1. Public Transit Department Bus and Fuel Procurement Strategy AzTA/ADOT Transit Conference April 2013

2. Phoenix Public Transit Department Managing department for City transit services Local bus routes Phoenix Dial-A-Ride RAPID commuter service Neighborhood circulators Alternative transportation programs for seniors and disabled Operates 47 out of 100 bus routes in the Valley Over 37 million bus passenger boardings annually 65% of regional bus boardings

3. Background Current heavy duty transit fleet 305 liquefied natural gas (LNG) buses 160 ultra-low sulfur (ULSD) diesel buses Fleet mix: 65:35 ratio of alternative fuel (LNG) to clean burning diesel buses Origin of Fleet Mix Comply with state mandated clean air standards Comply with 2003 City Council policy on fuel diversification Mitigate interruptions to fuel supply Ensure fuel supply for emergency operations

4. Phoenix Public Transit Department

5. FY2011-12 Fuel Budget

6. Background 240, 40-foot buses eligible for retirement Bus is eligible for retirement once Federal interest in asset is fulfilled: at least 12 years of service or an accumulation of at least 500,000 miles (FTA Circular 5010.1) Fuel considerations Identification of transit fuel alternatives Procurement of new fuel contract (Exp: June 2013)

7. Fuel Consultant Study Fuel consultant: Gladstein, Neandross & Associates Analyzed alternative fuel options for the transit bus fleet Assisted the City in developing a long-term fuel strategy for the transit fleet and future vehicle purchases Reviewed alternative fuel technologies: Natural gas Diesel Electric Hybrid technologies Some fuel technologies were rejected due to higher overall costs and limited transit use / range

8. Fuel Consultant Study Alternative Fuels – Natural Gas Overview Liquefied Natural Gas Natural gas that has been cooled to very low temperatures (-260˚F) to liquid form Trucked to fueling stations in super-cooled state Compressed Natural Gas Natural gas compressed to increase energy density Allows for distribution via pipeline Liquefied Compressed Natural Gas Natural gas is delivered in super-cooled liquid form; converted to compressed natural gas at the fueling station Allows utilization of existing facilities

9. Fuel Consultant Findings Natural gas buses present the lowest total cost and greatest savings over the life of the vehicle as compared to diesel or other alternative fuels Estimated fuel savings of $200K per bus during its lifecycle

10. LNG Fuel Considerations Liquefied Natural Gas (LNG) Has become outdated for purposes of transit vehicle use Feedback from transit contractors: difficult to maintain equipment; obtain parts (longer down times) Premium for LNG buses - $90,000 more per bus versus diesel; $35,000 more than CNG Limited specialty fuel equipment suppliers Higher maintenance costs for vehicles Specialized equipment required for fuel storage, dispensing, and fueling staff protection

11. Transit Fuel Comparison LNG: Estimated 1,130 LNG transit buses nationwide Over 400 buses are in Phoenix (COP/RPTA Valley Metro) Facility maintenance costs similar to, but less than CNG Lower carbon emissions than diesel; more than CNG $35,000 - $90,000 price premium per vehicle CNG: Estimated 14,000 CNG transit buses nationwide Facility maintenance costs similar to, but more than LNG Lower carbon emissions than diesel and LNG $35,000 savings per vehicle over LNG bus Compressed natural gas (CNG) is a clean, domestic, highly cost- effective option to other alternative fuels

12. Transit Fuel Comparison Fuel TechnologyBus Cost Fuel Economy (miles/DGE) Fuel Cost (per DGE) Diesel$436,8774.01$3.42 LNG$524,8773.05$1.51 LCNG$490,9153.05$1.59 CNG$490,9153.05$1.31 Diesel hybrid$636,8775.01$3.42 Bus/Fuel Cost Analysis DGE = Diesel Gallon Equivalent

13. Transit Fuel Comparison Cost savings over a 12-year period associated with replacing 392 buses total (336 40-ft., 56 45-ft.) with selected fuel type below in lieu of diesel fueled buses

14. Consultant Recommendations PTD initiate liquefied compressed natural gas (LCNG) fueling capabilities at its existing capital transit facilities because of ease of conversion Move to CNG as long-term fuel source when LNG is no longer necessary for fueling vehicles

15. Bus and Fuel Procurement Strategy Fueling transition Short term: LCNG fueling Continue purchase of LNG fuel Convert LNG to CNG fuel dispensing utilizing existing infrastructure Long term: Pipeline CNG fueling Purchase CNG buses Utilize existing Valley Metro/RPTA contract – 120 buses $61M: 83% federal funds / 17% regional transportation funds Savings of $4.2M versus LNG buses Future regional procurement for 40’ buses Facility Improvements Phased LCNG improvements to coincide with bus deliveries $4M T2000 funds over next three years

16. Bus and Fuel Procurement Strategy Timeline Buses Fall 2013: 60 buses Spring 2014: 60 buses 40 annually thereafter LCNG Infrastructure LocationDesignConstructionOperationalEstimated Costs West Transit FacilityMarch 2013July 2013December 2013$1.5M North Transit FacilityMarch 2013October 2013February 2014$1.2M South Transit FacilityMay 2013December 2013September 2014$1.3M

17. LNG to CNG Transition Challenges: Coordinating delivery of new CNG vehicles with completion of LCNG upgrades Complete conversion to CNG over the next 7-10 years Natural gas pipeline availability/capacity at each transit facility Additional capital funding for final CNG infrastructure

18. Summary Received Phoenix City Council Approval on January 8, 2013 to implement our fuel and bus procurement strategy, including: Transition from liquefied natural gas (LNG) to compressed natural gas (CNG) Purchase 120 forty-foot CNG buses to replace retirement-eligible LNG buses Issuance of an Invitation for Bids (IFB) for the continued delivery of natural gas for use in transit buses Facility improvements at the three transit operating facilities to provide the necessary fueling infrastructure to accommodate the transition to CNG buses within Phoenix’s transit fleet

19. Phoenix Public Transit Department

21. Questions ? Thank you!