2011 Capital Metro CNG Implementation Study Matt Sandidge and John Overman Texas Transportation Institute 11/30/2011 Table of Contents List of Figures ............................................................................................................................................................. 4 List of Tables ............................................................................................................................................................... 5 Key Findings ............................................................................................................................................................... 6 1. Introduction ...................................................................................................................................................... 9 Purpose of the Study .......................................................................................................................................... 9 Organization of Report ................................................................................................................................... 10 2. CNG State of the Practice .......................................................................................................................... 11 Methodology for Literature Review and Peer Study ......................................................................... 11 Literature Review ........................................................................................................................................ 12 Peer Agency Selection and Data Collection ...................................................................................... 12 Purpose of Using CNG ..................................................................................................................................... 15 Historical Context ........................................................................................................................................ 15 Fuel Cost .......................................................................................................................................................... 15 Peer Agency Objectives ............................................................................................................................. 17 CNG Implementation ....................................................................................................................................... 18 CNG Fueling Station .................................................................................................................................... 18 Gas Detection ................................................................................................................................................. 23 Electrical System Improvements .......................................................................................................... 23 Heating Ventilation and Air Conditioning Improvements ......................................................... 23 Facility Upgrade Costs ............................................................................................................................... 23 Contract versus Own and Operate ....................................................................................................... 24 Peer Transit Agency Experience ........................................................................................................... 26 CNG Service Planning ...................................................................................................................................... 27 Capital Metro Service Planning .................................................................................................................. 28 Short‐Range Service Planning ................................................................................................................ 28 Long‐Range Transit Planning ................................................................................................................. 30 CNG Incentives and Tax Credits ................................................................................................................. 31 Federal Incentives and Tax Credits ..................................................................................................... 31 State Incentives and Tax Credits ........................................................................................................... 32 Emissions Considerations ............................................................................................................................. 33 Historical Implications of Using CNG in Transit Fleets ............................................................... 33 Modern‐Day Implications of Using CNG in Transit Fleets ......................................................... 33 Bus Fleet Maintenance, Safety, and Training ........................................................................................ 35 2 CNG Safety Considerations ...................................................................................................................... 35 Maintenance Considerations .................................................................................................................. 35 Maintenance Training Considerations ............................................................................................... 35 Key Findings ....................................................................................................................................................... 36 Objectives for Using CNG .......................................................................................................................... 36 CNG Implementation .................................................................................................................................. 36 Service Planning ........................................................................................................................................... 36 Tax Credits ...................................................................................................................................................... 37 Emissions ........................................................................................................................................................ 37 Maintenance ................................................................................................................................................... 37 3. Capital Metro Life‐Cycle Cost Analysis ............................................................................................... 39 About the LCC Model ....................................................................................................................................... 39 LCC Methodology .............................................................................................................................................. 39 Scenarios ......................................................................................................................................................... 39 Model Inputs .................................................................................................................................................. 39 Model Outputs ............................................................................................................................................... 43 LCC with Credits ........................................................................................................................................... 49 Key Findings ....................................................................................................................................................... 50 4. Financial Risks Associated with Implementing CNG .................................................................... 51 Fuel‐Selection Risk Overview ...................................................................................................................... 51 Capital Cost Expenditures and Cost Recovery ..................................................................................... 52 Payback Period and Rate of Return ..................................................................................................... 52 Capital Metro Procurement Considerations .................................................................................... 55 LCC Scenario Considerations ....................................................................................................................... 56 Key Findings ....................................................................................................................................................... 57 References ................................................................................................................................................................ 59 Appendix A: .............................................................................................................................................................. 60 Bus‐Fleet Inventory and Rehabilitation Analysis .................................................................................... 60 3 List of Figures Figure 2‐1 Fuel Price: Diesel versus CNG, September 2005 to July 2011 ..................................... 16 Figure 2‐2 Gas Dryer at RPTA in Phoenix, Arizona ................................................................................