Clean Air Grants

sitegrader

Has anyone had any experience with any of the re-power or replacement grants that are being offered in areas that the EPA has designated as "dirty air areas". They are being administered by State Commissions on Environmental Quality. People I have spoken to locally (North Texas Area) have indicated that they are receiving about double the auction value of the replacement equipment, plus you get to keep the old tractor for salvage. You have to permanently disable the engine (three inch hole in the block, and cut the tractor frame). The only qualifing criteria seems to be that you have to have owned the tractor for more than two years and must be over 25 horsepower. You have to replace machine for machine, horsepower and operating weight have to be very similar and the engine has to be a Tier 3.

Recent example: A local demolition contractor has two Cat 235 Excavators (1984 vintage), the State of Texas is granting him $116,000.00 per machine in order to acquire replacement machines. I don't believe he could get over $15,000.00 each at auction for either of his machines as they look like they are in the process of being demolished.
Just curious whether anyone has had any experience with any of these grant programs.

Gmads

Looked into the TERP program last year thru ROMCO Equipment. Examples were me trading a '99 Komatsu PC-200-6 for a Volvo 210BLC or a Volvo 160BLC. If memory serves me, I would receive approximately $24,000 for the 200 to 160 trade, and about $17,000 for the 200 to 210 swap. In addition, last years program only stipulated that the machine had to leave the state of Texas. ROMCO would throw the machine on IronPlanet (with a sales note that only buyers outside of TX could buy) so you could use that amount toward the purchase price. I had heard this year that the stipulation that the machine had to be close in class were looser. I had heard the same rumors that a demo contractor had TERP'd two 235s for four 210BLCs for big grants. ROMCO and RDO have guys that specialize in the paperwork for the program - not sure about HOLT or Continental. In a couple of months I'll be looking into it a little harder to get rid of a Cat 345.

TERP

I do the TERP filing for ROMCO and do a good number of estimates each round to give folks an idea what kind of grant they can expect, if approved. Those who are interested enough to proceed provide the info we need and I fill out the grant application.

The TCEQ adjusts the TERP program a little each round. At one time you could ship the old unit out of the state and sell it, but you are correct that now you have to scrap it. The state allows you to keep the old unit and part it out if you decide not to sell the scrap, but the unit can no longer run.

I have seen some customers get VERY good value from their grant and others get more or less the trade-in or auction price. There are a lot of factors that go into it determining how much you get. It's not as simple as getting $*** for replacing an L90C. That's why I do so many estimates.

Having read the orignial post, please be aware that as of the most recent round you did NOT have to buy a Tier 3 engine for the new/replacement unit. However, your grant would be significantly higher if you did. They allow a Tier 2 to replace a Tier 0 in some cases, for instance, but a Tier 3 would result in a larger grant.

I know that when you first start researching the TERP program it can be like opening a can of worms. I'd be happy to discuss further if you'd like to address specific questions. There's no charge or anything like that.

Paul
pparker@romco.com