White House, EPA urge US Postal Service to reconsider gas-powered vehicle plan

WASHINGTON, Feb 2 (Reuters) - The White House and Environmental Protection Agency (EPA) on Wednesday urged the U.S. Postal Service (USPS) to reconsider its plan to buy a new multibillion-dollar fleet of primarily gasoline-powered delivery vehicles.

The EPA sent a letter to the USPS on Wednesday urging it to hold a new hearing on its 10-year contract with Oshkosh Corp (OSK.N) that could be worth $6 billion or more to build up to 165,000 next-generation delivery vehicles.

White House Council on Environmental Quality chair Brenda Mallory said in a letter the EPA "has communicated grave concerns with the adequacy of the environmental review that the USPS has conducted to date." She urged USPS to complete a supplemental environmental impact statement.

USPS said it would review the EPA's concerns but believes it is in compliance with environemntal review requirements.

"While we can understand why some who are not responsible for the financial sustainability of the Postal Service might prefer that we acquire more electric vehicles, the law requires us to be self-sufficient," USPS said in a statement, adding it is "willing to accelerate the pace of electrification of our delivery fleet if a solution can be found to do so that is not financially detrimental to the Postal Service."

USPS awarded a $482 million contract to Oshkosh's defense unit, which will make the next-generation vehicles, in February 2021 that could ultimately be worth $6 billion. Oshkosh did not respond to a request for comment.

U.S. Postmaster General Louis DeJoy previously told lawmakers the agency was committed to having electric vehicles make up 10% of its next-generation fleet as part of its multibillion-dollar plan to retire its 30-year-old delivery vehicles.

The EPA said USPS's proposed new gas-powered vehicles "are expected to achieve only 8.6 miles per gallon (mpg), barely improving over the decades-old long-life vehicles that

achieve 8.2 mpg."

EPA said greenhouse gas emissions from the gas vehicles "will total nearly 20 million metric tons of carbon dioxide" over 20 years and the present value of the climate damage from these emissions would exceed $900 million.

EPA wants USPS to first purchase the "full minimum committed" EV volume before buying new gas-powered vehicles and also purchase commercially available electric vehicles for some routes.

The Sierra Club praised the Biden administration effort. "Shifting to a 100% electric Postal Service is a no-brainer. Electric mail trucks will reduce noise, air, and climate pollution in communities across the nation, while slashing fueling costs," the environmental group said.

Biden's spending and climate bill would award $6 billion for USPS to purchase electric delivery vehicles and infrastructure. With the funding, USPS has said all delivery fleet acquisitions could feasibly be electric by 2028, and a corresponding 70% of the entire delivery fleet could be EVs by 2030.

Mallory wrote on Wednesday the White House supports USPS "using its existing resources, including its significant cash reserve or through a credit strategy, to invest in our nation's health, environment and competitiveness."

The contract allows for delivery of between 50,000 and 165,000 of the vehicles over 10 years.

The USPS rejected a proposal from electric-vehicle maker Workhorse Group Inc (WKHS.O).

DeJoy said last year USPS had agreed to spend $500 million on the next-generation vehicles to make them convertible to EVs from internal-combustion models at a future date.

Reporting by David Shepardson in Washington Additional reporting by Ben Klayman in Detroit and Chris Gallagher Editing by Tim Ahmann, Aurora Ellis and Karishma Singh

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