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HomeMy WebLinkAboutMinutes Corpus Christi Regional Transportation Authority - 04/02/2008 - Workshop bA1`d8 1920�Ta F�J �^•a REGIONAL TRANSPORTATION AUTHORITY BUS PROCUREMENT WORKSHOP e� MAY 2008S,9 WEDNESDAY, APRIL 2, 2008 5' CITY SECRETARY'S SUMMARY OF ACTIONS `�'� OFFICE r , 1. Staff Introductory Remarks and Bus Procurement Discussion — _�� 2. Overview of Assessment Process 3. Analysis and Findings a. Operational Issues b. Environmental Benefits c. LifeCycle Financial Analysis 4. Other Considerations and Discussion Board Members Present: Crystal Lyons; Anna Flores; John Longoria; Dr. Maurice Ports; Ricardo Ramon; Mike Rendon; Sara Salvide; Judy Telge; John Valls Board Members Absent: Mannti Cummins; David Martinez Staff Present: Ricardo Sanchez (General Manager), David Seiler, Beth Vidaurri, Elias Sissamis, Ponch Carrillo, Ed Carrion, Sylvia Castillo, Ramon Sanchez, Lamont Taylor Public Present: Martha Gray, League of Women Voters; Abel Alonzo; Jeffrey Arndt, Research Scientist, with Texas Transit Institute Call to Order Ms. Lyons called the meeting to order 10:31 a.m. Staff Introductory Remarks and Bus Procurement Discussion Following a historical review, Mr. Seiler stated that in September 2007 a Request for Proposals (RFP) had been issued for bus procurement to replace thirty-seven buses over the next four years. In response to the Board's interest in using alternative fuels, the proposers were asked to submit proposals for three primary fuel/propulsion systems: compressed natural gas (CNG); ultra-low sulfur diesel (ULSD); and diesel hybrid-electric. In October 2007, the Board approved entering into an Intergovernmental Agreement with the Texas Transportation Institute (TTI) for assistance in analyzing the alternative fuel and propulsion systems offered in responses to the RFP. A review committee was formed to evaluate the criteria used in TTI's assessment. In summary, Mr. Seiler stated that at the April 22, 2008 Operations Committee, staff would be requesting action from the Board on the fuel technology, based on the Board's guidance after this workshop, and for approval to proceed with the bus procurement. SCANNED regional Transportation Authority Bus Procurement Workshop Minutes April 2,2008 Page 2 Mr. Sanchez introduced Mr. Jeffrey Arndt, Research Scientist, with TTI. He cited Mr. Arndt's experience and education background. Overview of Assessment Process Mr. Arndt explained that his team had conducted interviews with RTA Board Members as well as with RTA staff and key community leaders. Mr. Arndt explained his PowerPoint presentation was organized into three sections: 1) operational issues; 2) environmental benefits; and 3) life cycle costs. He pointed out the Board Members' interest in examining alternative fuels were environmental benefits, operating cost savings, decreased reliance on foreign fuel, decreased exposure to fuel price volatility, and the opportunity to partner with the City of Corpus Christi to provide natural gas products,and be a leader in the community Referencing industry operating experience, Mr. Arndt displayed charts depicting the national fueling composition of bus fleets in the United States. Based on the 2006 National Transit database, he stated that 79% of the fleets were fueled by diesel and 21% were fueledby alternative fuels— CNG, Hybrid, or dual. The predominate alternative fuel used was CNG. Regarding CNG, Mr. Arndt noted that since 2004 only about 5% of agencies had entered the CNG market. Beginning 2007new bus procurements must be completed with 2007 emissions standards. Many transit agencies were deliberating their fuel choices due to the changing standards. He cited four large agencies that had CNG reversed their position and moved into using clean diesel and/or electric hybrid. They were New York City; Washington, DC; Boston; and Cleveland Ohio. Atlanta, Georgia maintained their commitment to CNG. Discussing hybrid, Mr. Arndt said that based on the 2007 American Public Transportation Association survey, hybrids represent 22% of buses on order. Reviewing major Texas transit systems fleet composition, Mr. Arndt stated that 70% of El Paso's fleet was natural gas and Fort Worth was at 100%. Laredo's fleet was 70% CNG and 30% diesel. Houston, Dallas, Austin and San Antonio were 100% diesel. In response to Mr. Rendon, Mr. Arndt replied that the Dallas Area Transit Agency (D.A.R.T.) appeared to be making a change to clean diesel instead of continuing with Liquefied Natural Gas (LNG) based on economic analysis. He noted that every circumstance has different considerations. Speaking about the current fuel commitments of Texas systems, Mr. Arndt reported that El Paso and Fort Worth were committed to CNG; Laredo was going from their 70/30 CNG/Diesel split to 50/50; Houston was ordering hybrids; Dallas was moving from LNG kegional Transportation Authority Bus Procurement Workshop Minutes April 2,2008 Page 3 to diesel; and both Austin and San Antonio were replacing a few of their diesel buses with a few hybrids. He noted that Fort Worth and El Paso had the needed infrastructure for CNG and were satisfied with the fleet's performance. Houston was not in a position to operate either CNG or LNG fleet. Mr. Arndt explained that CNG early generation vehicle concerns, equipment sensitivity, vehicle range, and fueling time, were no longer a concern. He pointed out that natural gas ventilates naturally. Also with proper training and caution, safety would not be an issue. The primary concern was the high pressure of the system. To operate a CNG station, Mr. Arndt said that maintenance personnel would require training and a dedicated staff position would be necessary for the fueling station. Additional staff could be needed in the early stages, but that the long-term staffing requirement would be only nominally more than diesel. The Bus Drivers would need orientation to the new system components and reassurance regarding the fuel safety. The Technical Review group had identified three issues. During a regional evacuation, if needed, CNG fueling stops would need to be pre-planned; only Cummins made the CNG engine; and the primary CNG fuel supplier would be the City of Corpus Christi. This would provide an opportunity to partner with the City on this project. In summary, Mr. Arndt said that all three fuel options would introduce new technology with CNG introducing the largest change. He commented that CNG was a mature technology that would be able to meet the operability requirements. Hybrid buses were a less mature technology; diesel was a standard technology; and electric hybrid buses were achieving maturity. He stated that diesel and CNG operability were comparable. Addressing the environmental benefits, Mr. Arndt provided an overview of Corpus Christi's air quality history. He stated that the City was still in conformance with new EPA standards. The two pollutants and emission components were NOx and PM (particulate matter). He explained that NOx interacted with sunlight and other emissions which produced ground level ozone, an element that determined non-attainment. Particulate Matter (PM) are fine particles and water droplets that are inhaled. Both of these irritate lungs and create respiratory problems. Mr. Arndt stated that NOx levels were the primary level of vulnerability for Corpus Christi. On-road vehicles, using 1998 standard buses, contributed 26.9% and RTA's 75 vehicles contributed 0.36% of the region's NOx. He reviewed the historical, present, and future NOx and PM standards set by EPA. A varied discussion ensued regarding the potential health impact diesel fumes have on riders and mechanics. Referencing greenhouse gases, Mr. Arndt reported that 82% of gases are carbon dioxide, which is the heaviest gas, and is generated by burning of fuel and leads to icegional Transportation Authority Bus Procurement Workshop Minutes April 2,2008 Page 4 global warming. ULS diesel or CNG emissions are equivalent and hybrid provides a small advantage. In summary, Mr. Arndt stated that current diesel and CNG engines produced similar levels of greenhouse gases and PM (particulate matter); comparing diesel bus emissions of NOx between 1991 and 2007 —.diesel buses reduced NOx by 76%, and CNG buses reduced NOx by 96%; by 2010 diesel and CNG buses would produce equivalent emissions levels with hybrid providing the largest total reduction in emissions. Discussing life cycle costs, Mr. Arndt referenced a cost model developed by West Virginia University in 2007. He explained that he had modified the model to reflect current information or information specific to Corpus Christi RTA. Drivers' wages were not included in the analysis. The model was based on all 75 RTA buses using the same fuels. Mr. Arndt explained the basis of his capital cost assumptions: 1) the capital costs were spread over the lifetime of either vehicle (12 years) and facility (15 years); 2) bus fleet assumed at 75, operating 37,000 miles annually; 3) based on 40 foot bus; 4) all dollars were constant, assuming no debt; and 5) translated all the "cost per bus per mile" over the lifetime of the bus. The vehicle cost analysis model, minus the RTA-specified ITS and special chassis costs, as explained by Mr. Arndt, used the lowest cost of each of the types of vehicles based upon the pricing received in the proposals with the exception of the experimental hybrid bus received in one proposal. The CNG bus price was $409,963; the ULDS bus price was $319,240; and the hybrid bus price was $522,240. The next cost factor discussed by Mr. Arndt was for facility infrastructure (refueling station). He noted that only the CNG option incurred incremental additional refueling station costs. With a two compressor facility, the estimated cost was $4 million and would provide redundancy to address any potential problems. Discussing station modifications, Mr. Arndt stated that for CNG, significant modifications to the inside of the garage related to safety would be needed such as gas sensing and forced venting. He used the median value of$875,000 for these modifications. If hybrid was used, modifications to provide for battery charging would have an estimated cost of $140,000. Both modification costs were spread over a 15-year life. In summary, Mr. Arndt stated that the capital cost per bus mile, using his model was $0.719 for ULS diesel; $1.039 for CNG; and $1.180 for hybrid. Reviewing the operating cost assumptions, Mr. Arndt stated that fuel economy based on miles per gallon was 3.27 for CNG; 3.78 for ULSD; and 4.58 for hybrid. He detailed the icegional Transportation Authority Bus Procurement Workshop Minutes April 2,2008 Page 5 references used for estimating the fuel costs per bus mile. The updated 2008 fuel costs per bus mile were $0.46 (or$.51/gal) for CNG; $0.68 (or$2.57/gal) for ULSD; and $0.57 for hybrid. Mr. Arndt pointed out that diesel and natural gas costs had a high degree of correlation and that was why Laredo was moving towards a 50/50 mix. Referencing propulsion-related system maintenance costs, Mr. Arndt stated that since the costs were less than 10% of the total, the differences were not significant. Concerning facility operations and maintenance cost, Mr. Arndt said that for the compression of the CNG fuel, he added an incremental electricity cost of$0.05 per mile over diesel. Battery maintenance for hybrids was estimated at $40,000 per replacement cost every 6 years. The Board was informed by Mr. Arndt about the following fuel related benefits: a State rebate on diesel fuel of$0.005 per gallon; a tax credit of$0.50 per 121 cubic fee of CNG which expires on September 30, 2009; a tax credit for 30% of refueling equipment up to $30,000 which expires on December 31, 2009; a tax credit on vehicles for 80% of incremental cost of vehicle up to $32,000, and that a Texas Emission Reduction Program (TERP) funding was not available to the Corpus Christi region. In summary, Mr. Arndt cited the following compiled operating cost per bus mile projection: ULS diesel at $0.892; CNG at $0.713; and hybrid at $0.938. Updating the Board on the impact the proposed 2010 technology changes would have, Mr. Arndt said that diesel fuel cost would likely increase; installation of UREA tanks would be required that would equate to an added vehicle cost. No upgrades would be required for the CNG technology, and the cost of operate CNG buses would not increase because they were already 2010 compliant. The additional cost for CNG would drop to $214,425 per year and hybrid would drop to $1.289 million per year. In conclusion, Mr. Arndt said that all options are "near operational"; all fuels were "clean" compared to the fleet being replaced; all fuels would be equivalently "clean" by 2010; and even with the operating savings of the alternative fuel systems, CNG and hybrid did not off-set their initial capital investment. Mr. Arndt explained that the primary reason for RTA to change to alternative fuel would be for: (1) environmental benefits; (2) operating cost savings; (3) decreased reliance on foreign fuel; (4) decreased exposure to price volatility; and 0 the opportunity to "partner" with the City if it were to convert its heavy fleet to CNG. tUJ ' itegional Transportation Authority Bus Procurement Workshop Minutes April 2,2008 Page 6 Other considerations and discussion Responding to Ms. Telge, Mr. Arndt stated that the funding sources for the vehicle procurement would be explained by staff when it was presented to the Board for approval. Ms. Salvide inquired about the impact each option would have on the operating budget. Mr. Sissamis responded that according to the TTI analysis, prior to the 2010 technological changes in fuel emissions standards, the annual impact of each option would be an additional cost of$391,000 for the CNG alternative and $1.4 million for the hybrid alternative. After 2010 the potential additional cost would be $214,000 for CNG, assuming receipt of the tax credit, and $1.3 million for hybrid compared to running a diesel based fleet. Ms. Lyons noted two variables that could affect the budget impact such as entering into partnerships and different fuel pricing over the life of the improvements. Staff also confirmed that it was not yet certain, though very likely, that the diesel manufacturers will be able to comply with the 2010 emissions standards. There was also discussion on the possibility that alternative fuel incentives could be extended beyond the planned sunset expirations. If the Board chose the hybrid or CNG option, Mr. Sissamis responded that the Agency would likely be required to purchase fewer buses to offset the additional capital costs per bus. Ms. Lyons pointed out that Mr. Sissamis' estimated cost impact was based on a 20-year life cycle model and Mr. Arndt had used a 15-year life cycle model. There was a brief discussion on the hybrid technology. The consensus of the Board was that Staff was not to pursue the hybrid technology. Ms. Lyons stated that more information was needed regarding potential funding options. A brief discussion ensued regarding community partnerships for operating an alternative fuel fleet. The consensus of the Board was that Staff explore viable partnerships. Regional Transportation Authority Bus'Procurement Workshop Minutes April 2,2008 Page 7 Adjournment There being no further business, the meeting was adjourned at 12:34 p.m. Dr. Maurice Po is, Board Secretary Date