AUSTIN, Texas — On Wednesday, the U.S. Department of Energy (DOE) announced the award of $12.6 million to the Railroad Commission of Texas, the state’s energy agency, for the purchase of 245 propane school buses and 637 other vehicles.

The DOE Clean Cities grant funds, part of the American Recovery and Reinvestment Act, are matched by $37.7 million from the grant participants.

The grant also includes about $2 million to install 35 propane refueling stations on properties owned by partner fleets. The stations will allow fleets to lower costs by buying fuel in bulk, access federal motor fuel excise tax credits and refuel at the times most convenient to their schedules.

According to commission officials, the agency aims to reduce consumption of petroleum by 12.1 million gallons and increase consumption of propane by 15.9 million gallons in the U.S. The majority of propane is produced in North America as a by-product of natural gas processing. Greenhouse gas emissions will also be reduced, as propane is cleaner burning compared to diesel engines. Fleets new to propane will be located near experienced propane fleets to increase their chances of success, officials say.

Local dealers have been assisting school districts in submitting applications for the grant money, about half of which will help offset the incremental cost of purchasing new school buses. In addition, because refueling equipment will be manufactured within the state, the project will also lead to “green” job retention and creation for Texas, according to officials.