2011 Houston METRO CNG Implementation Study Matt Sandidge and John Overman Texas Transportation Institute 11/30/2011 1 2 Table of Contents List of Figures ............................................................................................................................................................. 5 List of Tables ............................................................................................................................................................... 6 Key Findings ............................................................................................................................................................... 7 1. Introduction ................................................................................................................................................... 11 Purpose of the Study ....................................................................................................................................... 11 Organization of Report ................................................................................................................................... 11 2. CNG State of the Practice .......................................................................................................................... 13 Methodology for Literature Review and Peer Study ......................................................................... 13 Literature Review ........................................................................................................................................ 14 Peer Agency Selection and Data Collection ...................................................................................... 14 Purpose of Using CNG ..................................................................................................................................... 17 Historical Context ........................................................................................................................................ 17 Fuel Cost .......................................................................................................................................................... 17 Peer Agency Objectives ............................................................................................................................. 19 CNG Implementation ....................................................................................................................................... 20 CNG Fueling Station .................................................................................................................................... 20 Gas Detection ................................................................................................................................................. 23 Electrical System Improvements .......................................................................................................... 25 Heating Ventilation and Air Conditioning Improvements ......................................................... 25 Facility Upgrade Costs ............................................................................................................................... 25 Contract versus Own and Operate ....................................................................................................... 26 Peer Transit Agency Experience ........................................................................................................... 27 CNG Service Planning ...................................................................................................................................... 28 METRO Service Planning ............................................................................................................................... 30 Short‐Range Service Planning ................................................................................................................ 30 Long‐Range Service Planning ................................................................................................................. 31 Fleet Mix .......................................................................................................................................................... 31 METRO Facility Planning .......................................................................................................................... 32 CNG Incentives and Tax Credits ................................................................................................................. 34 Federal Incentives and Tax Credits ..................................................................................................... 34 State Incentives and Tax Credits ........................................................................................................... 35 Emissions Considerations ............................................................................................................................. 36 3 Historical Implications of Using CNG in Transit Fleets ............................................................... 36 Modern‐Day Implications of Using CNG in Transit Fleets ......................................................... 36 Bus Fleet Maintenance, Safety, and Training ........................................................................................ 37 CNG Safety Considerations ...................................................................................................................... 38 Maintenance Considerations .................................................................................................................. 38 Maintenance Training Considerations ............................................................................................... 38 Key Findings ....................................................................................................................................................... 39 Objectives for Using CNG .......................................................................................................................... 39 CNG Implementation .................................................................................................................................. 39 Service Planning ........................................................................................................................................... 39 Tax Credits ...................................................................................................................................................... 40 Emissions ........................................................................................................................................................ 40 Maintenance ................................................................................................................................................... 40 3. METRO Life‐Cycle Cost Comparison.................................................................................................... 41 About the LCC Model ....................................................................................................................................... 41 LCC Methodology .............................................................................................................................................. 41 Scenarios ......................................................................................................................................................... 41 Model Inputs .................................................................................................................................................. 41 Model Outputs ............................................................................................................................................... 45 Key Findings ....................................................................................................................................................... 53 4. Financial Risks Associated with Implementing CNG .................................................................... 55 Fuel‐Selection Risk Overview ...................................................................................................................... 55 Capital Cost Expenditures and Cost Recovery ..................................................................................... 56 Payback Period and Rate of Return ..................................................................................................... 56 LCC Scenario Considerations ....................................................................................................................... 61 Key Findings ....................................................................................................................................................... 62 References ................................................................................................................................................................ 65 Appendix A: Bus‐Fleet Inventory .................................................................................................................. 67 4 List of Figures Figure 2‐1 Fuel Price: Diesel versus CNG, September 2000 to July 2011 ..................................... 18 Figure 2‐2 Gas Dryer at RPTA in Phoenix, Arizona ................................................................................. 21 Figure 2‐3 Compressing Stations ..................................................................................................................