HomeMy WebLinkAbout2. Alternative Fuel StudyMount Prospect Public Works Department
INTEROFFICE MEMORANDUM
TO: ACTING VILLAGE MANAGER DAVID STRAHL
FROM: DIRECTOR OF PUBLIC WORKS
DATE: JULY 9, 2015
SUBJECT: ALTERNATIVE FUEL STUDY REPORT
This memorandum transmits the Alternative Fuel Study written report prepared for the Village of
Mount Prospect by public fleet management consultant Mercury Associates, Incorporated of
Rockville, Maryland (Mercury).
Mercury was awarded a contract for this work at the December 16, 2014 Village Board meeting.
This project is commensurate with stated objectives of the Village's Strategic Plan
(Infrastructure / Environmental Sensibility / Explore opportunities to provide "Green Initiatives")
and Energy Strategy Plan (Consider purchasing alternative fuel vehicles for village fleet).
The report presents analyses and recommendations regarding the viability of utilizing alternative
fuel technologies in the village -owned fleet of vehicles. Mercury, working in conjunction with
Public Works Department vehicle maintenance staff, considered each locally available
alternative fuel technology according to a "triple bottom line" methodology.
The "triple bottom line" approach involved analysis of environmental benefits, operational
efficacy, and financial cost of each fuel technology. Accordingly, the report is technical and
detailed. However, the salient conclusions are succinctly stated in the "Executive Summary"
section at the beginning of the report.
In short, each fuel technology provided some environmental benefit; however, none of the
available technologies seem operationally viable or cost effective at this time.
Representatives from Mercury, along with village staff, will present thef'ndings of this report and
facilitate ensuing discussion at the July 14, 2015 Committee of the Whle meeting.
Sean P. Dorsey
Cc: Deputy Director of Public Works Jason Leib
Vehicle/Equipment Maintenance Superintendent Jim Breitzman
Mercury Associates, Inc.
Final Report for
Alternative .
Study
for
Mount Pt•c spcc:t
,July 2015
MERCURY ASSOCIATES, INC.
gt4uc��r
July 8, 2015
Mr. Jim Breitzman
Vehicle Maintenance Superintendent
Village of Mount Prospect
1700 W. Central Road
Mount Prospect, IL 60056
Dear Mr. Breitzman:
Mercury Associates, Inc. is pleased to submit this final report on the alternative fuel
study, covering the Village's fleet replacement requirements and various alternative fuel
scenarios.
We appreciate having been given the opportunity to assist the Village of Mount
Prospect in this endeavor.
Very truly yours,
Scott Conlon
Senior Consultant
Mercury Associates, Inc. • www.mercury-assoc.com
7361 Calhoun Place, Suite 680 • Rockville, MD 20855 • 301 519 0535
Alternative Fuel Study
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TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................. 1
INTRODUCTION.......................................................................................................................... 2
BACKGROUND............................................................................................................................ 3
PROJECT APPROACH AND METHODOLOGY.......................................................................... 4
NON-AFV FLEET REPLACEMENT PLAN................................................................................... 4
NON-AFV BASELINE REPLACEMENT PLAN......................................................................... 5
NON-AFV SMOOTHED REPLACEMENT PLAN...................................................................... 7
FEASIBILITY AND COSTS OF ALTERNATIVE FUEL VEHICLES .............................................. 9
ALTERNATIVE FUEL USE IN EXISTING FLEET................................................................... 10
ALTERNATIVE FUEL USE THROUGH VEHICLE REPLACEMENT ...................................... 14
ENVIRONMENTAL IMPACTS.................................................................................................424-9
COMPARATIVE REVIEW.......................................................................................................4546
APPENDICES.........................................................................................................................4746
►TII�i�1�1[1,11,
EXECUTIVE SUMMARY
Alternative Fuel Study
Final Report
Mercury Associates has prepared this Alternative Fuel Study to assist the Village of
Mount Prospect in identifying opportunities to both save money through the adoption of
alternative fuels and reduce the emissions of the Village fleet.
The first component of the study involved the development of a fleet replacement plan
that would serve as a benchmark for comparisons of the various alternative fuel
scenarios. The replacement plan identifies the future replacement timing and costs for
each asset in the Village fleet. Replacement plans were developed for each alternative
fuel replacement scenario that mirrored the replacement timing, leaving the only
variable to be the capital costs of replacement. These costs were imported into a
lifecycle analysis model that included other information related to the capital
infrastructure costs, fuel consumption, and various operating costs associated with the
alternative fuel implementation.
The second component of the project involved the identification of the various
alternative fuel options that could potentially be operationally and financially feasible. By
prioritizing our analysis on the classes of vehicles that were the largest consumers of
fuel in 2014, we were able to quickly hone in on the best opportunities for alternative
fuel implementation. For each alternative fuel where these opportunities existed, a
lifecycle cost analysis was conducted for each of the classes of vehicles that would be
converted over to alternative fuel.
In the third component of the study, we used the fuel consumption patterns for the fleet
by vehicle to identify where there would be reductions in greenhouse gas emissions and
petroleum consumption.
The results of the analysis indicate that there aren't any opportunities for
alternative fuel implementation in the Village fleet that are both operationally and
financially feasible. Highlights of the analysis are included in the list below:
• Biodiesel, while not providing a return on investment in strict financial terms,
provides environmental benefits. The largest area of concern with biodiesel is the
decreased shelf life of the fuel causing operational problems for seasonal
equipment.
• Ethanol, while operationally feasible for the majority of the Police Department
fleet, would not provide a return on investment. Despite ethanol costing less per
gallon than gasoline, its lower energy content would increase total consumption,
thereby increasing fuel costs. Should the Village choose to use ethanol, it would
come at an increase in cost; however ethanol's renewable sourcing would
provide the most petroleum consumption and greenhouse gas reductions at the
lowest cost in the near-term.
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• Compressed Natural Gas, or CNG, has such high infrastructure costs that the
payback period is too long to be financially feasible. While some jurisdictions are
using CNG successfully, the Village lacks a high -usage application (e.g., a transit
or refuse collection fleet) that would offset enough gasoline or diesel
consumption to make financial sense. The public CNG fuel site in Des Plaines
was also evaluated as an option, but the travel costs and staff time associated
with acquiring fuel there would be prohibitive. Should the Village choose to adopt
CNG, it would be wedding itself to an investment at the risk of not being able to
adopt other technologies that may mature more quickly.
• Liquefied Natural Gas, or LNG, was not found to be locally available. If it were
though, it would not prove to be financially feasible due to the same types of
infrastructure cost -barriers that were described in the preceding paragraph on
CNG.
• Liquefied Petroleum Gas (LPG or Propane Autogas), also proved not to be
financially feasible. While the capital cost barriers are much lower than with CNG,
the fuel price is not low enough to compensate for the decreased energy content
of the fuel.
• Hybrid Electric Vehicles proved not to be operationally feasible in any of the
vocations where there was high enough usage to make financial sense. In Police
applications, which have the highest fuel consumption, the rigors of emergency
response duties dictate that vehicles be designed with severe service in mind.
The adoption of alternative fuel vehicles in these vocations would not be in
conformance with industry practice.
• Plug-in Hybrid Electric Vehicles shared the same operational limitations as the
HEVs mentioned above, but with the added detractor of requiring charging
station infrastructure to be installed. Despite operating costs being lowered by
the use of electricity in place of gasoline, the capital costs of charging station
purchase and installation proved to have a much longer payback period than
would be considered acceptable.
Each of the alternative fuel scenarios carry with them the environmental benefits of
reducing petroleum consumption and greenhouse gas emissions from current levels,
however these same reductions can be realized to some extent through replacement
with newer, more fuel-efficient vehicles.
INTRODUCTION
This report presents the findings of research conducted by Mercury Associates, Inc.
(hereafter Mercury) to assess the costs and benefits for the Village of Mount Prospect
(hereafter the Village) to purchase alternative fuel vehicles (AFVs). The Village and
Mercury are conducting this alternative fuel study in parts; in the first part, Mercury has
evaluated the feasibility of incorporating AFVs into the fleet. As part of this process,
Mercury has developed a replacement plan that projects the future replacement dates
and costs by asset over a 40 -year period. Mercury projected these dates and costs
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using the Village's replacement parameters and fleet inventory records. The purpose of
developing this plan is three -fold. First, it serves as a replacement plan in the event that
the Village chooses not to adopt any alternative fuels. Second, it allows us to identify
the anticipated improvements in fuel economy that the Village would benefit from as it
replaces vehicles. Vehicle fuel economy improves, on average, with each new model
year, and the Village will benefit from these improvements through vehicle replacement,
regardless of which fuels are adopted. Third, the plan identifies the timing of future
replacements, which provides context to the analysis (i.e., vehicles scheduled for
replacement in the near future are good candidates for replacement with AFVs, but are
not good candidates for conversion to AFVs, and vice versa).
Also as part of this report, Mercury has modelled the environmental impacts of the
various scenarios. For each fuel type, we have evaluated multiple scenarios to account
for the uncertainty that exists around assumptions used in the analysis. For example, if
a fuel tax rebate is currently available, but may not be in the future, we have analyzed
the costs both ways to see if it changes our recommendation.
BACKGROUND
The Village of Mount Prospect has a population of 54,167, is approximately ten square
miles in size, and is located 22 miles northwest of downtown Chicago. The Village
operates a fleet of approximately 230 vehicles and pieces of equipment that are divided
amongst several departments, including Police, Fire, Public Works, and various
administrative divisions (hereafter referred to as the "Pool" fleet). The Village fleet is
managed by the Public Works Department (PWD), which operates a repair facility
staffed by Village employees.
In April of 2010, the Village published its Energy Strategy Plan, which outlines the
Village's energy efficiency and conservation goals. Among these goals are reductions in
the use of non-renewable energy sources and reductions in greenhouse gas emissions.
The plan generally encourages the adoption and use of alternative fuel vehicles by the
public, and specifically identifies the Village fleet as being an area where alternative fuel
vehicles can be purchased.
In December of 2014, the Village engaged Mercury, a professional fleet management
consulting firm, to conduct an alternative fuel study of the Village's fleet. The purpose of
the study is to assess the feasibility of introducing AFVs through replacement plan
development and total cost of ownership analyses, and to quantify the costs and
environmental impacts of AFV implementation.
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PROJECT APPROACH AND METHODOLOGY
The following key steps were undertaken in performing the Non-AFV Replacement Plan
section of this study:
• Submitted written information request- we submitted a documentary material
request to the Village that outlined the information needed to conduct our
analysis.
• Attended project kick-off meeting and met with Village representatives- On
February 2-3, members of the project team met at the Department of Public
Works headquarters to review key study parameters, including the project goals
and objectives, scope, timeline, critical success factors, and deliverables.
• Analyzed data and quantified current fuel usage patterns- Fuel usage reports
were provided by the Village and analyzed by Mercury in order to understand the
quantities of fuel being consumed, the classes of vehicles in which they are being
consumed, and the timing of fuel consumption (e.g., alternative fuels such as
biodiesel are less stable than petroleum diesel, and therefore should not be used
in vehicles and equipment that receive only seasonal use).
• Developed replacement plan for current fleet- Fleet inventory records and
replacement parameters were used to develop a replacement plan that projects
future replacement dates and costs out to 40 years. This process involves the
quantification of the current fleet replacement eligibility (i.e., the Baseline Fleet
Replacement Plan) and the development of a plan to replace vehicles over the
course of several budget cycles (i.e., the Smoothed Fleet Replacement Plan).
The project approach and methodology used in the Feasibility and Costs of Alternative
Fuels section will be discussed later in the report.
NON-AFV FLEET REPLACEMENT PLAN
Determining the costs and benefits of adopting AFVs entailed developing a long-term
fleet replacement plan that projects the future replacement dates and costs by asset
over a 20 -year period. Developing these plans requires two basic types of inputs: a fleet
inventory containing certain information on each individual asset in the fleet, and a set
of parameters or assumptions for each type or class of asset in the fleet. These
parameters typically include a replacement cycle (in months), the asset purchase price
in today's dollars, and an annual purchase price inflation rate.
The data used in developing the replacement plans discussed below were furnished to
us in January 2014 and were assumed to be reasonably accurate (in terms of fleet size,
composition, and asset age) as of that time period. While the replacement parameters
that were provided were not linked directly to asset classes, Mercury was able to add a
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suffix character to each of the existing asset classes in order to maintain both the
current classification system and the Village's desired replacement standards (e.g.,
class "09" contained vehicles of various replacement cycles, so class "09" vehicles with
a 60 -month replacement cycle became class "09A", vehicles with 84 -month became
"0913" and so on). This will be explained in further detail below.
Mercury uses a proprietary computer program called CARCAPTM (Capital Asset
Replacement Cost Analysis ProgramTM) to develop fleet replacement plans and analyze
various fleet asset costs and other outcomes associated with their implementation. This
program allows Mercury to project the remaining life, and future replacement dates,
replacement costs, residual values, ages, book and fair market values, book and
effective depreciation costs of each individual asset in a fleet, which can then be rolled
up into department, fund, and jurisdiction -wide totals for fleet cost analysis purposes.
CARCAPTM generates a replacement plan by 1) comparing the current age and
odometer or hour meter reading of each individual asset in the fleet against
recommended replacement criteria in age, miles, or engine hours for that type of asset
that are stored in the program's Planning Parameter Table; 2) projecting when each
asset will reach each applicable criterion or threshold for replacement; and 3) estimating
the purchase price of the asset in the year in which it will reach whichever threshold
(age or accumulated usage) first. We used this program to develop two different
replacement plans for the Village's fleet, and will also use it in phase two of the analysis
to demonstrate the effects of AFV adoption.
NON-AFV BASELINE REPLACEMENT PLAN
We refer to the first plan that we developed for the Village's fleet as a Baseline Fleet
Replacement Plan. It is for a fleet of 165' vehicles and pieces of equipment and projects
future fleet replacement costs, beginning in 2016, based on the application of the
Village's replacement cycles (see Figure 32 in the appendix). Employing these
guidelines, which range for individual asset classes from 5 to 20 years2, would result in
a weighted average replacement cycle for all assets in the fleet of 11.7 years.
Our analysis indicates that the estimated replacement cost of the Village's fleet, in
today's dollars, is $14.9 million. The future costs of replacing the assets in the Village's
fleet in strict adherence to its replacement cycles are shown in below (see Figure 1).
1 This is the number of assets that remained after first removing 17 assets for which insufficient
information regarding asset cost or acquisition dates was available and another 48 assets that are either
not included in the replacement program or are unlikely to be replaced in the near future.
2 Some of the replacement parameters were provided as a range of years (e.g., 12-17 years, or 17-22
years). Where this occurred, we had to select a single value to use for planning purposes, and selected
the average of the range of years, rounded to the nearest integer (e.g., 17-22 years became 20 years).
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54
$3
S1
50
Figure 1: Non-AFV Baseline Fleet Replacement Costs
GROSS REPLACEMENT COSTS
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Fiscal Year
The current average age of the assets in the Village's fleet is 8.5 years. Selected fleet
replacement statistics derived from the Village's Baseline Fleet Replacement Plan are
shown in Figure 2.
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Figure 2: Village's Fleet Replacement Statistics (in 2015$)
Total number of units currently in the fleet
165
Number of asset types
139
Current mean asset age (years)
8.5
Imputed average replacement cycle (years)
17.0
Weighted average recommended replacement cycle (years)
11.7
Average asset purchase price
$90,307
Gross fleet replacement cost
$14.9 M
Average annual fleet replacement cost in (2015$)
$1.3 M
Average annual replacement expenditures (FY 2010-14)
$0.7 M
Cost of replacing assets that meet or exceed their recommended
replacement cycles in months, LTD usage, or both (in 2016)
$3.3 M
Value of vehicles that are eligible for replacement (in FY 2015)
$2 M
Number of assets that meet recommended replacement age (in FY
2015)
30
Percentage of assets that meet replacement age criteria (in FY
2015)
18%
The statistics shown in Figure 2 reveal that the Village has 30 vehicles that meet one or
more of the replacement criteria, however there are already plans in place to replace
many of these vehicles during the 2016 budget year. Of the other vehicles that meet the
age criteria, but are not being replaced, they are primarily deferred due to low usage.
While the Baseline Fleet Replacement Plan is a very valuable benchmarking tool, we
are able to adjust vehicle replacement years on a vehicle by vehicle basis more
effectively in the Smoothed Replacement Plan for the Village's fleet.
NON-AFV SMOOTHED REPLACEMENT PLAN
The next step in this study was to develop a realistic replacement plan that we describe
as a Smoothed Replacement Plan. This plan is based on all of the same assumptions
and parameters as the Baseline Fleet Replacement Plan with one exception: we
adjusted the initial replacement dates of many of the assets that will meet the criteria for
replacement in 2016, so as to avoid requesting funds for vehicles that, for reasons of
low utilization, should be deferred. The Village has already identified its replacement
priorities for the next three budget cycles, which are reflected in the first three years of
the replacement plan. The replacement costs in the subsequent budget cycles were
smoothed out to avoid major peaks and valleys in replacement spending. The costs of
the smoothed plan are shown in Figure 3. The year -over -year consistency of fleet
replacement costs from 2019 through 2022 under this plan is obvious, with the
replacement costs ranging from $1.4 million to $1.5 million per year until 2023, where
the replacement of a ladder truck for the Fire Department causes some unevenness in
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spending. The modest annual increase in replacement costs for the period from 2019 to
2022 is designed to parallel the rate of inflation (3%).
$4
$3
N
C
o S2
$1
$0
Figure 3: Non-AFV Smoothed Fleet Replacement Costs
GROSS REPLACEMENT COSTS
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Fiscal Year
For comparison purposes, Figure 4 shows the number of assets that would be replaced
under the Baseline Fleet Replacement Plan (Figure 1) and the Smoothed Fleet
Replacement Plan (Figure 3) and their comparative gross replacement costs in each
year over the next 10 years.
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Figure 4: Comparison of Baseline and Smoothed Fleet Replacement Plans
(without AFVs)
Year
ReplacedFiscal
Assets
Cost (Millions)
Baseline
Smoothed
Baseline
Smoothed
2016
49
29
$3.3
$2.3
2017
17
25
$1.3
$1.7
2018
16
16
$2.1
$1.9
2019
9
22
$0.4
$1.4
2020
17
10
$2.0
$1.4
2021
11
18
$0.6
$1.5
2022
19
24
$1.1
$1.5
2023
16
12
$1.1
$1.2
2024
23
17
$3.1
$2.3
2025
19
20
$1.3
$1.6
Total
196
193
$16.4
$16.8
As can be seen from Figure 4, the two replacement plans presented thus far show
scenarios that hinge on very similar levels of fleet replacement spending to address the
inherent unevenness in replacement spending. The first scenario shows the costs front-
loaded into the first year, with the second showing the costs spread over the next ten
budget cycles.
FEASIBILITY AND COSTS OF ALTERNATIVE FUEL VEHICLES
In this section of the report, we will evaluate the operational, technical, and financial
feasibility of the various alternative fuels. With so many different types of alternative fuel
options available, it is important to conduct our analyses in the context of the Village's
current fleet. Recommendations that ignore the current ages and replacement
schedules of vehicles inherently ignore the economics of vehicle replacement, in that
vehicles that are soon to be replaced are poor candidates for conversion to alternative
fuel, while vehicles that have recently been replaced may prove to be suitable
candidates for conversion. In both cases, the overarching concept that guides our
analysis is that operational savings (that accrue incrementally) need to occur over large
enough periods of usage to justify the increased capital expenditure of purchase or
modification. Vehicles that are soon to be replaced lack a sufficient time frame for
recouping costs (and vice versa), and we should therefore focus on the types of
vehicles that would be purchased in their place.
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ALTERNATIVE FUEL USE IN EXISTING FLEET
While the primary focus of this study is to identify opportunities for alternative fuel
implementation through changes in vehicle replacement practices, our exploratory
analysis indicates that many of the vehicles in existing fleet are (under ideal conditions)
capable of using biodiesel or ethanol (E85). The following sections offer our analysis of
the pros and cons for biodiesel, as it can be implemented without any change in capital
spending, and is therefore a much simpler cost calculation. E85 will be evaluated later
in the report, as there are capital costs associated with its implementation.
Biodiesel
Biodiesel is a diesel fuel derived from organic sources such as soybeans and other
vegetable oils and animal fats such as recycled cooking oils. Large-scale production of
biodiesel stock has grown considerably in the past fifteen years from about 25 million
gallons in 2000 to over 1 billion gallons in 2014. Also during that time, the regulations for
production have strengthened considerably to ensure that the fuel is viable for all users.
As such, virtually all diesel engine manufacturers accept its use when blended with
ordinary diesel fuel up to a mix of 20% biofuel and 80% diesel.
Advantages
The primary advantages of using biodiesel lie in the sustainability of the fuel and in the
environmental impacts:
• Biodiesel is a renewable resource since the top tier stocks come from soy
plants.
• Biodiesel displaces (depending on the blend) the use of fossil fuels.
Operators using B20 for example are using 20% less fossil fuels.
• Biodiesel has lower emissions than typical diesel fuel. The EPA has
determined that B20 can reduce CO and particulate emissions by about 10%.
The same blend can reduce hydrocarbons by approximately 20%.
• There is no cost for conversion on the vehicles and equipment nor to the
storage tanks.
• There is little discernable difference in the performance of the vehicles with
respect to power output or fuel consumption increase.
• Various blends of bio and diesel fuels are readily available in Chicago area.
Disadvantages
The notable downsides to the use of biodiesel are as follows:
• The cost of the fuel is higher than regular diesel. The Department of Energy
Alternative Fuels Data Center indicates that the price of B20 was $3.03 per
gallon in January of 2015 whereas the price of #2 Diesel fuel was $2.93 per
gallon.
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• The shelf life of biodiesel is less than regular diesel. Suppliers suggest that
even in controlled storage, the fuel degrades noticeably in 90 days and is
highly susceptible to biological contamination and fungus. This is particularly
prevalent if the fuel is stored in vehicle tanks over long periods due to the
"breathing" effect of the tanks.
• Cold weather performance of the fuel can be poor if the fuel is not managed
carefully. Some reports indicate that the fuel can begin to jell at temperatures
as much as 20 degrees higher than a blend of #1 and #2 diesel, which is
commonly used by municipalities that operate their own storage tanks.
Additives may be necessary when using B20, which drives the cost up
further.
Other Considerations
Biodiesel does not require any modifications to storage tanks, plumbing, or dispensers.
If a conversion is implemented, the tanks should be inspected and tested to ensure
minimal water in storage tanks and no biological growth is present. If not already in
place, regular tank testing should become routine. There will be no impact to drivers
during a biodiesel implementation.
Biodiesel does not require any modifications to vehicles, nor do servicing mechanics
need any specialized training. If a conversion is implemented, biodiesel suppliers
suggest it is prudent to change the fuel filters on vehicles, but it is not required. Further,
the shop facilities will not require any specialized modifications.
The current standards for biodiesel should be adhered to without fail. And contract
arrangement for biodiesel should include a requirement that the supplier show proof of
meeting American Society for Testing and Materials (ASTM) standard D6751. Fuel
deliveries should be tested by independent provider to ensure quality.
Rebates, Incentives
The Illinois General Assembly approved an extension of the biodiesel tax credit through
2018 however; there is no benefit for municipalities who currently do not pay the tax.
Most incentives for biodiesel are aimed at increasing national production. However, the
Department of Energy website (www.afdc.energy.gov/fuels/laws/BIOD/US contains a
section on "Improved Energy Technology Loans" that indicates that some financial help
may be available in the form of loans. From the site:
• The U.S. Department of Energy (DOE )3 provides loan guarantees through the
Loan Guarantee Program to eligible projects that reduce air pollution and
greenhouse gases, and support early commercial use of advanced technologies,
3 Department of Energy website (www.afdc.energy.gov/fuels/laws/BIOD/US.
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including biofuels and alternative fuel vehicles. The program is not intended for
research and development projects. DOE may issue loan guarantees for up to
100% of the amount of the loan for an eligible project. For loan guarantees of
over 80%, the loan must be issued and funded by the Treasury Department's
Federal Financing Bank. For more information, see the Loan Guarantee Program
website (Reference 42 U.S. Code 16513).
This financial assistance may include the development of or upgrades to fuel sites.
Summary of Costs
As noted earlier, the main advantages to the use of biodiesel lie in the environmental
and renewability arenas and the ease in which it can be used in current and future
diesel powered vehicles and equipment. Solely in terms of a financial return on the
investment of higher "per gallon" costs and potentially the inclusion of fuel additives in
cold weather, there is none.
Hybrid Sport Utility Vehicles in Existing Fleet
Hybrid vehicles differ from conventional powertrain vehicles in that they use batteries or
some other type of energy storage system to store power that would otherwise be lost.
The most popular of this variety of vehicles are hybrid electric vehicles, which couple
electric motor/generators with the drivetrain to charge the vehicle batteries while driving,
while also recovering energy from the deceleration of the vehicle (i.e., regenerative
braking).
Advantages
The main advantages of hybrid vehicles include:
• The combination of less powerful engines supplemented by electric motors allow
hybrids to maintain similar performance to conventionally powered vehicles,
while demonstrating significantly better fuel economy.
• Hybrids have been widely accepted in the consumer market, and have therefore
been proven over billions of miles.
• Initial fears of end -of -life battery failures have been largely put to rest.
• Hybrids powertrains are available in many already popular models.
• Hybrids can use the same fueling infrastructure as conventionally fueled
vehicles, making hybrid fleet implementations much simpler than the other
alternative fuel scenarios evaluated in this study.
• Hybrids demonstrate significantly better fuel economy in urban and high idling
applications due to their engine start/stop feature.
• Hybrid vehicles demonstrate significantly longer brake life than conventionally
fueled vehicles. The regenerative braking feature of the hybrid drive system
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reduces the frequency and severity of brake use, which results in longer intervals
between brake maintenance.
Disadvantages
The main disadvantages to hybrids are as follows:
• Hybrid vehicles are typically more expensive to purchase than their
conventionally fueled counterparts. The marginal increase in capital costs need
to be recouped by using the vehicles in applications where they will see a
sufficient amount of usage.
• The battery (or energy storage system) is an expensive component, and does
wear out over a sufficiently long period of time. The cost of battery replacement
can range from $2,500 to $5,000, depending on the vehicle model. At the point in
time that the battery would be likely to need replacement, it would most likely not
be economically feasible to do so, therefore replacement schedules for vehicles
must be adhered to in order to avoid this downside risk.
• Hybrid vehicles contain high voltage components that most mechanics have not
necessarily been trained to diagnose. There are safety procedures for dealing
with these high voltage components that must be adhered to in order to avoid
injury to personnel and/or damage to vehicle components. It is therefore
recommended that repairs featuring these components be performed at a
dealership by factory -trained mechanics who work on these systems frequently
enough to have the training and experience to perform the repairs safely.
Other Considerations
The Village currently has three hybrid vehicles in its fleet. To evaluate whether the
purchase of these three hybrids has been cost-effective for the Village, we evaluated
the increased initial capital costs of purchasing hybrids and compared them to the
ongoing cost savings from consuming less fuel. The three vehicles in question are 2009
Ford Escapes, and are averaging approximately 11,405 miles per year. The MSRP for a
2009 Ford Escape Limited with a conventional powertrain was $26,670, while a
comparably equipped hybrid cost $33,725, a difference of $7,055. If the increase in
annual depreciation that corresponds with the $7,055 increase in purchase price is less
than the annual fuel savings from switching to hybrid, then the investment in upgrading
to hybrid vehicles will have provided an overall savings. In the next paragraph, we will
discuss the fuel savings.
The conventional powertrain Escape was rated with a combined fuel economy of 21
miles per gallon (MPG), while a comparably equipped hybrid was rated with a combined
fuel economy of 28 MPG, yielding a 33% improvement. Based upon this difference in
fuel economy, the hybrid version will save approximately $452 in fuel per year, which
would take 15.6 years to recoup. At 15.6 years (or roughly 178,000 miles) the economic
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payback on those three vehicles would be beyond the economic point of replacement.
Given this extremely long payback period, it is not surprising that Ford stopped
producing the hybrid version of the Escape and has instead opted to provide an
EcoBoost engine that achieves better fuel economy than the hybrid with a turbocharged
four -cylinder engine with a lower capital cost margin.
For other vehicle models that have larger differences between conventional powertrain
and hybrid powertrain fuel economy ratings, the payback period is much sooner.
Combine this with applications where the vehicle utilization is much higher, and there
are some scenarios where hybrids are more appropriate than their conventionally fueled
counterparts.
ALTERNATIVE FUEL USE THROUGH VEHICLE REPLACEMENT
The financial viability of each type of alternative fuel implementation was evaluated
based upon the outcome of several discounted cash-flow analyses.
Methodology for Evaluating Financial Feasibility of Alternative Fuel Projects
Two types of discounted cash-flow analyses were performed for each of the fuel types
under consideration: first, the net present value (NPV) of each alternative fuel scenario
was compared to the NPV of the Non-AFV Smoothed Replacement Plan, and second,
the payback period was calculated relative to the Non-AFV Smoothed Replacement
Plan. Where the NPV of the project has a negative value, it indicates that the project will
lose money. When the NPV is zero (the point in time that corresponds with the payback
period), the project neither gains nor loses money. And when a project has a positive
NPV, the project is a good investment and should be pursued (unless there are other
mutually exclusive projects with higher NPVs). If the future cash flows of the alternative
fuel implementation (i.e., the future operational and vehicle capital costs) are more
expensive than those of the Non-AFV Smoothed Replacement Plan, the project does
not achieve a payback. Some of the projects (e.g., CNG acquired at the public site, E85,
and LPG) fell into this category, as their operating costs were higher in the future than
those of gasoline or diesel.
For the projects that achieved a return on investment, the measure of whether the
project should be pursued is the length of the payback period. According to the National
Renewable Energy Laborator .
"Stable, progressive fleets can have a target payback of 7 years while
more risk -adverse fleets can require a 3 -year payback. The payback
4 US Department of Energy. Office of Energy Efficiency and Renewable Energy. National Renewable
Energy Laboratory. Business Case for Compressed Natural Gas in Municipal Fleets, 17, by Caley
Johnson. June 2010.
14
Alternative Fuel Study
Final Report
period seems to be the metric of choice for fleet managers despite its
drawback of not being able to quantify losses on a bad investment."
The scenarios involving the construction of a CNG compressor site at the Village DPW
facility failed to achieve an acceptable payback period. For the scenario that included
PHEVs in the fleet, the capital costs of installing charging stations and buying more
expensive vehicles were recouped in 2031. The replacement plan that included HEVs
achieved a return on investment much earlier (in 2022), as there were no infrastructure
costs to depreciate.
Identification of Vehicle Classes to Study
At the outset of the project, we requested a substantial amount of data about the
Village's fleet. This request included a fleet inventory, fuel records, and costs for
maintenance.
The initial data provided by the Village included various class codes for vehicles
presently in service. We prioritized the classes by their respective annual fuel
consumption totals, working under the premise that the Village can realize a lower
marginal cost on investments in alternative fuel infrastructure when those investments
are borne over larger amounts of usage. The results in the figure below show the
classes of vehicles that had more than $5,000 in total fuel costs for 2014, ranked by
expenditure. The fuel expenditures in these top 17 classes represents over 90% of the
total annual fuel expenditures of $457,031.
Figure 5: Top 17 Classes Ranked by Fuel Expenditure
4wh Mid Size Sport U
17
24,745
$81,956.57
4 DR SEDAN, FULL
30
23,933
$79,863.66
TRUCK35.-GSAXE
17
20,028
$70,818.48
P/U 2WH FULL
12
7,774
$25,883.47
P/U 4WH FULL
11
7,499
$25,310.09
AMBULANCE
4
5,565
$19,612.43
4wh Full Size Sp Uti
5
5,446
$18,232.41
FIRE PUMPER
3
4,090
$14,493.96
4 DR SEDAN, COMP
14
4,351
$14,482.07
Ladder Truck
1
4,009
$14,095.31
Tandem- 53,000 GVWR
3
3,282
$11,739.50
SWEEPERS
2
2,194
$7,816.60
END LOADER TRAC
3
2,149
$7,672.24
FIRE PUMPER/SQUAD
1
1,795
$6,270.48
HIGH LIFT
5
1,732
$6,135.70
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Alternative Fuel Study
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TRUCK15/25GSAXE 3 1,695 $6,037.87
TRUCK10/15GSAXE 5 1,613 $5,735.47
Grand Total 136 121,900 $416,156.31
In order to identify which alternative fuels are the most likely candidates for successful
implementation, we first had to prioritize our analysis by looking at the largest
consumers of fuel. To gain insight into the types of vehicles that have the highest
likelihood of yielding a return on investment, we also had to consider the complexity
(and inferred cost) of implementation. By reviewing the list above, we started our review
of the various fuel types with E85, as the Ford Interceptor Sedan and Utility can meet
the requirements of the top two classes of vehicles and are available as flex fuel
vehicles.
Ethanol (E85)
Ethanol is a fuel derived from organic feed stocks such as corn, grains, and high sugar
plants such as sugar cane and sugar beets. The process of making the fuel includes a
type of fermentation, distillation, dehydration and ultimately blending with regular
gasoline. For many years, the U.S. has allowed fuel retailers to sell ethanol/gasoline
blends. The blend can vary from 1% ethanol up to a maximum of 10% and most of the
vehicles on the road today can use this blend without issue.
E85 is a fuel in which 85% of the content is ethanol and the remaining 15% is gasoline.
Older vehicles (15 years +) cannot tolerate E85 without significant problems. However,
most manufacturers (domestic and foreign) offer a variety of vehicles denoted as Flex
Fuel Vehicles (FFVs) that are designed to operate on regular gasoline or E85.
In most states, E85 is easily obtained in bulk, however wide availability in retail fuel
stations is somewhat spotty. In areas of the country where corn is produced, E85 is
commonplace but less likely to be found on the coastal states. Also, the storage tanks,
plumbing, and dispensers used for E85 are somewhat different than normal equipment.
Advantages
• Ethanol is a highly sustainable fuel in that the feed stocks are grown in
abundance and fully renewable with each crop.
• E85 fueled vehicles are somewhat cleaner burning than standard gasoline
models. The primary reductions are in Total Hydrocarbons (THC) and in
carbon dioxide (CO2).
• Vehicles designed to operate on E85 (FFVs) are readily available from a wide
variety of manufacturers and cover a wide range of applications. The price
differential is nominal in most cases. The additional component cost to build a
Flex Fuel Vehicle is estimated at $200.
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Alternative Fuel Study
Final Report
• Based upon a review of the vehicles in the Village's fleet, a large number of
them are already E85 capable.
Disadvantages
• The price of E85 is known for being highly volatile. In the past decade, E85
has been as much as $.30 per gallon cheaper than gasoline but also it has
been as much as $.80 per gallon more expensive. A review of the last four
Clean Cities Alternative Fuel Price Reports shows E-85 prices as high as
$3.43 per gallon in the first quarter of 2014, to as low as $1.96 per gallon in
the last quarter of 2014. The price of gasoline was also volatile during this
time period, ranging from $3.56 per gallon to $1.84 per gallon for the
respective periods.
• E85 has less energy content (41 percent less) and results in a noticeable loss
of fuel mileage.
• Retail fuel supplies can be spotty in some areas.
• Bulk storage and dispensing requires some specialized equipment and/or
modifications to avoid deterioration of items such as rubber seals5.
Other Considerations
If the Village implements a program to convert vehicles to E85, some instruction may be
necessary for drivers. Specifically, policies and procedures should be in place to inform
drivers of the need to use E85 and direct them to the proper fuel sites. The actual
process of fueling requires no change nor is the operation of the vehicle altered in any
way.
The apparent lowest cost approach to making E85 available to fleet vehicles involves
the installation of a separate ethanol storage tank and installing a "blender pump"
dispenser that will draw fuels from two sources when E85 is being used. This type of
operation is often used by retailers due to the lower cost. In this configuration, non-FFVs
could still fuel at the same site as the newer FFVs.
Rebates, Incentives
One type of financial assistance for converting the current fuel site into an E85
compliant site is a loan program also noted in the section on biodiesel. We will restate
the program here:
• The U.S. Department of Energy (DOE )6 provides loan guarantees through the
Loan Guarantee Program to eligible projects that reduce air pollution and
5 Tanks and equipment should be inspected by certified professions to determine viability of existing
facilities to convert to E85.
17
Alternative Fuel Study
Final Report
greenhouse gases, and support early commercial use of advanced technologies,
including biofuels and alternative fuel vehicles. The program is not intended for
research and development projects. DOE may issue loan guarantees for up to
100% of the amount of the loan for an eligible project. For loan guarantees of
over 80%, the loan must be issued and funded by the Treasury Department's
Federal Financing Bank. For more information, see the Loan Guarantee
Program website. (Reference 42 U.S. Code 16513)
• The U.S. Department of Agriculture (USDA)' offers a variety of programs that
support biofuel development. The Rural Energy for America Program (REAP),
authorized under section 9007 of the 2008 Farm Bill, may soon announce that
E85 and ethanol blender pump projects are eligible for financial support. It is
expected that the existing REAP grant guidelines will apply. Under these
guidelines, a cash grant of 25% may be available for eligible projects, up to a
$500,000 project cap. The project cost balance of 75% may be eligible for a
REAP Loan Guarantee. Applications for this program are submitted through the
state office of the USDA.
Summary of Costs
In evaluating E85 options, we analyzed the net present value (NPV) of two different
scenarios at intervals of five, ten, and fifteen years. These values include the increases
in vehicle acquisition costs from the Non-AFV Smoothed Replacement Plan, the
changes in infrastructure capital costs, and the changes in operating costs. The two
scenarios evaluated the NPVs when using the Village's own fuel price data, as well as
the NPVs when using data from the Clean Cities' Alternative Fuel Price Report. In
Figure 7 below, the results of the analysis indicate that there is no return on investment
in either of the two scenarios evaluated.
Figure 6: Net Present Value of E85 Investment Scenarios
Development of an E85 Replacement Plan
Upon reviewing the top 17 classes of vehicles ranked by fuel expenditure, we found that
11 of the classes could be replaced with E85 vehicles of the same type without
sacrificing performance. The figure below shows the changes in replacement costs that
6 -Department of Energy website (www.afdc.energy.gov/fuels/laws/BIOD/US.
7 www.rurdev.usda.gov
18
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Alternative Fuel Study
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would be associated with those classes, including the approximate price changes.
Although we typically think of alternative fuel vehicles being more expensive than
conventionally -fueled vehicles, the increase in technological complexity and the
associated costs of reducing diesel emissions has made gasoline and ethanol vehicles
less expensive by comparison. AS such, the ambulances that are currently powered by
diesel engines could be purchased with E85 capable gasoline engines. A V-10
gasoline/flex fuel engine provides comparable levels of power when compared to V-8
diesel engines. As many of the vehicles that the Village currently has in its fleet are E-
85 capable, we used the same capital costs for those classes in the E-85 replacement
plan.
Figure 7: E85 Replacement Parameters
Asset Class
�-
4 DR SEDAN, FULL -5
Replacement-.
60
or Hours
70,000
Related
Increase
$0
Price
...
dollars)Months
$37,000
4 DR SEDAN, FULL -8
96
70,000
$0
$37,000
4 DR SEDAN, FULL -10
120
85,000
$0
$37,000
4 DR SEDAN, FULL -12
144
85,000
$0
$37,000
4 DR SEDAN, COMP -8
96
85,000
$7,000
$38,000
4 DR SEDAN, COMP -12
144
85,000
$7,000
$38,000
P/U 2WH FULL -12
144
50,000
$0
$38,000
P/U 4WH FULL -12
144
50,000
$0
$38,000
4wh Mid Size Sport U-5
60
100,000
$0
$35,500
4wh Mid Size Sport U-7
84
100,000
$0
$34,000
4wh Mid Size Sport U-8
96
100,000
$0
$34,000
4wh Mid Size Sport U-10
120
100,000
$0
$31,400
TRUCK10/15GSAXE-14
168
50,000
-$8,320
$43,480
TRUCK15/25GSAXE-14
168
50,000
-$8,320
$46,680
Full Size Sport Util-12
144
50,000
$0
$38,000
4wh Full Size Sp Uti-8
96
100,000
$0
$47,000
4wh Full Size Sp Uti-12
144
70,000
$0
$47,000
AMBULANCE -8
96
-$8,000
$208,407
AMBULANCE -10
120
-$8,000
$208,407
In drawing a comparison of capital costs under both scenarios, the timing of vehicle
replacement is kept consistent between the Non-AFV Replacement Plan and the E85
Replacement Plan. In order to replace vehicles at the same rate, the Village will have to
reduce spending to offset the decreased per -vehicle costs as shown in the figure below.
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Figure 8: Comparison of Non-AFV and E85 Replacement Plans
Fiscal Year
2016
Assets Replaced
Non-AFV
Smoothed Smoothed
29
E85
29
Cost
Non-AFV
Smoothed
$2.3
(Millions)
E85
Smoothed
$2.3
Cost
(Savings)
($0.0)
2017
25
25
$1.7
$1.7
($0.1)
2018
16
16
$1.9
$1.9
($0.0)
2019
22
21
$1.4
$1.5
$0.2
2020
10
10
$1.4
$1.4
($0.0)
2021
18
16
$1.5
$1.4
($0.1)
2022
24
26
$1.5
$1.6
$0.0
2023
12
13
$1.2
$1.2
$0.0
2024
17
17
$2.3
$2.3
$0.0
2025
20
16
$1.6
$1.4
($0.3)
Total
193
189
$16.8
$16.5
($0.2)
Using the fuel records for 2014, we projected the future fuel consumption of the fleet.
For the vehicles that are already E-85 capable, we assumed that their consumption of
E85 would commence at the beginning of the replacement plan (2016). For vehicles
that are not currently E85 capable, we used the future timing of their replacement as the
point in which their fuel consumption would switch over to E85. As more and more
vehicles are replaced with AFVs, the gasoline and diesel consumption decreases while
the E85 consumption increases by a commensurate amount. In performing these
calculations, we used conversion factors from the Department of Energy to normalize
the fuel usage by converting the units of measure that fuel are dispensed in (natural
units) to a common standard based on energy content (gas gallon equivalents). The
amount of fuel dispensed (and the associated incremental savings) is the critical factor
in evaluating the effectiveness of the increased capital spending, which will be
discussed further below.
Feasibility and Costs of Placing an E85 Fueling Station at the DPW Facility
Providing an E85 dispenser at the public works facility can be accomplished by using a
blender pump, which would link to both the E-85 tank and the regular unleaded fuel
tank. For our analysis, we used $115,000 for the cost of the above -ground storage
tank, the plumbing, the electrical hookup, and the crash protection around the tank. As
we did not see any vendors that provide the tank in exchange for a markup on the fuel
price, the Village would be responsible for these up -front costs, which were amortized
over 5 years as shown in the figure below.
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Figure 9: Analysis Parameters for E85 Scenarios
GENERALPARAMETERS
Electrical Hookup and Crash Protection for E85 Tank and Dispenser
$115,000
Salvage Value
0%
Amortization Schedule on Infrastructure (Years)
5
E85 Cost (Natural Unit: Gallons)
$2.75
E85 GGE Conversion Factor
1.41
E85 Cost GGE
$3.88
Federal Tax Credit per E85 Gallon
Gasoline Cost (GGEs)
$2.93
Mount Prospect Gasoline Cost (GGEs)
$2.90
Diesel Cost (Natural Unit: Gallons)
$3.37
Diesel GGE Conversion Factor
0.90
Diesel Cost (GGE)
$3.03
Mount Prospect Diesel Cost (Natural Units)
$3.27
Mount Prospect Diesel Cost (GGE)
$2.94
Inflation Rate
3%
Discount Rate
6.0%
As can be seen above, E85 has a lower price per gallon than gasoline or diesel,
however when this is adjusted for the reduced in energy content in E85, the benefits of
E85 are minimized (speaking in terms of cost only). The increased cost of purchasing
E85 is not offset by the decrease in capital costs that are realized by replacing diesel
vehicles with flex -fuel capable gasoline vehicles. Short of their being an increase in the
price of gasoline that is not mirrored by E85, or any indication of a long-term tax credit,
the use of E85 fails to achieve a return on investment.
Natural Gas
Natural gas is a colorless and odorless gas that can be used as a vehicle fuel in two
forms. First, Liquefied natural gas (LNG) vehicles use natural gas that has been
cryogenically cooled until it liquefies, which allows for the vehicle fuel tank size to
remain more consistent with those of conventionally fueled vehicles. LNG natural gas
selections are very limited, with the majority of fleets using LNG only for transit, refuse
collection, and over -the -road truck applications. With LNG, it is important that vehicles
fueled soon before they are driven. As the fuel tanks warm up to ambient temperature,
the gas increases in pressure. As a safety feature, the gas will vent fuel to the
atmosphere before the tank is in danger of bursting from too much pressure. Since the
Village does not utilize any trucks in these three vocations, and because the closest
match would be Class 8 dump trucks that receive intermittent use and are store indoors,
we are excluding the LNG vehicles from further analysis for safety reasons. Also worth
noting is the lack of availability of LNG in the Greater Chicago area: the closest public
LNG station is currently on the 1-70 corridor in Indiana.
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Alternative Fuel Study
Final Report
In compressed natural gas (CNG) vehicles, the gas is stored in high pressure tanks that
are considerably larger than tanks found on conventionally fueled vehicles, and the gas
often contains an odorant for aiding in leak detection.
Advantages
• Natural gas is produced domestically and has more stable pricing than gasoline
and diesel.
• Natural gas pipelines are extensive in the U.S., therefore availability is
widespread.
• Natural gas is less expensive than gasoline or diesel on a gas gallon equivalent
(GGE) basis.
• Natural gas burns more cleanly than other fuels.
• Natural gas has lower flammability than other conventional fuels, therefore is
more difficult to unintentionally ignite. Ignition temperature is over 1000 degrees
Fahrenheit, as opposed to gasoline and diesel, which are 540 and 420 degrees,
respectively.
• Compressed natural gas cannot spill like conventional fuels: the gas merely
dissipates in the air.
• There are a wide variety of vehicle models available, from compact sedan
through Class 8 trucks.
• Bi -fuel options are available for consumers who want the benefits of CNG with
the flexibility of gasoline.
• Natural gas vehicle performance is comparable to that of gasoline or diesel
vehicles.
• Depending on compressor station equipment, CNG refueling times can be
comparable to those of gasoline or diesel vehicles.
Disadvantages
• CNG compressor equipment requires substantial investment that must be
recouped over a large amount of usage.
• Retail CNG sites are available, but can cause users to travel out of their way to
get fuel.
• Repair facilities may require modification before CNG vehicles can safely be
worked on indoors. Not only does this present a cost in adopting CNG, but also
disrupts shop activities during the renovation process.
• Indoor vehicle storage building may require modification before CNG vehicles
can be parked indoors.
Other Considerations
• Vehicle operators may require education about the refueling procedures and be
wary of using CNG due to negative perceptions about safety and reliability.
22
Alternative Fuel Study
Final Report
• Maintenance personnel may require training to recognize the hazards associated
with performing repairs on CNG vehicles. High pressure storage tanks and
associated plumbing pose a risk to personnel when performing fuel system
repairs. Proper training can be used to manage these risks.
• If bi-fuel vehicles are purchased, policies need to be developed to promote the
use of alternative fuel to the extent possible.
Summary of Costs
In evaluating CNG options, we analyzed the net present value (NPV) of five different
scenarios at intervals of ten, twenty, and thirty years. These values include the
increases in vehicle acquisition costs from the Non-AFV Smoothed Replacement Plan,
the changes in infrastructure capital costs, and the changes in operating costs. In the
figure below, the results of the analysis indicate that there is a return on investment in
three of the five scenarios evaluated, however the return in investment in Scenario 1
occurs beyond the thirty-year interval shown here.
In the scenarios where a CNG compressor station was installed onsite (scenarios 1, 3,
and 5), the net present values are higher than the two scenarios in which Village
employees have to travel off-site for fuel. When we made assumptions about the cost of
labor (i.e., the opportunity cost of employee time) and travel to obtain fuel at an existing
public CNG site, the analysis indicated that it would be cost prohibitive to do so. This in
spite of the high up front capital costs of building a CNG station and/or modifying the
garage$.
Figure 10: Net Present Value of CNG Investment Scenarios
In the sections below, we will discuss the approach to developing these scenarios, as
well as the assumptions that were used in their calculation.
8 The capital costs in this analysis are amortized over 30 years.
23
Construct
CNG Site
ModifyScenario
Garage
Funding
Year
-
Year
1
Yes
Yes
No
($1,443,247)
($1,905,162)
($2,266,546)
CNG 2
No
Yes
No
($2,255,969)
($4,319,376)
($6,492,432)
CNG 3
Yes
No
No
($1,328,472)
($1,691,381)
($1,967,360)
CNG 4
No
No
No
$2,141,194
$4,105,594
$6,193,246
CNG 5
Yes
Yes
Yes
($1,319,621)
($1,674,896)
($1,944,290)
In the sections below, we will discuss the approach to developing these scenarios, as
well as the assumptions that were used in their calculation.
8 The capital costs in this analysis are amortized over 30 years.
23
Development of a CNG Replacement Plan
Alternative Fuel Study
Final Report
Upon reviewing the top 17 classes of vehicles ranked by fuel expenditure, we found that
11 of the classes could be replaced with CNG vehicles of the same type without
sacrificing performance. The figure below shows the changes in replacement costs that
would be associated with those classes, including the approximate price increases. For
the compact vehicles, we used the difference in MSRP between a conventionally fueled
compact vehicle (the Honda Civic) and its CNG fueled variant (the Civic Gx). For the full
size sedans and mid-size sport utilities, we used the difference in MSRP between the
Chevrolet Lumina and its bi-fuel CNG counterpart. Assuming that Chevrolet would use a
similar markup for its CNG Tahoe, we used the same value for the SUVs. For the
remaining light-duty vehicles, we used a markup of $10,000. For medium duty trucks we
used a markup of $15,000, and for heavy-duty (Class 7 or 8) vehicles, we used a
markup of $50,000.
Figure 11: CNG Replacement Parameters
Asset Class DescriptionReplacement
Months
Replacement
or Hours
CNG-
Price
Increase
Purchase
(today's
..
4 DR SEDAN, FULL -5
60
70,000
$12,000
$49,000
4 DR SEDAN, FULL -8
96
70,000
$12,000
$49,000
4 DR SEDAN, FULL -10
120
85,000
$12,000
$49,000
4 DR SEDAN, FULL -12
144
85,000
$12,000
$49,000
4 DR SEDAN, COMP -8
96
85,000
$7,000
$38,000
4 DR SEDAN, COMP -12
144
85,000
$7,000
$38,000
P/U 2WH FULL -12
144
50,000
$10,000
$48,000
P/U 4WH FULL -12
144
50,000
$10,000
$48,000
4wh Mid Size Sport U-5
60
100,000
$12,000
$47,500
4wh Mid Size Sport U-7
84
100,000
$12,000
$46,000
4wh Mid Size Sport U-8
96
100,000
$12,000
$46,000
4wh Mid Size Sport U-10
120
100,000
$12,000
$43,400
VAN, FULL -12
144
50,000
$10,000
$40,000
VAN, COMPACT -12
144
50,000
$7,000
$32,000
TRUCK10/15GSAXE-14
168
50,000
$10,000
$61,800
TRUCK15/25GSAXE-14
168
50,000
$15,000
$70,000
TRUCK35.-GSAXE-17
204
50,000
$50,000
$185,000
SWEEPERS -12
144
5,000
$50,000
$240,000
4wh Full Size Sp Uti-8
96
100,000
$10,000
$57,000
4wh Full Size Sp Uti-12
144
70,000
$10,000
$57,000
Tandem - 53,000 GVWR-17
204
50,000
$50,000
$195,000
In order to compare the replacement costs from the Non-AFV Replacement Plan and
the CNG Replacement Plan, we kept the timing of the replacement the same. In order
to replace vehicles at the same rate, the Village will have to increase spending to offset
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Alternative Fuel Study
Final Report
the increased per -vehicle costs. The results are shown in the figure below, including the
replacement costs under the Non-AFV Replacement Plan.
Figure 12: Comparison of Non-AFV and CNG Replacement Plans
Year
RFiscal Assets eplaced
Non-AFV
Smoothed Smoothed
CNG
Non-AFV
Smoothed
Cost (Millions)
CNG
Smoothed
Cost
(Savings)
2016
29
29
$2.3
$2.5
$0.2
2017
25
25
$1.7
$2.0
$0.2
2018
16
16
$1.9
$2.2
$0.3
2019
22
22
$1.4
$1.9
$0.5
2020
10
10
$1.4
$1.7
$0.3
2021
18
18
$1.5
$1.7
$0.2
2022
24
24
$1.5
$1.8
$0.3
2023
12
12
$1.2
$1.4
$0.2
2024
17
17
$2.3
$2.4
$0.2
2025
20
20
$1.6
$1.9
$0.2
Total
193
193
$16.8
$19.3
$2.6
Using the fuel records for 2014, we projected the future fuel consumption of the fleet.
We compared this with the replacement plan to determine the replacement year in
which each asset in the selected classes will be replaced with an AFV. As more and
more vehicles are replaced with AFVs, the gasoline and diesel consumption decreases
while the AFV consumption increases by a commensurate amount. In performing these
calculations, we used conversion factors from the Department of Energy to normalize
the fuel usage by converting the units of measure that fuel are dispensed in (natural
units) to a common standard based on energy content (gas gallon equivalents). The
amount of fuel dispensed (and the associated incremental savings) is the critical factor
in evaluating the effectiveness of the increased capital spending, which will be
discussed further below.
Feasibility and Costs of Constructing a CNG Compressor Station
Scenarios 1, 3, and 5 feature the construction of an onsite compressor station. The
analysis parameters used in Scenario 1 are presented below in the figure below. The
analysis parameters used in Scenarios 3 and 5 differ in that Scenario 3 assumes no
facility modification costs and Scenario 5 assumes that 30 percent of the CNG
implementation will be offset by grant funds under the Drive Clean Chicago program.
25
v 1. • i• I+•
Alternative Fuel Study
Final Report
Figure 13: Analysis Parameters for Scenario 1
GENERALPARAMETERS
Electricity ($/kWh)
$0.07572
Amortization Schedule on Infrastructure (Years)
25
Salvage Value
4%
Compressor Station Cost
$1,535,600
Pipeline and Transformer Cost
$155,000
Facility Modification Cost
$652,650
Uncompressed Gas Cost (Therm)
$0.35
Uncompressed Gas Cost (GGE)
$0.40
CNG Cost (GGE)
$2.09
Federal Tax Credit per GGE
Gasoline Cost (GGEs)
$2.93
Mount Prospect Gasoline Cost (GGEs)
$2.90
Diesel Cost (Natural Unit: Gallons)
$3.37
Diesel GGE Conversion Factor
0.90
Diesel Cost (GGE)
$3.03
Mount Prospect Diesel Cost (Natural Units)
$3.27
Mount Prospect Diesel Cost (GGEs)
$2.94
Inflation Rate
3%
Discount Rate
6.0%
The costs of building a CNG compressor station can vary widely based upon the utilities
(both gas and electric) already on-site, the amount of fuel consumption expected, and
the anticipated fueling window. Based upon the types of vehicles that would be filled
using this compressor station (e.g., plow trucks, patrol cars, etc.), we determined that a
time -fill site would not be sufficient. The Village would need a fast -fill site of sufficient
capacity to refuel plow trucks back-to-back during snow removal operations without
causing any delays. Furthermore, we did not want to include pricing for an oversized
compressor site in our analysis, as this would just cause undue cost to the Village
without any appreciable benefit. We located a recently awarded contract for the
construction and operation of a compressor station of the size and type that would be
used for a fleet like the Village's. We used the capital costs that were bid in the contract
for the compressor equipment, which can be seen in the figure on the following page.
26
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a
Alternative Fuel Study
Final Report
As can be seen in the preceding table, the provision of the electrical service was not
provided in this bid. A separate contractor performed the electrical hook-up for $55,000,
which we included in our analysis. We also included another $100,000 in costs
associated with providing natural gas to the compressor site. Obviously, these costs are
highly variable based upon the site layout and available utilities; however, a sensitivity
analysis of the costs for bringing utilities on-site revealed that increasing or decreasing
the value by 50% had no effect on the year in which a return on investment was
achieved.
Another consideration in CNG -site development would be the actual footprint of the site.
The pipeline, compression, drying, storage, and dispensing equipment at a CNG site
would take up a significant amount of space, much more so that the other options
proposed in this report. To further complicate matters, grant funding for the
development of the site would also be contingent on the site being accessible to public
users. As the fuel site at the Public Works yard is a restricted area, there would be a
conflict between the need to keep the site secure and the ability of public users to
access the fuel site, if it were to be collocated with the existing fuel island.
Feasibility and Costs of Purchasing CNG at a Retail Station
Scenario 2 and Scenario 4 involve the purchase of CNG from the public fuel site at the
Gas Technology Institute in Des Plaines. The following assumptions were used in the
analysis of Scenario 2, with the only difference between Scenarios 2 and 4 being the
removal of $558,900 in facility modification costs:
28
v 1. • i• I+•
Alternative Fuel Study
Final Report
Figure 15: Analysis Parameters for Scenario 2
GENERALPARAMETERS
Electricity ($/kWh)
0.08
Amortization Schedule on Infrastructure (Years)
25
Salvage Value
4%
Compressor Station Cost
$1,535,600
Pipeline and Transformer Cost
$155,000
Facility Modification Cost
$652,650
Uncompressed Gas Cost (Therm)
$0.35
Uncompressed Gas Cost (GGE)
$0.40
CNG Cost GGE
$2.09
Federal Tax Credit per GGE
Gasoline Cost (GGEs)
$2.93
Mount Prospect Gasoline Cost (GGEs)
$2.90
Diesel Cost (Natural Unit: Gallons)
$3.37
Diesel GGE Conversion Factor
0.90
Diesel Cost (GGE)
$3.03
Mount Prospect Diesel Cost (Natural Units)
$3.27
Mount Prospect Diesel Cost (GGEs)
$2.94
Difference in Time to Retail Fuel Site for Gasoline Vehicles Minutes
5
Difference in Mileage to Retail Fuel Site for Gasoline Vehicle Miles
2.3
Difference in Time to Retail Fuel Site for Diesel Vehicles (Minutes)
11
Difference in Mileage to Retail Fuel Site for Diesel Vehicle (Miles)
4.8
Average Gasoline per Refueling (Gallons)
10.0
Average Diesel per Refueling GGEs
25.0
Average Fleet Cost per Mile
0.70
Average Fully Burdened Labor Rate for Vehicle Operators
$45.00
Inflation Rate
3%
Discount Rate
6.0%
While we assumed that the capital costs of the compressor station and facility
modifications would be cost prohibitive, it turned out that the inclusion of costs
associated with the travel made an on-site fuel station the better option. Scenarios 2
and 4 to show significantly lower negative NPVs and fail to reach a return on
investment.
29
v 1. • i• I+•
Alternative Fuel Study
Final Report
Feasibility and Costs of Garage Modifications
It is important to recognize that natural gas, or methane, is lighter -than -air. Because of
this physical property, the Village may be required to make modifications to the Public
Works Maintenance Facility (in the repair bays and in the vehicle storage area), as well
as the garage that is located at the Public Safety Headquarters. Note that this section of
the report is based on general on-site observations. It is not a detailed engineering
evaluation and is intended to provide a frame of reference for estimating costs in the
context of the various fleet replacement plans. The appropriate codes should be
reviewed during the design, engineering, and permitting phases of any renovation or
construction project.
Several codes and standards have been promulgated in relation to the hazards that are
unique to storing natural gas vehicles indoors. While a release of natural gas from a
CNG vehicle outdoors will typically dissipate without incident, an undetected leak
indoors can lead to hazardous conditions. Natural gas can accumulate to flammable
concentrations in under -ventilated areas within a facility, and also come into contact
with hot surfaces or electrical devices. Based upon the types of the work being
performed in the facility, the codes and standards provide guidance on the separation of
workspaces, the detection of natural gas leaks, the relocation of potential ignition
sources, the adequacy and location of ventilation, and the usage of specialty fixtures.
The codes and standards that must be referenced during the design phase of a CNG
facility modification include the following:
• International Code Council's International Fire Code (IFC 2012)
• International Mechanical Code (IMC 2012)
• International Building Code (IBC 2012)
• National Fire Protection Association's NFPA 30A (2012) Code for
Motor Fuel Dispensing Facilities and Repair Garages
• NFPA 52 (2010) Vehicular Gaseous Fuel Systems Code
The local authority having jurisdiction (AHJ) will make the ultimate determination of
required modifications to the DPW facility if a replacement plan is adopted that requires
that vehicles be maintained there. This is typically coordinated between the fire
marshal's office and the permitting office of the local jurisdiction. However, based upon
our on-site observations, we have developed some projections of costs that the Village
can expect. The assumptions that guide these estimates are as follows:
• Code Compliance — The repair bays and vehicle storage are assumed to meet
the current standards and supply prescribed air change rate of one cubic foot per
square foot
30
Alternative Fuel Study
Final Report
• Types of Repairs -- The repair bays in the garage are used for jobs that are
considered "major" work, including the use of torches and welding equipment
during repair, fabrication, and vehicle preparation work; and paint and body work.
These types of repairs necessitate that ventilation equipment be upgraded to
achieve five air changes per hour.
• Ventilation Equipment —The Heating, Ventilation, and air Conditioning (HVAC)
units would require upgrades provide five air changes per hour, with ventilation at
ceiling level to ensure natural gas cannot pool and cannot become concentrated
in one area.
• Gas Detection — The Village would need to install gas detection equipment that
interfaces with HVAC controls to provide increased ventilation, that opens or
interlocks bay doors, and that interfaces with fire alarm panels.
Rebates and Incentives
There are various grant opportunities for a CNG implementation at the Village, which
are as follows:
• Drive Clean Chicago — The Drive Clean Station program is designed to award
funding for public fueling infrastructure. There is a total of $1.4 million available
for public CNG fueling, which will be awarded based on competitive cost
proposals. The program will fund up to 30% of the compressor station
development costs for awardees, which we showed the net present value in the
figure above titled "Net Present Value of CNG Investment Scenarios" under the
"CNG 5" scenario.
Propane, or Liquefied Petroleum Gas (LPG)
LPG is currently the most popular alternative fuel, with over 30 million vehicles on the
road world-wide. LPG is similar to natural gas in that it is in a gaseous state at room
temperature and pressure. LPG, however, maintains a liquid state when kept under
moderate pressure. The same types of compression and liquefaction equipment that
are used in CNG are not needed, which results in much lower implementation costs.
LPG, unlike natural gas, is heavier-than-air, which means that the code requirements for
LPG vehicle repair facilities are the same as the code requirements for gasoline and
diesel vehicle repair facilities, meaning that no renovations are required.
Advantages
• LPG is produced domestically and has more stable pricing than gasoline and
diesel.
• LPG availability is widespread.
• LPG is less expensive than gasoline or diesel on a gas gallon equivalent (GGE)
basis.
31
Alternative Fuel Study
Final Report
• LPG burns more cleanly than other fuels.
• LPG has lower flammability than other conventional fuels, therefore is more
difficult to unintentionally ignite. Ignition temperature is over 1000 degrees
Fahrenheit.
• LPG cannot spill like conventional fuels: it turns to vapor when depressurized.
• There are a wide variety of vehicle models available, from compact sedan
through Class 8 trucks.
• Bi -fuel options are available for consumers who want the benefits of LPG with the
flexibility of gasoline. The bi-fuel Ford Interceptor Utility will be approved by the
EPA imminently, and will have a 21 net usable gallon LPG tank in addition to its
standard fuel tank.
• LPG vehicle performance is comparable to that of gasoline or diesel vehicles.
• LPG refueling times are comparable to those of gasoline or diesel vehicles.
• LPG vehicles do not require expensive after -treatment devices like diesel
vehicles.
• LPG vehicles do not require diesel emission fluid.
• Some models of LPG vehicles are less expensive than their diesel -fuelled
variants. The MSRP for a Ford diesel truck is currently $8,480 more than a
comparable gasoline truck. The cost of a Ford truck with the gaseous prep
package is only $315 above base, with another $5,600 to $6,400 in up -fitting
costs for the actual LPG package.
Disadvantages
• While LPG use is widespread, its adoption in the retail market is not as
widespread as ethanol's.
• Some "retail" stations that sell LPG are actually propane distributors that will only
sell propane by appointment during short business hours, and lack the same type
of point-of-sale convenience that normal retail gas stations feature. The
Alternative Fuels Data Center has taken steps to separate the types of stations
for easy identification when using their online station locator tool.
• For gasoline vehicles, capital costs are higher for LPG.
• The purchase of the propane vehicles has to be accomplished through certain
select dealerships that can make the arrangements to have the vehicle sent to a
qualified vehicle modifier (QVM). New vehicles have to be purchased with the
OEM gaseous prep package, then sent to an up -fitter for LPG conversion. While
this causes some logistical hurdles, the LPG companies contacted were in the
process of gaining better integration with the OEM supply chain.
• Current LPG vehicle availability for Class 8 trucks is limited. The heaviest chassis
available is the Ford F-750 with a single rear axle.
32
Other Considerations
Alternative Fuel Study
Final Report
• Since LPG tanks are the responsibility of the fuel provider, then tank size can be
increased at no cost to the Village if usage increases.There has been a $0.50 per
gallon fuel credit in place for the last several years for LPG users. This credit is
designed to incentivize the use of LPG, but congressional reauthorization of the
tax credit has usually lagged behind the actual fuel use and the reauthorization
keeps occurring retroactively. As such, the tax credit is not currently in place, but
it is expected to be reauthorized for 2015.
Summary of Costs
In evaluating LPG options, we analyzed the net present value (NPV) of four different
scenarios at intervals of five, ten, and fifteen years. These values include the increases
in vehicle acquisition costs from the Non-AFV Smoothed Replacement Plan, the
changes in infrastructure capital costs, and the changes in operating costs. In the figure
below, the results of the analysis indicate that there is no return on investment in any of
the scenarios that we analyzed (represented by negative NPVs). Based upon some
uncertainty surrounding two if the variables in the analysis, we developed four
scenarios: two of the scenarios show the effects of an on-going congressional
reauthorization of the fuel tax credit, and two show the effects of substituting fuel pricing
data from the Clean Cities Alternative Fuel Price Report for the Village's own fuel pricing
data. The fuel prices used represented the average of the last four quarters' fuel prices
for the Midwest Region. The four season average was used as we suspected that there
may be a seasonal demand for LPG that would increase its price in the winter relative to
other fuels, which turned out to not be the case (it was actually more expensive in the
summer). Since there are no public LPG sites near the Village that would be suitable for
fleet fueling, we did not evaluate any travel costs associated with obtaining fuel off-site.
In each of these scenarios, we have included a $50,000 earmark for the installation of
crash protection and electrical for the vendor -provided LPG tank, which we amortized in
the first year.
Figure 16: Net Present Value of LPG Investment Scenarios
As was done for the CNG scenarios, we developed an LPG Replacement Plan that
featured selected classes of vehicles being replaced with LPG variants as they are
eligible for replacement.
33
0
Feasibility and Costs of Purchasing LPG Vehicles
Alternative Fuel Study
Final Report
Upon reviewing the top 17 classes of vehicles ranked by fuel expenditure, we found that
7 of the classes could be replaced with LPG vehicles of the same type without
sacrificing performance. The figure below shows the changes in replacement costs that
would be associated with those classes, including the approximate price increases. For
the pickups and SUVs, we used the upper range ($6,400) of the up -fitting costs that
were provided to us. The heavier vehicles would be expected to have larger fuel tanks,
which is reflected in the higher price used for trucks and sweepers.
Figure 17: LPG Replacement Parameters
Asset Class
�-
P/U 2WH FULL -12
Replacement
144
Replacement
or Hours
50,000
LPG-
Related
Increase
$10,000
Purchase
Price
...
dollars)Months
$48,000
P/U 4WH FULL -12
144
50,000
$6,400
$44,400
4wh Mid Size Sport U-5
60
100,000
$6,400
$41,900
4wh Mid Size Sport U-7
84
100,000
$6,400
$40,400
4wh Mid Size Sport U-8
96
100,000
$6,400
$40,400
4wh Mid Size Sport U-10
120
100,000
$6,400
$37,800
TRUCK10/15GSAXE-14
168
50,000
$13,098
$64,898
TRUCK15/25GSAXE-14
168
50,000
$13,098
$68,098
TRUCK35.-GSAXE-17
204
50,000
$13,000
$148,000
SWEEPERS -12
144
5,000
$13,000
$203,000
In drawing a comparison of capital costs under both scenarios, the timing of vehicle
replacement is kept consistent between the Non-AFV Replacement Plan and the LPG
Replacement Plan. In order to replace vehicles at the same rate, the Village will have to
increase spending to offset the increased per -vehicle costs as shown in the figure
below.
Figure 18: Comparison of Non-AFV and LPG Replacement Plans
Fiscal
Year
Assets Replaced
Non-AFV
Smoothed Smoothed
LPG
Cost
Non-AFV
Smoothed Smoothed
(Millions)
LPG
Cost
(Savings)
2016
29
29
$2.3
$2.4
$0.1
2017
25
25
$1.7
$1.8
$0.1
2018
16
16
$1.9
$2.0
$0.1
2019
22
22
$1.4
$1.7
$0.3
2020
10
10
$1.4
$1.5
$0.1
2021
18
18
$1.5
$1.6
$0.1
2022
24
24
$1.5
$1.7
$0.1
34
Alternative Fuel Study
Final Report
2023 12 12 $1.2
$1.2
$0.1
2024 17 17 $2.3
$2.3
$0.1
2025 20 20 $1.6
$1.8
$0.1
Total 193 193 $16.8
$18.0
$1.3
Using the same methodology described under the CNG section, we used fuel records to
forecast future consumption of gasoline, diesel, and LPG as vehicles are replaced.
Again, we used conversion factors from the Department of Energy to normalize the fuel
usage by converting the units of measure that fuel are dispensed in (natural units) to a
common standard based on energy content (gas gallon equivalents).
Author's note: in speaking with the sales representative at Alliance Autogas, he is
confident that the Ford Interceptor Utility will be through the EPA approval process
imminently. He also stated that they have a new plug-and—play engine control modules
(ECMs) for their LPG conversions which will bring the installation costs down
significantly. As such, the author feels that these factors will increase9 the NPV of the
investment in two ways; first, the Ford Interceptor Utility is the Village's highest user of
fuel, and a conversion to LPG for this class of vehicles would increase operational cost
savings; and second, the installation costs of LPG systems will decrease from $6,400.
Both of these factors will improve the NPV figures in future years, but as for right now,
the analysis was conducted with more conservative figures in case these two
"eventualities" fail to come to fruition.
Feasibility and Costs of Placing an LPG Fueling Station at the DPW Facility
LPG suppliers will absorb part of the up -front costs of the on-site tank and dispenser if
the Village enters into a contract with them to purchase the fuel. The capital cost of the
tank and dispenser, as well as the maintenance and repair of the dispenser, are paid
through a per -gallon markup on the fuel. The Village would be responsible for the
electrical hookup and installation of crash protection for the fuel site. For this analysis,
we used a cost of $50,000 as seen in the figure below.
9 Although there may an increase in NPV, it still may not achieve a positive NPV.
35
v 1. • i• I+•
Alternative Fuel Study
Final Report
Figure 19: Analysis Parameters for LPG Scenarios
GENERALPARAMETERS
Electrical Hookup and Crash Protection for Skid Tank and Dispenser
$50,000
Salvage Value
0%
Amortization Schedule on Infrastructure (Years)
1
LPG Cost Natural Unit: Gallons
$2.16
LPG GGE Conversion Factor
1.38
LPG Cost (GGE)
$2.97
Federal Tax Credit per LPG Gallon
-$0.50
Gasoline Cost (GGEs)
$2.93
Mount Prospect Gasoline Cost GGEs
$2.90
Diesel Cost Natural Unit: Gallons
$3.37
Diesel GGE Conversion Factor
0.90
Diesel Cost (GGE)
$3.03
Mount Prospect Diesel Cost (Natural Units)
$3.27
Mount Prospect Diesel Cost GGE
$2.94
Inflation Rate
3%
Discount Rate
6.0%
As can be seen above, LPG has a significantly lower price per gallon than gasoline or
diesel, however when this is adjusted for the reduced energy content in LPG, the
benefits of LPG are minimized (speaking in terms of cost only). The increased capital
costs of purchasing LPG vehicles are not offset by the changes in fuel cost. Due to the
low utilization of many of the vehicles, they fail to consume enough fuel to make an
increase in capital costs worthwhile.
Hybrid Electric Vehicles (HEVs)
As discussed earlier in the section on the use of HEVs in the existing fleet, there are
many advantages and disadvantages to their use. In order to evaluate whether there
were opportunities to use hybrids in other vocations in the Village fleet, we used the
same process of prioritizing our analysis based on class fuel consumption and found
that there are hybrids in Police patrol use in New York City. Although there are many
drawbacks that will be discussed further below, we went ahead and conducted the
analysis to see if there would be an economic benefit to replacing current police sedans
(Crown Victorias, Impalas, and Ford Police Interceptors) with Ford Fusion Hybrids.
Advantages of Hybrid Patrol Sedans
• In vocations where there is extensive idling (as in Police work), there are many
advantages to the idle -stop feature of hybrid engine.
• The use of hybrid vehicles in Police patrol use in New York City is the type of
proof -of -concept that is needed for more widespread adoption of hybrids in patrol
use.
36
Alternative Fuel Study
Final Report
• The highest net present values and shortest payback period were achieved when
using hybrid vehicles for patrol sedans.
Disadvantages of Hybrid Patrol Sedans
• Ford Fusion Hybrids are not intended by Ford to be used as a pursuit -rated
vehicle. The major automobile manufacturers in the police market (Ford, GM,
Dodge) have developed models that they specifically market toward police
departments, which contain features that are specifically designed for the types
of severe service found in the law enforcement profession. Examples of these
features include:
o Electrical systems that are designed to easily integrate with aftermarket
radio, emergency lighting, and siren systems;
o Driver and front passenger seats specifically designed to comfortably
accommodate officers with duty belts;
o All wheel drive;
o Increased ground clearance;
o Routine service items that are uniform across multiple models and model
years. For example, the Ford Police Interceptor Sedan and Utility share
brake, wheel, tire, filter, wiper, and battery components, which reduces the
need for duplicative spare parts inventories and technician training; and
o Heavy-duty brakes and pursuit -rated tires.
• The Ford Fusion Hybrid has not been evaluated by the two most reputable
organizations in law enforcement vehicle testing; the Michigan State Police, and
the Los Angeles County Sheriff's Department. Each year, they publish the results
of their testing of various law enforcement vehicles. Municipalities often cite the
requirement that vehicles have gone through these trials before they can be
included in a proposal to provide police patrol sedans.
• The use of hybrids as patrol sedans may be acceptable as a small percentage of
a large police department, as is the case with the New York City Police
Department, but would likely not prove effective in the Village's Police
Department.
Other Considerations of Hybrid Patrol Sedans
The use of Ford Fusion hybrid sedans would be a completely unorthodox approach to
saving fuel. Many of the same benefits in saving fuel can be achieved (albeit not to the
same extent) by simply modernizing the fleet. To that end, the Village has already
increased its fuel economy in the Police fleet by replacing older Crown Victorias with
newer Ford Interceptor sedans. The important factor is also that there aren't the same
significant trade-offs in pursuing a modernization strategy that exist with the adoption of
an HEV strategy.
37
Summary of Costs
Alternative Fuel Study
Final Report
In evaluating HEV options, we analyzed the net present value (NPV) of a replacement
plan at intervals of five, ten, and fifteen years. These values include the increases in
vehicle acquisition costs from the Non-AFV Smoothed Replacement Plan and the
changes in operating costs. In the figure below, the results of the analysis indicate that
the adoption of HEVs in the classes discussed above would return an investment by
year five (represented by a positive NPV). Having said that, it is important to restate that
this is not an apples -to -apples comparison between vehicles that meet the same set of
specifications.
Figure 20: Net Present Value of HEV Investment Scenario
Feasibility and Costs of HEVs
As was done for the previously discussed scenarios, we developed an HEV
Replacement Plan that features selected classes of vehicles being replaced with hybrid
variants when they become eligible for replacement. The capital costs for both
scenarios are very similar, as the capital cost of a Ford Fusion Hybrid is very similar to
the capital cost of a Ford Police Interceptor sedan. The increase in cost that is incurred
by purchasing the hybrid powertrain is negated by nature of the Fusion being a in a
smaller vehicle class (mid-size).
Figure 21: HEV Replacement Parameters
Asset Class
Replacement
Replacement
HEV -Related
HEV
Description
Cycle in
Months
Cycle in Miles or
Hours
Price Increase
(Decrease)10
Price
4 DR SEDAN, FULL -8
4 DR SEDAN, FULL -10
4 DR SEDAN, FULL -12
4 DR SEDAN, COMP -8
In drawing a comparison of capital costs under both scenarios, the timing of vehicle
replacement is kept consistent between the Non-AFV Replacement Plan and the HEV
Replacement Plan. The Village would have to spend approximately the same amount in
net capital costs each year to fund the increased purchase price of hybrid vehicles.
10 The capital costs here are shown as a decrease, as the mid-size hybrid sedan has a lower MSRP than
the full size, conventionally fueled sedan.
38
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Figure 22: Comparison of Non-AFV and HEV Replacment Plans
Fiscal
Year
Assets Replaced
Non-AFV
Smoothed
HEV
Cost
Non-AFV
Smoothed
(Millions)
HEV
Cost
2016
29
29
$2.3
$2.3
($0.0)
2017
25
25
$1.7
$1.9
$0.1
2018
16
16
$1.9
$1.9
$0.0
2019
22
22
$1.4
$1.6
$0.2
2020
10
10
$1.4
$1.4
($0.0)
2021
18
18 1
$1.5
$1.5
$0.0
2022
24
24
$1.5
$1.5
($0.0)
2023
12
12
$1.2
$1.2
($0.0)
2024
17
17
$2.3
$2.2
$0.0
2025
20
20
$1.6
1 $1.6
($0.0)
Total
193
1 193 1
$16.8
J$17.0
$0.2
Using the same methodology described under previous sections, we used fuel records
to forecast future consumption of gasoline and diesel as vehicles are replaced.
Plug-in Hybrid Electric Vehicles (PHEV)
Plug-in Hybrid Electric Vehicles function much the same as HEVs, with many of the
same advantages and disadvantages. PHEVs, however, typically have higher capacity
batteries and can function at higher speeds in electric -only mode than HEVs. When
parked, PHEVs are charged from either a standard 110V outlet or from a purpose-built
electric vehicle (EV) charging station. While it is possible to charge a PHEV exclusively
from a household outlet, this type of charging would not include the safety features that
are designed into the EV charging stations. Also, the speed at which the vehicle
recharges is dependent upon the level of the charging station, with stations being rated
at levels 1-3. For the purposes of our analysis, we are using the figures for a Ford
Fusion Energi being charged on a level 2 charger, which would take approximately 2.5
hours.
Advantages of Plug-in Hybrid Electric Vehicles
• The first 20 miles of use of a PHEV can be accomplished with just the charge
from the batteries.
• Energy that is supplied to the vehicle from the electric grid is produced more
efficiently than energy supplied to the vehicle from regular refueling.
• Emission from power plants is lower when producing electricity than the
emissions of the vehicle itself for equivalent levels of mileage travelled.
39
Alternative Fuel Study
Final Report
• PHEVs can provide many of the benefits of electric vehicles (EV) without strict
dependence on charging station infrastructure and its associated operational
limitations. Essentially, PHEVs avoid the range anxiety experienced by EV users.
Disadvantages of Plug-in Hybrid Electric Vehicles
• The advantages of using PHEVs are dependent upon the provision of charging
infrastructure. Many buildings were constructed without outlets or electrical
circuits on the outside of the building. New circuits would need to be run to install
charging stations at these locations, including locations inside parking garages.
Furthermore, buildings may not have enough space in their circuit breaker panels
to accommodate additional circuits for charging stations. Additionally, many
circuit breaker panels might not have enough capacity to handle the additional
current that is needed to charge multiple vehicles, which would require more
expensive installation (we have included these costs in our analysis).
• PHEVs are more expensive than HEVs, which requires that these increased
capital costs are offset by enough usage in the electric -only mode to make
economic sense.
Other Consideration of Plug-in Hybrid Electric Vehicles
There are very few models of vehicles available as PHEVs, most of which are
passenger sedans and small hatchbacks. There are some aftermarket PHEV systems
available for medium/heavy-duty trucks (mostly in utility applications, such as aerial
trucks) that are manufactured by Odyne systems; however at the fuel consumption
levels of the Village's vehicles in those applications, these would not be economically
feasible. The increased capital costs would not be recouped within the useful life of the
trucks.
Summary of Costs
In evaluating PHEV options, we analyzed the net present value (NPV) of a replacement
plan at intervals of five, ten, and fifteen years. These values include the increases in
vehicle acquisition costs from the Non-AFV Smoothed Replacement Plan and the
changes in operating costs. In the figure below, the results of the analysis indicate that
the adoption of HEVs in the classes discussed above would return an investment by
year five (represented by a positive NPV). Having said that, it is important to restate that
this is not an apples -to -apples comparison between vehicles that meet the same set of
specifications.
Figure 23: NPV of PHEV Investment Scenario
W
Feasibility and Costs of PHEVs
Alternative Fuel Study
Final Report
As was done for the previously discussed scenarios, we developed a PHEV
Replacement Plan that features selected classes of vehicles being replaced with plug-in
hybrid variants when they become eligible for replacement. The capital costs for both
scenarios are very similar, as the capital cost of a Ford Fusion Energi is approximately
$5,000 higher than the capital cost of a Ford Police Interceptor sedan.
Figure 24: PHEV Replacement Parameters
Asset Class
Replacement
Replacement
PHEV-
HEV
Description
Cycle in Months
Cycle in Miles or
Related Price
price
$2.3
$0.0
Hours
Increase
25
4 DR SEDAN, FULL -5
$1.9
$0.1
2018
16
4 DR SEDAN, FULL -8
$1.9
$1.9
$0.0
W., oil from
4 DR SEDAN, FULL -10
22
$1.4
$1.6
$0.2
4 DR SEDAN, FULL -12
10
10
$1.4
$1.4
4 DR SEDAN, COMP -8
2021
18
18
$1.5
4 DR SEDAN, COMP -12
$0.0
2022
24
24
In drawing a comparison of capital costs under both scenarios, the timing of vehicle
replacement is kept consistent between the Non-AFV Replacement Plan and the PHEV
Replacement Plan. The Village would have to increase replacement spending each
year to fund the increased purchase price of the PHEVs.
Figure 25: Comparison of Non-AFV and PHEV Replacement Plans
Fiscal
Year
Assets Replaced
•
Smoothed
PHEV
Cost
•
Smoothed
(Millions)
PHEV
•
(Savings)
2016
29
29
$2.3
$2.3
$0.0
2017
25
25
$1.7
$1.9
$0.1
2018
16
16
$1.9
$1.9
$0.0
2019
22
22
$1.4
$1.6
$0.2
2020
10
10
$1.4
$1.4
$0.0
2021
18
18
$1.5
$1.5
$0.0
2022
24
24
$1.5
$1.5
$0.0
2023
12
12
$1.2
$1.2
$0.0
2024
17
17
$2.3
$2.3
($0.0)
2025
20
20
$1.6
$1.7
$0.0
Total
193
193
$16.8
$17.2
$0.4
Using the same methodology described under previous sections, we used fuel records
to forecast future consumption of gasoline, diesel, and electricity as vehicles are
41
Alternative Fuel Study
Final Report
replaced. We used the EPA ratings of 21 MPG for a Ford Police Interceptor and 38
MPG for a Ford Fusion Energi (when functioning in hybrid mode), and factored that the
Fusion Energi would be operating in electric -only mode at 50% of the time.
Electric Vehicles
We reviewed the available electric vehicles on the market and determined that there
weren't any classes of vehicles for which there was an operationally and financially
feasible option available. The electric vehicles considered included the Ford Focus
electric, which would not prove to be financially feasible for any of the lower use
applications that it would be operationally feasible to place it in, and the Smith Electric
truck, which would also not prove to be financially feasible for the levels of usage that
the Village would likely use it for.
ENVIRONMENTAL IMPACTS
In order to develop a profile of the emissions of the Village's fleet, we used the Non-AFV
Replacement Plan and its associated fuel consumption estimates as the benchmark
against which the E85, CNG, HEV, LPG, and PHEV replacement plans were compared.
The Non-AFV replacement plan was developed under the assumption that the vehicle
usage that occurred in 2014 would continue at the same levels into the future. As stated
earlier, the CAFE standards mandate the improvement in fuel economy for light-duty
vehicles at a rate of approximately five percent per year in order to reach the 2025
goals.. For medium- and heavy-duty trucks, improvements of approximately one percent
per year are required through 2018. Using these figures, we developed fuel projections
that take into account the timing of vehicle replacements and the associated
improvements in fuel economy by vehicle.
Another assumption that we used in the development of the emissions profile is the use
of a composite vehicle for the purposes of simplifying the analysis. While the calculation
of barrels of petroleum use and short tons of greenhouse gas emissions are simple
multipliers based on the total quantities and types of fuel consumed, the calculations for
carbon monoxide (CO), oxides of nitrogen (NOx), particulate matter (PM), and volatile
organic compounds (VOC) are make, model, and year dependent. Based on the current
fleet profile (i.e., a mix of passenger cars, light duty, medium duty, and heavy duty
trucks), CO, NOx, PM, and VOC were calculated using a light commercial truck as a
surrogate for the fleet. The results of the analysis for the Non-AFV Replacement Plan
are shown in the figure below.
42
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Figure 26: Non-AFV Replacement Plan Cumulative Emissions
Category
Petroleum Use (barrels)
2,745.4
2,613.1
2,565.4
2,517.1
2,514.4
GHG (short tons)
1,568.8
1,492.6
1,465.4
1,437.5
1,435.9
CO
7,063.0
6,964.2
6,914.8
6,865.4
6,816.0
NOx
651.3
643.4
639.4
635.4
631.5
PM10
16.8
16.7
16.6
16.6
16.5
PM10 (TBW)
60.9
61.1
61.2
61.3
61.4
PM2.5
14.7
14.6
14.6
14.5
14.5
PM2.5 (TBW)
14.7
14.8
14.8
14.9
14.9
VOC
174.4
172.0
170.8
169.6
168.4
VOC (Evap)
71.4
71.4
71.4
71.4
71.4
In each of the tables below, a comparison is made of the cumulative difference in
emissions between the Non-AFV Replacement Plan and the respective alternative fuel
replacement plan. The data in the tables below is in comparison to the data contained in
the figure above.
Figure 27: E85 Replacement Plan Cumulative Emissions Improvements
Category
Petroleum Use (barrels)
779.4
890.9
907.4
991.2
1033.6
GHG (short tons)
245.2
281.4
286.8
313.1
326.4
CO
5708.0
-696.4
-691.5
-686.5
-681.6
NOx
-1016.8
-193.0
-191.8
-190.6
-189.4
PM10
2.1
-6.7
-6.7
-6.6
-6.6
PM10 (TBW)
-4.2
0.0
0.0
0.0
0.0
PM2.5
0.0
-5.8
-5.8
-5.8
-5.8
PM2.5 (TBW)
-2.1
0.0
0.0
0.0
0.0
VOC
29.4
17.2
17.1
17.0
16.8
VOC (Evap)
71.4
10.7
10.7
10.7
10.7
As can be seen in the figure below, there are reductions in the barrels of petroleum
used, in the short tons of greenhouse gases emitted, and the VOCs. There are,
however, increases in CO, NOx, and PM.under the E85 Replacement Plan, the largest
amounts of greenhouse gases and petroleum reductions would be realized relative to
other plans.
43
Alternative Fuel Study
Final Report
Figure 28: LPG Replacement Plan Cumulative Emissions Improvements
Category
Petroleum Use (barrels)
115.2
473.6
930.9
1616.2
2438.1
GHG (short tons)
9.3
35.3
71.9
126.4
193.1
CO
0.0
5616.1
11186.3
9126.7
7081.9
NOx
0.0
-1014.5
-2027.8
-1964.3
-1901.1
PM10
0.0
2.3
4.6
-3.7
-12.0
PM10 (TBW)
0.0
-4.0
-7.9
-7.9
-7.9
PM2.5
0.0
0.2
0.4
-6.8
-14.1
PM2.5 (TBW)
0.0
-2.0
-4.0
-4.0
-4.0
VOC
0.0
28.9
57.5
-27.3
-111.5
VOC (Evap)
0.0
71.4
142.9
157.1
171.4
As can be seen in the figure below, there are improvements in petroleum use,
greenhouse gas emissions, and CO.
Figure 29: CNG Plan Cumulative Emissions Improvements
Category
Petroleum Use (barrels)
202.2
783.0
1489.2
2526.4
3775.9
GHG (short tons)
22.8
86.7
166.8
284.3
427.5
CO
0.0
5616.1
11186.3
9126.7
7081.9
NOx
0.0
-1014.5
-2027.8
-1964.3
-1901.1
PM10
0.0
2.3
4.6
1.3
-2.0
PM10 (TBW)
0.0
-4.0
-7.9
-7.9
-7.9
PM2.5
0.0
0.2
0.4
-2.5
-5.4
PM2.5 (TBW)
0.0
-2.0
-4.0
-4.0
-4.0
VOC
0.0
28.9
57.5
142.3
226.5
VOC (Evap)
0.0
71.4
142.9
178.6
214.3
As can be seen in the figure below, there are cumulative improvements in petroleum
use, greenhouse gas emissions, CO, and VOC. The other categories showed increases
in the emission of NOx and PM.
v 1. • i• I+•
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Final Report
Figure 30: HEV Plan Cumulative Emissions Improvements
Category
Petroleum Use (barrels)
48.2
115.9
183.6
334.9
532.6
GHG (short tons)
27.9
67.0
106.1
193.5
307.7
CO
0.0
5616.1
11186.3
16710.5
22188.8
NOx
0.0
-1014.5
-2027.8
-3040.0
-4051.0
PM10
0.0
2.3
4.6
7.0
9.5
PM 10 (TBW)
0.0
-4.0
-7.9
-11.8
-15.5
PM2.5
0.0
0.2
0.4
0.7
1.1
PM2.5 (TBW)
0.0
-2.0
-4.0
-5.9
-7.8
VOC
0.0
28.9
57.5
85.8
113.9
VOC (Evap)
0.0
71.4
142.9
214.3
285.7
As can be seen in the figure below, there are significant reductions in petroleum
consumption and improvements in greenhouse gas emissions.
Figure 31: PHEV Cumulative Emissions Improvements
COMPARATIVE REVIEW
Of the various scenarios that we studied, we evaluated each one according to whether it
was determined to be operationally and financially feasible. In order to be operationally
feasible, that particular alternative fuel option has to meet the requirements of the
Department that uses it. In order to be financially feasible, the implementation must
have a positive net present value within seven years (thus achieving a return on
investment). The majority of the scenarios evaluated did not provide a return on
investment within the required payback period. These included CNG, E85, LPG, and
PHEV. Of the other scenarios evaluated, most proved not to be operationally feasible,
to include the use of hybrids in Police patrol service.
As stated earlier in the report, the overarching concept uncovered during this study is
that the operational cost savings that accrue over time need to be sufficiently large to
overcome the costs of implementation. The largest gaps between the costs of the
various fuels that can be used in the transportation sector and the fuels currently in use
now by the Village are the prices differences of electricity and natural gas.
Unfortunately, there weren't any electric or plug-in electric hybrid alternatives that would
be operationally feasible, and there weren't any natural gas alternatives that were
deemed to be financially feasible. Essentially, low gasoline and diesel prices make it
more difficult to justify any switch to alternative fuels.
For comparison purposes, Figure 33 in the appendices shows the net present value by
year for each of the scenarios that were evaluated. The zero dollar line (i.e., the X-axis)
45
Alternative Fuel Study
Final Report
indicates spending at the same level as the Non-AFV Smoothed Replacement Plan by
year. Where values are above the X-axis, the investments save money for the Village
and vice versa. In order to increase clarity, we have only shown one E85 scenario, one
LPG scenario, two CNG scenarios, the HEV, and PHEV scenarios on the graph. The
one line that drops off immediately represents the scenario in which the Village would
obtain fuel from the public fuel site in Des Plaines. The costs of driving to and from the
site The next steepest line represents the construction of a CNG compressor site; there
is eventually a return on investment, albeit much too far into the future to be considered
a good investment. The scenarios that decline gradually are the E85 and LPG
scenarios.
Figure 34 shows the cumulative petroleum use by year, with the E85 scenario showing
significantly lower petroleum use than any of the other scenarios evaluated. As
discussed earlier, E85 is primarily sourced from renewable sources, which accounts for
it being significantly lower in petroleum content than the other alternatives evaluated.
M.
v 1. •i• I+•
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Final Report
APPENDICES
Figure 32: Planning Parameters for Non-AFV Replacement Plan
Figure 33: Net Present Value by Year (Dollars)
Figure 34: Cumulative Petroleum Use by Year (Barrels)
47
v 1. � • i• I+•
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Final Report
Figure 32: Planning Parameters for Non-AFV Replacement Plan
Asset
Class
Code
Asset Class Description
Replacement
Cycle in
Months
Replacement
Cycle in Miles
or Hours
Purchase
Price
(today's
01A
4 DR SEDAN, FULL -5
60
70,000
$37,000
01C
4 DR SEDAN, FULL -8
96
70,000
$37,000
01D
4 DR SEDAN, FULL -10
120
85,000
$37,000
01E
4 DR SEDAN, FULL -12
144
85,000
$37,000
04C
4 DR SEDAN, COMP -8
96
85,000
$31,000
04E
4 DR SEDAN, COMP -12
144
85,000
$31,000
06E
P/U 2WH FULL -12
144
50,000
$38,000
07E
P/U 4WH FULL -12
144
50,000
$38,000
09A
4wh Mid Size Sport U-5
60
85,000
$35,500
09B
4wh Mid Size Sport U-7
84
85,000
$34,000
09C
4wh Mid Size Sport U-8
96
85,000
$34,000
09D
4wh Mid Size Sport U-10
120
85,000
$31,400
10E
VAN, FULL -12
144
50,000
$30,000
11E
VAN, COMPACT -12
144
50,000
$25,000
13F
VAN10.GVWR+SAXE-14
168
50,000
$120,000
13G
VAN10.GVWR+SAXE-15
180
50,000
$110,000
14F
TRUCK10/15GSAXE-14
168
50,000
$51,800
15F
TRUCK15/25GSAXE-14
168
50,000
$55,000
16H
TRUCK25.35GSAXE-17
204
50,000
$100,000
17H
TRUCK35.-GSAXE-17
204
50,000
$135,000
18G
HIGH LIFT -15
180
50,000
$185,000
18GS
HIGH LIFT -15 Scissor
180
$15,000
19H
SIGN TRUCK -17
204
50,000
$125,000
20H
FLUSHER -17
204
50,000
$145,000
21H
CATCHBASIN CLNR-17
204
50,000
$250,000
23H
CRANE TRUCK -17
204
50,000
$140,000
24G
BACKHOES-15
180
5,000
$135,000
25G
TRACTORS -15
180
5,000
$55,000
26E
SWEEPERS -12
144
5,000
$190,000
281
TRAILERS 0-5.GV-20
240
$8,417
32G
END LOADER TRAC-15
180
5,000
$135,000
331
TRAILER - Tandem HD -20
240
2,500
$8,000
341
TRAILER - LD -20
240
$4,000
35G
ROLLER ASPHALT -15
180
5,000
$28,200
37G
TRAI LRD ARROW -15
180
2,500
$8,000
38G
SNOWBLWR-TRACTD-15
180
2,500
$105,000
39G
CHIPPER -15
180
2,500
$58,000
41G
GENERATOR, MNTD-15
180
2,500
$54,500
45G
STUMP CUTTER -15
180
2,500
$35,000
47G
WELDER-TRAILD-15
180
2,500
$9,000
48G
61N.PUMP,TRAILD-15
180
2,500
$20,000
49G
SKID LOADER -15
180
5,000
$67,500
51G
AIR COMPRESSORS -15
180
2,500
$17,500
52G
MOWRSNWBLWR-15
180
5,000
$131,500
53G
TREE SPRAYER -15
180
2,500
$12,500
EN
Alternative Fuel Study
Final Report
54H
LEAF MACHINE -17
204
$48,000
55G
ASPHAULT HEATER -15
180
2,500
$30,000
56G
SWEEPER/SCRUBBR-15
180
5,000
$53,000
57G
TRACK BACKHOE -15
180
5,000
$75,000
58H
PRENTICE LOADER -17
204
50,000
$130,000
61G
FORK LIFT -15
180
5,000
$29,500
65E
Full Size Sport Util-12
144
50,000
$38,000
66C
4wh Full Size Sp Uti-8
96
100,000
$47,000
66E
4wh Full Size Sp Uti-12
144
70,000
$47,000
67H
Leaf Machine Vacuum -17
204
2,500
$42,000
74G
S/P Stump Grubber -15
180
5,000
$20,000
91G
SMALL ENGINES -15
180
2,500
FAC
AMBULANCE -8
96
$216,407
FAD
AMBULANCE -10
120
$216,407
FBG
Fire Bus -15
180
$66,000
FGOLFG
Fire Club Car w/Cot-15
180
2,500
FLG
Ladder Truck -15
180
$1,000,000
FP/SG
FIRE PUMPER/SQUAD-15
180
$582,000
FPG
FIRE PUMPER -15
180
$570,043
FSG
FIRE SQUAD -15
180
$242,500
FSGCC
FIRE SQUAD -15 -Cab -Chassis Only
180
$117,613
HBB
HYBRID FWD -7
84
85,000
$32,931
HBD
HYBRID FWD -10
120
85,000
$32,931
LTG
light tower -15
180
2,500
MBG
MESSAGE BOARD -15
180
2,500
PTVF
Prisoner Transport -14
168
50,000
$75,000
SPG
Smart Radar Trailer -15
180
TDH
Tandem - 53,000 GVWR-17
204
50,000
$145,000
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8 S O S S 8
O O O O O O
LO