COMPRESSED NATURAL GAS

(CNG)
POTENTIAL FOR USE AS AN ALTERNATIVE VEHICLE
FUEL FOR HANOVER SCHOOL BUSES AND OTHER
VEHICLES

Hanover General Services Department with Hanover Schools Transportation Department

Presented to the Joint Education Committee, January 28, 2015

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 Background
 Growing interest in alternative fuel vehicles reducing dependence on foreign oil,
reducing fuel costs, and improving the environment.
 Public and private vehicle fleets are often considered good candidates for use of
alternative fuel vehicles.
 Typical alternative fuels are CNG, Propane Autogas, Biodiesel, and electricity.
 Hanover used biodiesel in the past when pricing was favorable.
 Chesterfield and Spotsylvania counties are using some Propane Autogas buses
and the City of Richmond has CNG vehicles.
 Propane Autogas is used successfully in school buses and fuel stations are
relatively easy to obtain.
Some consider Propane Autogas to be the fuel of today and CNG to be the fuel of
tomorrow.

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 Hanover School Bus Fleet
• Bus Fleet consists of 301 buses with 249 buses used as regular run units.

• Average bus age in model years is 9.7, with expected lifespan of approximately 15 years.

• Average bus total miles is 91,046.

• School Year 2013-14 the total bus miles travelled was 2,653,821.

• School Year 2013-14 the average miles travelled per bus was 8,817.

• Total diesel fuel consumed by school buses in the same year was 292,148 gallons.

• The average diesel price was $3.10/gallon for the same school year period.

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 Current Bus Fleet Fuel Sites
• 6 Sites total with 2 -6,000 gallon tanks, 1 for diesel and 1 for gasoline.

• Fuel site locations are:

 Beaverdam Elementary
 South Anna Elementary
 Patrick Henry High
 Hanover High
 Atlee High
 Cold Harbor Elementary

• High School buses for Patrick Henry, Atlee, and Hanover fuel at their respective
school fuel site.

• Lee-Davis buses fuel at Cold Harbor Elementary.

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 CNG Benefits
• CNG offers significant cost savings over diesel, however the current sharp decline in
petroleum prices has lessened the current savings potential.

• CNG has lower emissions of harmful pollutants and greenhouse gases.

• CNG engines are cleaner, perform well, and are easier to maintain.

• Miles per gallon for CNG engines is close to that of Diesel engines. Estimate for a
typical diesel school bus 7 MPG and 6 MPG for a CNG bus.

• CNG pricing is relatively stable and not subject to the same fluctuations as crude
oil.

• There is an abundant supply of domestic CNG.

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CNG PRICING STRUCTURE

Source: NGV America

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Fuel Pricing Trends

Source: NGV America

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Hanover Fleet CNG Opportunity
• Supervalu Foods on Richfood Road has constructed a private CNG fueling
facility.
• Supervalu is very enthusiastic about CNG for their fleet and has been very
successful in converting to CNG.
• Approximately one-half of their fleet now operates on CNG.
• They are in the process of converting all of their road tractor fleet to CNG.
• Supervalu has generously offered to permit Hanover County and Schools to
use this fuel site for CNG vehicles, including school buses.
• This assumes that there are no negative tax or regulatory implications for
Supervalu.
• At this point, it appears that Hanover would be able to purchase CNG fuel
from this site without causing any burden to Supervalu.

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 Supervalu Fuel Site
• Site constructed and financed by Trillium CNG.

• Site cost was $2.2 million and finance period is 10 years.

• Site cost will be covered by fuel cost savings over diesel.

• Fast fill site that is as fast, or faster, than a diesel pump.

• 4 minute fill time for road tractor.

• Fleet started by converting 2 road tractors to dual fuel engines.

• This worked so well they made commitment to dedicated trucks.

• Trillium CNG would be interested in potential for additional sites in Hanover if

demand for CNG could be demonstrated.
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Cost Scenarios
Price Differential Between a DGE of CNG and a Gallon of Diesel
$0.38 $0.75 $1.25 $1.92
Annual Annual Payback Annual Payback Annual Payback Annual Payback
Miles Savings in Years Savings in Years Savings in Years Savings in Years
8,000 $179 167.6 $602 49.8 $1,173 25.6 $1,939 15.5
10,000 $224 134.0 $752 39.9 $1,467 20.5 $2,424 12.4
12,000 $269 111.7 $903 33.2 $1,760 17.0 $2,909 10.3
14,000 $313 95.7 $1,053 28.5 $1,053 28.5 $3,393 8.8
16,000 $358 83.8 $1,204 24.9 $2,347 12.8 $3,878 7.7

Notes:
* Table adapted from report by Wyoming Department of Administration & Information,
Economic Analysis Division, November 2012
* DGE = Diesel Gallon Equivalent
* Price differential based on proposed cost of CNG from Supervalu compared to Hanover
January 19 cost of diesel ($0.38).
* $1.92 diffrential is for highest 2014 cost of diesel of $3.26 in April.

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 Hanover Specifics
• Supervalu CNG site is relatively close to the major areas served by the school bus
fleet.
• MapQuest driving distances to:
 Atlee High School – 3.07 miles
 Hanover High School – 5.08 miles
 Lee-Davis High School – 7.03 miles
• Two types of CNG engines available for heavy duty engines.
 Dual fuel – converted diesel engines, use mixture of diesel and CNG and are
compression ignited, conversion cost is approximately $10,000.
 Dedicated CNG engines – use CNG only and are spark ignited.
• Availability of conversion kits for school bus applications may be limited.
• Cost differential for dedicated CNG school buses is approximately $30,000.
• Availability has been limited to transit style buses.
• At least one manufacturer expected to offer Type D school buses in near future
• Hanover prefers Type D, conventional style buses.

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 Other Factors and Comparisons
• Some modifications may be required to the Fleet Facility to permit working on
CNG vehicles.
• The facility has some features that will help meet requirements such as 100%
outside air ventilation. Light fixtures and/or heat units may need replacement or
modification.
• Estimated one-time cost for modification is $50,000.
• Fleet technicians and bus drivers will need CNG training.
• Due to the investment required, most localities are taking a long-term approach
to CNG fleet conversion and replacing a few vehicles each year.
• Large cities such as Atlanta are taking this approach.
• Chesapeake, Virginia has had great success in converting its refuse fleet to CNG.
• Chesapeake has approximately 50 refuse trucks and has realized major savings
over several years.

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 Potential CNG Pilot Project
• Project assumes interest in making commitment to transition school bus fleet to CNG.
• Recommended approach would be to start with purchase of 5 new dedicated CNG
buses.
• These 5 buses would likely serve Atlee High and Hanover High areas.
• They would also be used on field trips when possible to increase mileage and savings.
• The 5 new buses would allow replacement of 5 of the oldest and worst condition buses
in the fleet.
• Projected payback: Assume savings of $3,000/year per each bus
Total Annual Savings = $15,000 for five buses
Total CNG differential cost for 5 buses = $150,000
Fleet Facility CNG Modifications = 50,000
Total Initial CNG Investment = $200,000
Estimated payback for CNG cost differential = 13.3 years
• $3,000 savings assumes annual mileage of approximately 13,000 per bus and return of
diesel prices to early 2014 levels.

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 Summary
• Currently more than 35 buses average more than 13,000 miles per year.
• Benefits from this project would be geared toward long-term sustainability.
• Cost benefits likely to be realized over longer periods as opposed to short-term
gains.
• Access to the Supervalu fuel site is a major advantage and translates into a major
cost savings for any transition to a CNG school bus fleet.
• There will be opportunities to consider other fleet vehicles for transition to CNG as
they are replaced.
• Such vehicles would be solid waste trucks, pickups, vans, and sedans.
• Current predictions estimate that oil prices will begin to increase in 1-3 years.
• Beginning the transition now to CNG vehicles would position the County and School
fleet well to meet future conditions.

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 Questions?

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