the Postal Service should commit to 100%, and we’re hopeful that our public pressure along with states and labor unions, and other folks will continue to make them go in that direction,” said Adrian Martinez, senior attorney on Earthjustice’s Right to Zero campaign. “This proposal, if it does pass, kind of puts to bed a lot of those issues, and I think there would be absolutely no reason why the Postal Service would continue to drag its feet.”

Luke Sharrett/Bloomberg via Getty Images
A United States Postal Service employee sits in a truck outside a post office in Cincinnati on July 2, 2022. Advocates are pressing the USPS to step up its replacement of its fleet with electric trucks.

The legislation, which would spend $369 billion on climate and energy, would need all 50 Democratic votes to pass the chamber via a maneuver known as reconciliation, and it’s yet to be determined whether moderate Sen. Kyrsten Sinema (D-Ariz.) will support it.

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The USPS said in a previous environmental impact statement that committing to more than 10% of electric vehicles in its fleet wasn’t possible without additional funding, estimating that it would need at least $3.3 billion more. That assessment came before USPS doubled the proportion of electric vehicles in its initial order, and then announced last month that at least 40% of its total vehicles would be electric.

The USPS is being sued over its fleet purchase plan — which initially included a commitment to electrify just 10% of the fleet — by environmental groups as well as more than a dozen states. The contract for Oshkosh also faced backlash because the defense contractor won the deal over electric vehicle maker Workhorse Group Inc.

“We have been monitoring the interest of Congress in funding an increase in electrification, and should funding be enacted we will assess the impact on our plans,” Kim Frum, USPS spokesperson, said in an email.

‘Pivoting’ on Contract

USPS awarded Oshkosh Defense a 10-year contract in February 2021 to manufacture as many as 165,000 postal delivery vehicles. USPS’s “indefinite order, indefinite quantity” contract to Oshkosh last year for 50,000 to 165,000 vehicles is unchanged, Oshkosh spokeswoman Alexandra Hittle said.

The “contract provides the USPS with the flexibility to order a higher proportion of battery electric vehicles as their needs evolve,” Hittle said in an email, adding that the company is capable of delivering both electric and gas vehicles over the next decade and is ready to start production in August 2023.

Postal Service officials have repeatedly said the service could increase its electric commitment with additional funds. Postmaster General Louis DeJoy said at an event last week that agency officials committed to 10% electric originally since they were “dipping our toes into it,” but the contract allowed them to do a greater percentage later.

Major postal overhaul legislation (Public Law 117-108) in April improved the agency’s finances, allowing the Postal Service to change its original commitment earlier this year, he said.

“I always said when we get more information, when we redo our network, when we get better financial condition, we’ll buy more,” DeJoy said at an event last week, before details of the Schumer-Manchin deal were announced.

Rep. Jared Huffman (D-Calif.), who has long pushed to electrify the postal fleet, said the proposed reconciliation money could be used on charging infrastructure for postal vehicles, which carries upfront costs but should also be available to other cars. Meanwhile, Huffman said EVs for USPS “sell themselves just on economics.” He said he and other lawmakers will want to continue “vigorous oversight” of the USPS contract. The measure would also provide $15 million for USPS’s Inspector General for oversight.

“They should never have awarded this contract if they were serious about electrifying their fleet,” Huffman said in an interview. “But now that they seem to be pivoting, and taking at least a somewhat serious look at electrification, it’s going to be very hard to get there with this contract.”

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House Democrats asked the USPS inspector general to investigate the agency’s decision to replace its fleet with majority gasoline-powered models. The agency’s Office of Inspector General has found that most postal routes are suitable for electrification.

“Our hope is that it continues to increase the commitment,” said Ben Prochazka, executive director of the nonprofit advocacy group Electrification Coalition. “As one of the nation’s most visible fleet that’s traveling through every single neighborhood in every community across the country with very predictable routes, it is, in many ways, perfect for electrification.”

To contact the reporter on this story: Lillianna Byington in Washington at lbyington@bloombergindustry.com

To contact the editors responsible for this story: Robin Meszoly at rmeszoly@bgov.com; Anna Yukhananov at ayukhananov@bloombergindustry.com


By:  Lillianna Byington
Source: Bloomberg Government