Energy, Utilities, Waste: Vehicle Reimbursement Program Analysis

Executive Summary

This report examines vehicle reimbursement programs in the energy, utilities, and waste (EUW) sectors, benchmarking program structures, usage patterns, and cost metrics. It draws on data from thousands of active drivers in companies spanning the United States and Canada. 

This report is useful for anyone managing mobility programs, whether these are fleets of specialized company cars or vehicle reimbursements for employee vehicles. These benchmarking figures will help you understand your existing mobility programs in the context of the wider market. 

Key findings reveal:

• Average Monthly Mileage: 787.25 miles
• Average Monthly Trips: 42.77
• Average Monthly Reimbursement: $502.94
• Dominant Program: Fixed and Variable Rate (FAVR), with 2,637 users
• CPM (Cents per Mile) Stability: Mostly $0.18–$0.20, peaking at $0.24 (July–August 2024)
• Fixed Rate Range: $325–$415, $415.79 in January 2025

Industry players in energy, utilities, and waste often rely on specialized trucks and heavy equipment—but for many roles, personal vehicles with robust reimbursement programs can achieve cost efficiency and compliance. This analysis sheds light on how companies can tailor fleet vs. reimbursement strategies, with a focus on accurate mileage tracking, technology adoption, and regulatory needs.

Industry Snapshot

Energy, utilities, and waste companies typically maintain both specialized and general-purpose fleets. Examples include heavy-duty service trucks for line repairs, environmental response vehicles, or smaller SUVs for field inspectors. However, a significant portion of employees—particularly sales staff, site inspectors, or operations supervisors—use personal vehicles for work. These drivers are prime candidates for well-structured reimbursement programs.

Companies have a selection of programs they can choose from when enabling employee personal vehicle mobility. These include Fixed and Variable Rate, Tax-Free Car Allowance, Cents per Mile, and a Canada-specific program. In EUW, there is a strong preference for FAVR, with 86% of drivers being covered by a FAVR program. 

• Program Enrollment:
  • FAVR (Fixed & Variable Rate): 86%
  • Canada Program: 8%
  • Tax-Free Car Allowance (TFCA): 5%

All of the programs are eligible to be tax-free in accordance with IRS and CRA guidelines. However, FAVR is special because you can exceed the IRS standard rate and still maintain tax-free status, which is not the case with any other program. 

Mileage tracking methods:

In the surveyed drivers, we discovered that 100% of the population uses automated mileage capture, with no drivers using manual entry methods. GPS mileage capture for reimbursements is a really good way to ensure compliance with tax authorities. 

The 100% reliance on tracking-based mileage input underscores the importance of accurate logging in regulatory-heavy environments.

Geographic Footprint

Energy, utilities, and waste operators are spread across most U.S. regions, but the data shows especially high numbers of active drivers in:

• California, Florida, Texas (each with over 313 drivers)
• Georgia, North Carolina, Illinois (168–204 drivers)
• Sparse coverage (2–27 drivers) in parts of the Mountain West, Northern Plains, and select Northeastern states

This distribution correlates with high-population states, industrial hubs, and areas where infrastructure projects—like oil refineries, wind farms, water utilities, or waste-disposal networks—are concentrated.

Trip and Reimbursement Metrics

1. Monthly Mileage & Trips

• Average Monthly Mileage: 787.25 miles
• Average Monthly Trips: 42.77

These numbers suggest that, while many employees do drive substantial distances (often between multiple sites or facilities), the mileage remains lower compared to heavy-travel industries like chemicals or food and beverage. This moderate mileage can make personal-vehicle reimbursements more cost-effective than leasing or purchasing additional fleet vehicles.

Underutilized fleet vehicles increase the cost per mile of fleet vehicles, which is not good from a fleet management perspective. However, Cents per Mile reimbursements can underpay drivers when mileage is low, because there isn’t a stipend for ownership costs. So, FAVR, with two rates, makes it both more cost effective for the company and more fair for the driver. 

2. CPM and Fixed Rates Over Time

• Average Monthly CPM: $0.20
  • Typical Range: $0.16–$0.24
  • Peak at $0.24 in July–August 2024
• Average Monthly Fixed Rate: $385.92
  • Typical Range: $325–$415

3. Monthly Reimbursement

• Average Monthly Reimbursement: $502.94

The average monthly reimbursement (fixed plus variable) hovers just above $500, aligning with moderate mileage levels and typical cost-of-living factors across multiple U.S. markets. The average car allowance in the US is around $600, so EUW is a bit below the average, but, as they say, your mileage may vary. 

Program Distribution and Design

1. FAVR’s Dominance

• FAVR Users: 86% of total

Energy, utilities, and waste companies often favor FAVR for regional cost calibration (fuel, maintenance, insurance) and tax-free compliance if structured under IRS accountable-plan rules. FAVR is especially beneficial for drivers routinely logging between 5,000 and 15,000 business miles per year.

2. Other Programs

• Canada Program: 8% of drivers
  • Canadian rules typically favor per-kilometer reimbursements (CRA guidelines).
• Program 463: 5% of drivers
  • A smaller, possibly internal or specialized reimbursement scheme.

3. Key Administrative Notes

All drivers rely on tracking-based mileage entry—reflecting an industry shift toward telematics and GPS mileage apps that reduce manual data entry and strengthen compliance. A move away from manual logs improves reimbursement accuracy and reduces the administrative burden.

Fleet vs. Reimbursement in Energy, Utilities, and Waste

When Fleets Are Essential

• Specialized Vehicles: Line trucks, sludge haulers, or heavy pickups for equipment.
• Regulatory Compliance: Hazardous material transport often requires dedicated safety features and licensing.
• Larger Tools & Storage: Onboard equipment (lifts, diggers, or aerial buckets) indispensable for certain crews.

When Reimbursement Dominates

• Site Inspectors & Supervisors: Visiting dispersed sites with no need for specialized equipment.
• Customer-Facing Roles: Sales representatives or environment compliance officers traveling shorter distances.
• Administrative/Regional Managers: Checking multiple facilities or service areas, but carrying minimal equipment.

Balancing the Two

Most energy, utilities, and waste organizations blend small specialized fleets (necessary for critical service tasks) with personal-vehicle reimbursements (for roles that need mobility but not specialized transport). Clear segmentation of roles ensures cost optimization.

Program Design Considerations

1. Compliance & Record-Keeping
   • FAVR compliance requires employees to meet certain mileage minimums and IRS guidelines (e.g., standard vehicle cost, insurance verification, fixed vs. variable expense tracking).
2. Technology Integration
   • With 100% of drivers tracking mileage automatically, telematics solutions can go further—integrating driver safety scores, route optimization, or region-specific cost indexing.
   • Regular software updates or vendor support prevent data errors.
3. Geographic Adjustments
   • Wide U.S. coverage plus a sizable Canadian program means variable costs (fuel, insurance) differ regionally. Build local data into FAVR and keep monthly or quarterly reviews to stay accurate.
4. Safety & Insurance
   • High-profile tasks in energy or waste can mean roadside hazards, heavy equipment, or remote sites. Ensure each reimbursed personal vehicle meets insurance minimums and that drivers undergo routine MVR checks.

Cost & Market Implications

By substituting personal vehicles and well-managed FAVR or TFCA (Tax-Free Car Allowance) programs for non-specialized roles, companies can realize:

1. Lower Capital Expenditures: Fewer owned or leased vehicles.
2. Reduced Maintenance Liabilities: Employees handle routine upkeep, with reimbursements covering expenses.
3. Tax Advantages: If FAVR is structured properly, reimbursements remain tax-free, benefitting both employer and employee.
4. Regional Fairness: Drivers in high-cost states (e.g., California) can receive proportionally higher variable reimbursements.

In an industry with fluctuating fuel or compliance costs—like energy or utilities—staying agile with a variable-per-mile approach helps preserve financial stability.

Recommendations

1. Audit Your Vehicle Needs
   • Distinguish truly specialized tasks requiring heavy trucks from standard site visits or administrative roles.
   • Maintain a small specialized fleet for line crews or hazardous-material transport, and use personal vehicles + reimbursements for everything else.
2. Monitor CPM & Fixed Rates Quarterly
   • A quarterly or semi-annual rate adjustment ensures that reimbursements match real costs.
3. Leverage FAVR for Regional Accuracy
   • FAVR’s local cost index is well-suited to large utilities with coverage across multiple states, each with different insurance or fuel expenses.
4. Expand Telemetrics Beyond Mileage
   • Many energy and waste sites have safety-critical protocols. Using telematics to track real-time conditions, driver safety scores, or route optimization can improve compliance and lower accident risks.
5. Comply with Canadian Requirements
   • For the 8% Canada Program drivers, ensure CRA rates and guidelines are followed to keep reimbursements tax-free. If mixing FAVR and Canadian drivers, maintain separate compliance flows.

Conclusion

Energy, utilities, and waste companies occupy a complex operational space—mixing heavy-duty, specialized fleets with roles that need personal vehicles. The analyzed data shows stable reimbursement metrics, a preference for FAVR programs, and robust telematics usage, all pointing to a mature reimbursement culture.

Key Takeaways

• Moderate Mileage and Trips – 787 miles/month, 43 trips/month: well-suited for personal-vehicle reimbursement in non-specialized roles.
• Costs– $0.20 CPM and $385.92 average fixed rates.
• Dominance of FAVR – 86% of users, indicating a strong acceptance of region-based reimbursements.
• Proactive Rate Management – Encouraged by quarter-to-quarter reviews, ensuring alignment with energy market fluctuations, insurance rates, and regional differences.

By carefully segmenting driver roles, maintaining compliance, and leveraging technology, businesses in this sector can keep their mobile workforce safe, cost-efficient, and ready for the vital work of powering communities and managing critical environmental processes.