I must admit that this time of year, I don't enjoy having to say goodbye to summer: the warmer weather; the sunshine; the brighter days; barbecues; and family reunions.

But one thing people don't generally miss about summer is the higher fuel prices that come with it - and this summer was the worst on record. When gas prices reached their height in June, the average cost in my home state of Utah was $3.26 for a gallon of regular gasoline.

There are many factors contributing to the skyrocketing gas prices: increased demand for gas from rapidly industrializing countries like India and China; lack of domestic oil refining capacity; and supply disruptions from foreign sources.

To combat these problems, we need to use many different tactics. One proposal I have developed with Sens. Maria Cantwell, D-Wash., and Barack Obama, D-Ill., is the Fuel Reduction using Electrons to End Dependence on the Mideast Act of 2007, or the FREEDOM Act. With it, we hope to initiate a shift in the transportation sector away from liquid fuels and toward the greater use of electrons.

Electricity can be much cheaper and cleaner than petroleum, and electricity can be generated domestically and independent of the global oil market. I believe that the United States is in a unique position to take the leadership role in developing the market technology and domestic production capacity for this dramatic shift in the transportation sector.

The FREEDOM Act's goals would be achieved through four strong tax incentives:

1. Consumer purchase. Freedom Plug-in Credits would cover the consumer purchase of vehicles, which use batteries and that plug into the electric grid for at least part of their power. This would include plug-in electrics, plug-in hybrids and others. The amount of the credit would be based on the kilowatt hours of the vehicle's battery pack, with a cap of $7,500 for passenger vehicles. The same is true for heavier duty vehicles, except that the caps are scaled up for each vehicle weight class.
2. Hybrid conversion. Freedom Conversion Credits would go to hybrid-electric vehicle owners who choose to convert their vehicle to a high-quality, plug-in hybrid. These credits would also be scaled to the kilowatt hours of the new battery installed in their vehicle. Only high-quality conversion kits, which are certified to meet all highway safety and emissions standards, would qualify for a Freedom Conversion Credit. The credits would be available until the market transitions toward commercially available plug-in hybrid vehicles.
3. Manufacturing. The FREEDOM Act also offers first-year expensing for companies setting up production capacity in the United States for plug-in electric drive vehicles and for major components of those vehicles, such as batteries, electric motors and electronic controllers.
4. Utilities. In the case that an electric utility in the United States chooses to offer rebates to customers who purchase plug-in electric drive vehicles, the FREEDOM Act would reimburse the utility for part of that rebate in the form of a Freedom Utility credit. The amount of the government reimbursement would be based on the rate of greenhouse gas emissions for each utility.

There are no short-term fixes to gasoline prices, but the principles in the FREEDOM Act are realistic goals for our country's future. Electricity-powered cars are better for the economy, the environment and national security. By supporting the FREEDOM Act and similar legislation, we will shift our nation into the fast-lane of energy self-sufficiency.

Sen. Orrin Hatch is in his sixth term as a U.S. senator from Utah.

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