Kelson Solutions LLC
|Posted by [email protected] on September 8, 2013 at 4:40 PM|
The Case for Natural Gas School Buses
By Edward Himes - Managing Director EGHimes Consulting LLC & Daniel O'Connell - Managing Director Kelson Solutions LLC.
As the fracking debate rages in Albany and with the Governor seeming to want to delay the decision as long as possible many in the public arena are wondering if Natural Gas is the right fuel choice for our future fuel choice here in NY State. If this is so when will we see it take hold and become common place. With the continued disparity of cost per gallon equivalent between natural gas and gasoline the lure of quick savings is enticing to almost everyone. So too are fleet managers scrambling to "run the numbers" on their fuel cost as continued budget pressure has us all looking for ways to reduce cost wherever possible.
Upon further investigation what would seem like a simple miles traveled versus per gallon fuel cost equation turns out to be anything but! There are a number of significant factors for fleet operators to consider. Costs such as: vehicle conversion, infrastructure installation, maintenance facility upgrades, and fuel provider price margin are all required. We at Kelson Solutions set out to run an example for the alternative fuel fleet market in Rochester. We thought what better place to start than where academia, government and consumer intersect - School buses.
We started with the United States Department of Energy VICE model and tweaked it a bit for our Rochester application. Then we selected an average fleet size of 40 buses to be converted (unfitted with NG tanks and fuel systems). We then added in all the costs based on input from local sources (Clean Cities, Honeoye Falls School District, Federal and Local tax incentives, Station Providers, Conversion Companies ), our own expertise and then let the model churn overnight looking for satisfactory return on investment numbers. Most corporations will expect to realize a return on their investment withion 5 years.
What the analysis shows is that with the right incentives, appropriate start up capitol, adequate station throughput, and the correct number of vehicles the return on investment can be significant.
Let us know if you want to run a scenario to determine if natural gas is the right choice for your fleet application.