Item No. _8b_supp Meeting Date: February 26, 2019 Bus Procurement Projects Rental Car Facility Bus Purchase Employee Parking Bus Purchase Peter Lindsay and Leslie Stanton February 26, 2019 Briefing Overview • Project description - Current bus operations - Future needs • • • • Goals and objectives Alternatives and schedule Results Recommendation 2 Bus Operations Orange route serves rental car passengers, blue route serves tenant employees 3 Project Description • Rental Car Facility (RCF), C800810 - Replace 5 expiring buses and add 1 spare bus - Cost recovered through customer facility charge • Employee Parking (EP), C800956 - Replace 11 expiring buses and add 7 buses - Cost recovered through employee parking rate Airport must purchase buses to maintain service 4 Goals and Objectives • Port goals - Reduce carbon emissions - Meet growing air transportation needs - Financial sustainability of ground transportation operations • Project objectives - Maintain service - Minimize cost - Reduce carbon emissions - Minimize operational impacts Bus fleet must meet service, financial, and environmental goals 5 Project Alternatives 1. Electric buses - Requires charging infrastructure and additional buses - FAA grant available but uncertain 2. Refurbished compressed natural gas (CNG) buses with Renewable Natural Gas (RNG) - 3. New drivetrain, subsystems and interior New CNG buses with RNG - RNG is zero net carbon drop-in replacement for CNG - Other operators currently use RNG for transportation Bus technologies differ in price and operational impacts 6 Schedule • • • • • • • Analyze bus alternatives Commission authorization RNG Results/FAA grant results Develop and issue bus RFP Place bus purchase order New buses in use Mandatory bus retirement 2018 Q1-Q4 2019 Q1 2019 Q2 2019 Q1-Q2 2019 Q3 2021 Q4 2022 Q2 Alternative must be selected by February 2019 to maintain customer service Analyzing Alternatives Step 1: Objectives - Maintain service - Minimize cost - Reduce carbon emissions - Minimize operational impacts Step 2: Risks - Fuel supply - Maintenance requirements Analyzed each alternative for its ability to meet objectives and minimize risk 8 Project Costs Electric Electric w/ grant Refurbished RNG RNG Initial capital cost $36.6 $25.8 $11.6 $16.8 Average annual operational costs $0.7 $0.7 $1.0 $1.0 NPV of total cost of ownership (20 years) $57.4 $46.6 $30.8 $30.0 All costs in million USD 2018 Electric alternative has highest long-term cost 9 Carbon Reductions from RNG Sea-Tac Scope 1+2 emissions 25K 20K Electricity Fleet gas and diesel Bus CNG 15K Tons CO2 • Natural gas is 80% of Scope 1+2 emissions • RNG is zero-carbon drop-in replacement for natural gas 10K Natural gas boilers 5K K RNG for buses and boilers reduces Sea-Tac's Scope 1+2 emissions by 80% 10 Carbon Emissions Carbon emissions (tons CO2/year) • CNG Electric - Green Direct Electric - PSE Grid Mix Refurbished RNG RNG 1,220 20 430 0 0 Expiring buses create 5% of Sea-Tac's Scope 1 and 2 carbon emissions RNG and electricity have similar carbon reduction benefits 11 RNG Cost and Availability • Port RFP issued Jan 12th for RNG - Supplies airport boilers and existing CNG bus fleet - Seeking 10 to 20-year term • Federal credits (RINS) support RNG for transportation - Bipartisan support; low long-term risk - RINS currently greater than CNG commodity price RNG is currently available and long-term source is likely 12 RNG Cost and Availability • Other U.S. airports outside of California have procured RNG at similar cost to CNG • RNG Facilities as of Jan 2019 - 90 in operation - 21 under construction - 41 under development RNG price is likely similar to CNG price for buses 13 Objectives and Risks Objective Electric Refurbished RNG RNG Objectives Maintain service Minimize total cost of ownership Reduce carbon emissions Minimize operational impacts Risks Fuel supply and price Maintenance requirements New CNG buses w/ RNG meet objectives with minimal risk 14 Recommendation New CNG buses fueled with RNG • Meets objectives - Reduces maximum amount of carbon - Minimizes total cost of ownership - Minimizes operational impacts • Minimizes risk - Less maintenance downtime than refurbished buses - Allows EV technology to mature and prices to fall - Port can revisit electric option prior to next bus replacement Recommend purchasing new CNG buses and fueling them with RNG 15 APPENDIX 16 Electric Utilities at Sea-Tac S 17 N Carbon Emissions RNG does not add carbon to the atmosphere 18 NPV of Project Costs (20 years) Electric Electric w/ grant Refurbished RNG RNG Total cost of ownership $57.4 $46.6 $30.8 $30.0 Charger capital and installation $10.4 $5.0 $0 $0 Initial bus capital $25.2 $19.8 $10.8 $15.2 Bus replacement $11.4 $11.4 $5.2 $0 Fuel $2.9 $2.9 $3.2 $3.2 Maintenance $7.5 $7.5 $11.5 $11.5 All costs in million USD 2018 Electric alternative has highest long-term cost 19 NPV of Project Costs (20 years) Electric alternative has highest long-term cost 20 Project Cost Summary Rental Car Buses - 6 new CNG buses Employee Parking Buses - 18 new CNG buses Totals Current Budget $1,800,000 $18,081,000 $19,881,000 Budget Increase/(Decrease) $2,603,000 ($5,646,000) ($3,043,000) Revised Budget $4,403,000 $12,435,000 $16,838,000 Recommended alternative results in net ~$3 million overall budget reduction Carbon Reductions Relative to CNG RNG Electric - Green Direct Electric - PSE Grid Mix Emissions reduced relative to CNG (tons CO2/year) 1,220 1,200 790 $/ton of CO2 reduced relative to CNG $0 $1,140 $1,760 RNG and electricity have similar carbon reduction benefits 22 Comparable Bus Operators • • • • • • Pierce Transit: primarily CNG Community Transit: diesel Microsoft: diesel and gasoline Amazon: diesel UW: gasoline Children's Hospital: gas/propane bi-fuel With RNG, the Port would remain a regional sustainability leader 23