Port Authority of Allegheny County looks at fuel conversion
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Based on current prices, Port Authority could cut its bus operating costs by 40 percent if the vehicles ran on natural gas rather than diesel fuel.
"What I've certainly heard from a lot of elected officials is that it's a no-brainer, just convert," authority CEO Steve Bland said at a briefing Wednesday. "It's not that simple."
To convert, the authority would have to build compressed natural gas fueling stations at bus garages that are not designed to accommodate them; it would have to buy new buses, which currently cost as much as $100,000 more than coaches that burn diesel; and it would have to hope that the current difference between natural gas and diesel prices holds.
It's risky, and the authority appears ready to go ahead only if it can find a private investor willing to shoulder that risk.
The agency, with a grant from the Heinz Endowments, has begun an in-depth study of the feasibility of converting. Board members were briefed on a preliminary design report by consultant Gladstein Neandross & Associates.
The report estimated $18 million in startup costs to retrofit the East Liberty bus garage and the Manchester repair facility with natural gas refueling stations. Two other bus garages, Ross and West Mifflin, are built or situated in such a way as to make conversion unfeasible, while the other, Collier, would lose some of its employee parking in a conversion, the company determined.
It estimated annual fuel savings at $2.9 million.
What the authority is studying is whether a private investor would be willing to finance the conversion in exchange for a portion of the fuel savings. Mr. Bland said when he first posed that scenario to a financial consultant, the consultant asked if he was joking, but became more interested after a closer look at the idea.
Even with a private investor, the authority would probably need to line up about $8 million in grants to fill a financing gap in the project, said David Ross, director of business development for EQT, which is working with the authority on the project. The authority has a $3 million federal clean fuels grant but the program that provided the funding has been eliminated by Congress.
The Heinz Endowments is funding the study as part of its Breathe Project, a multipronged effort to improve regional air quality.
Advantages of a conversion would be reduced emissions, support for the state's Marcellus Shale gas drilling industry and the lower fuel costs, although Mr. Bland said transit vehicles account for "a tiny, tiny fraction" of the region's pollution.
Disadvantages are the conversion costs, the inability to convert the entire fleet because of the design shortcomings at the Ross and West Mifflin garages and the higher cost of buses -- currently $65,000 more for a 40-foot coach and $100,000 more for a 60-foot articulated bus.
There is also uncertainty about what fuel prices will do.
The next step, which will begin early next year, is an analysis of whether a public-private partnership to finance the conversion would be feasible.
First Published November 22, 2012 12:00 am