The alternative-fuels scandal of 2000 was one of the biggest financial fiascos in recent state history. The state’s lawmakers accidentally spent $120 million in public funds on a program that accomplished little.
The program, created by former lawmaker Rep. Jeff Groscost of Mesa, and signed into law by then-Gov. Jane Hull, was supposed to cost $3 million to $10 million, as analyzed by legislative experts.
The idea was to give state money to people who bought vehicles that could run parttime on natural gas or propane. Subsidies also became available for fueling stations.
But the bill had been carelessly assembled.
Groscost had struck through part of the bill that would have required vehicle buyers to actually use the alternative fuels. It later was learned the program had not been analyzed by antipollution experts. The subsidized vehicles, which in many cases cost buyers next to nothing, could be sold immediately to another party at huge profit, under terms of the law.
And because of the lack of one word in the bill’s text, the subsidy applied to tens of thousands of vehicles instead of 2,700.
If not for legislative intervention, the law would have cost Arizonans about $1 billion.
The final cost remains at about $130 million.
DID THE 2000
ALT-FUELS BILL REDUCE POLLUTION?
Ninety percent of the 6,325 vehicles subsidized by the state were full-size sport utility vehicles and pickup trucks converted to run on both gasoline and natural gas or propane.
Those vehicles pollute more, even when running on an alternative fuel, than economy cars running on gasoline.
When running on natural gas, some tests showed, the converted vehicles put out twice as much ozone-creating fumes as they would using gasoline.
With no fuel-use requirement in the bill, many subsidy-takers installed tiny tanks for the alternative fuels in their vehicles. Many Chevrolet Suburbans, for instance, were fitted with natural gas tanks that could hold an amount equivalent to less than four gallons.
Although subsidy-takers were required by law to use alternative fuels in their vehicles, the state never enforced that provision.