Oneida-Herkimer Solid Waste Management Authority · PDF fileOneida-Herkimer Solid Waste Management Authority . ... EXECUTIVE SUMMARY ... the Authority requested a feasibility study

Oneida-Herkimer Solid Waste Management Authority

CNG Fueling System Report

Prepared For

THE NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY

Albany, New York

Adam Ruder Project Manager

Prepared By

Oneida-Herkimer Solid Waste Management Authority Utica, New York

William A. Rabbia Executive Director

and

BARTON & LOGUIDICE, P.C. Syracuse, New York

Dean G. Mason, P.E.

Vice President Revised October 2013

NOTICE

This report was prepared by Barton & Loguidice, P.C., in the course of performing work contracted for

and sponsored by the New York State Energy Research and Development Authority and the Oneida-

Herkimer Solid Waste Management Authority (hereafter the “Sponsors”). The opinions expressed in this

report do not necessarily reflect those of the Sponsors or the State of New York, and reference to any

specific product, service, process, or method does not constitute an implied or expressed recommendation

or endorsement of it. Further, the Sponsors and the State of New York make no warranties or

representations, expressed or implied, as to the fitness for particular purpose of merchantability of any

products, apparatus, or service, or the usefulness, completeness, or accuracy of any processes, methods, or

other information contained, described, disclosed, or referred to in this report. The Sponsors, the State of

New York, and the Contractor make no representation that the use of any products, apparatus, process,

method, or other information will not infringe privately owned rights and will assume no liability for any

loss injury, or damage resulting from, or occurring in connection with, the use of information contained,

described, disclosed, or referred to in this report.

- i -

Table of Contents

Section Page EXECUTIVE SUMMARY ....................................................................................................................................... S-1 SECTION 1 ............................................................................................................................................................... 1-1 BACKGROUND .............................................................................................................................................. 1-1

Oneida-Herkimer Solid Waste Management Authority Background Information .................................. 1-1 Oneida-Herkimer Solid Waste Management Authority Annual Fuel Costs ............................................ 1-1

SECTION 2 ............................................................................................................................................................... 2-1 TASK 1 – VERIFICATION OF INPUT DATA FOR THE DOE-VICE MODEL ......................................... 2-1 TASK 2 – EVALUATE TRUCK BRANDS/TYPES AVAILABLE............................................................... 2-9 TASK 3 – EVALUATE CNG FUELING FACILITY LOCATIONS ........................................................... 2-11 TASK 4 – EVAULATE FINNANCIAL CONSIDERATIONS AND COSTS ............................................. 2-15 TASK 5 – IDENTIFY FUNDING AND GRANT OPPORTUNITIES ......................................................... 2-16

Tables TABLE 1 - AUTHORITY SPECIFIC FLEET TYPE INFORMATION .................................................................. 2-3 Appendices Appendix A – Task 1 Supporting Information Appendix B – Task 2 Supporting Information Appendix C – Task 3 Supporting Information Appendix D – Task 4 Supporting Information – DOE-VICE Models

S-1

EXECUTIVE SUMMARY

The Oneida-Herkimer Solid Waste Management Authority was created by the New York State

Legislature at the request of the two counties on September 1, 1988 and provides waste management

services for the benefit of Oneida and Herkimer Counties. The Authority currently owns several

operational solid waste management facilities, one closed facility and a regional landfill facility. The

Authority’s integrated solid waste system has been operational for over twenty years and is one of the

most comprehensive regional programs within the state.

The Authority operations currently include two distinct hauling activities. In the first hauling operation,

over thirty different private and municipal haulers deliver waste to the Authority’s transfer stations, much

of it in packer type trucks. The second hauling activity is the transfer of waste from the transfer stations

to the Regional Landfill, which will be the focus of this study.

The Authority currently contracts with private trucking companies for transfer of waste to the landfill

utilizing fifteen trucks per day. This hauling activity averages 1,850 total miles per day for the fleet of

trucks. The current hauling contract will expire in October of 2016.

As part of the Authority’s commitment to preserving the environment as well as stimulating regional

economic growth, the Authority requested a feasibility study for the installation of a Compressed Natural

Gas (CNG) fueling station and mandating the use of CNG vehicles in their upcoming RFP for hauling

services.

The tasks that were completed as part of this feasibility study were as follows:

Task 1 – Verification of Input Data for the DOE –Vice Model

All inputs for the Department of Energy (DOE)-Vice Model were reviewed and tailored to the

Authority’s specific hauling operation between the transfer stations and the regional landfill. Based on

the specific hauling model for the Authority’s operations, the key input parameters for the model were

found to be the number of trucks required for the haul, the purchase price of fuel by the Authority and the

funding available for the potential project.

S-2

Currently the Authority utilizes fifteen trucks on the hauling operation that was evaluated. With the

conversion to CNG two different hauling scenarios were analyzed. The first utilized the current fleet of

fifteen trucks at current payloads averaging a total gross weight of 92,000 lbs. and the second scenario

utilized twenty trucks and a maximum gross combined weight (GCW) of 80,000 lbs. Three fueling

locations were analyzed for each scenario of trucks.

The current price per gallon for diesel fuel utilized in the model is $3.187 per gallon and the purchase for

CNG estimated at $2.416 per gasoline gallon equivalent (GGE). This price for CNG is the equivalent of

$2.648 per diesel gallon equivalent (DGE). At current rates to the Authority, the CNG is approximately

$0.539 per gallon less on a fuel only equivalent basis.

Several state and federal incentives are available for the conversion of fleets to alternative fuels, including

CNG. While the Authority has been very successful on several previous funding opportunities, as a

conservative estimate, no additional funding sources or incentives were utilized in the calculation of the

DOE-VICE Models.

Utilizing the Authority’s specific parameters for this hauling operation the cash flow payback estimated

with the DOE VICE Model was calculated to be in the range of 6.6 to over 12 years, based on the fueling

location and number of trucks estimated. This is approximately the target payback of 7 years for

progressive fleets if the existing NYSDOT CNG fueling facility is utilized. All scenarios analyzed were

well beyond the 3 year target payback for more risk-averse fleets.

Task 2 – Evaluate Truck Brands/Types Available

Three heavy duty truck manufacturers within the Utica area were contacted and all indicated that CNG

powered trucks are currently becoming available directly from each of the manufacturers. Two of the

three manufacturers interviewed are providing the diesel powered trucks to the Contractor currently under

contract for the specific hauling operation investigated and were found to have very detailed knowledge

on the Authority’s specific haul requirements.

For this application, only one CNG powered engine is currently available. This engine is the Cummins-

Westport ISX12 G, which is rated up to 400 HP with a peak torque of 1,450 lb-ft. Engineers at the

Cummins-Westport were interviewed and a technical evaluation of this engine was completed. The gross

S-3

combined weight (GCW) for this engine is recommended and warrantied up to 80,000 lbs. Currently the

hauling operation studied averages are at a 15% higher GCW (92,300 lbs.). Reducing the maximum load

weights to 80,000 would increase the required number of trucks for the haul from the current fifteen by

approximately 33% to a minimum fleet size of twenty trucks.

At this time, it is recommended that the Authority does not pursue a full fleet conversion until such time

that the larger Cummins –Westport ISX 15 G engine is released during 2016 for this hauling application.

This larger engine is anticipated to be more applicable and suited for the Authority’s larger payloads and

hauling conditions.

Task 3 – Evaluate CNG Fueling Facility Locations

Three potential fueling locations were evaluated as part of this study. The primary location identified for

a fueling station was adjacent to Authority’s existing Recycling Center in Utica. The second location

identified was an upgrade of the current New York State Department of Transportation (NYS DOT)

fueling facility operated along Genesee Street in Utica, just south of the NYS Thruway and canal, and the

third location was at the Regional Landfill in Ava.

While the existing fueling facility at the NYS DOT provided the least infrastructure investment and the

shortest payback to the Authority, the restricted expandability of the system and limited access at this

location are significant detriments. With available areas for future expansion and time filling operations,

the Recycling Center represents the recommended installation site. It should be noted that the

Authority’s landfill also has the potential for biogas transportation fuel development in the future based

on the methane that is being generated and collected at the facility

Task 4 – Evaluate Financial Considerations and Costs

Additional financial and operational scenarios were evaluated that could be integrated into the system.

The first scenario investigated was the comparison of a CNG fueling facility installed and operated by a

private developer to a facility owned and operated by the Authority. A developer based operation would

be the only option if the existing NYSDOT location was utilized, but either option could be implemented

if the Authority installed a system at the Recycling Center or Regional Landfill.

S-4

Based on the critical nature of the hauling operation investigated and the specialty equipment and

technical expertise required to operate and maintain this type of fueling system, the recommended option

would be to have a private developer construct, own and operate the proposed facility.

If the new CNG fueling facility were constructed at the Recycling Center or Regional Landfill, the

financing could be carried by either a Developer or the Authority. With the Authority financing only the

infrastructure portion of the conversion, the annual debt service was estimated to be approximately

$240,000 including contingencies. If the trucking fleet and new trailers were also financed by the

Authority, the estimated annual debt service is would increase to between $650,000 and $800,000

annually, depending on the total number of hauling units included.

Task 5 – Identify Funding and Grant Opportunities

Several grant funds are available within New York State at this time for this type of project and include

NYS DOT - CMAQ (Congestion Mitigation & Air Quality Improvement) program, Environmental

Protection Agency (EPA) – National Clean Diesel Funding Assistance program and US DOE - Clean

Cities Coalition. Based on the calculated paybacks timeframes and useful life of the equipment, we

recommend the funding and grant opportunities be secured by the Authority prior to proceeding with

conversion of the hauling fleet.

1-1

Oneida-Herkimer Solid Waste Management Authority CNG Fueling System

SECTION 1

BACKGROUND

Oneida-Herkimer Solid Waste Management Authority Background Information

The Oneida-Herkimer Solid Waste Management Authority was created by the New York State

Legislature at the request of the two counties on September 1, 1988 and provides waste management

services for the benefit of Oneida and Herkimer Counties. The Authority currently owns several

operational solid waste management facilities, one closed facility and a regional landfill facility. The

Authority’s integrated solid waste system has been operational for over twenty years and is one of the

most comprehensive regional programs within the state.

The Authority operations currently include two distinct hauling activities. In the first hauling operation,

over thirty different private and municipal haulers deliver waste to the Authority’s transfer stations, much

of it in packer type trucks. The second hauling activity is the transfer of waste from the transfer stations

to the Regional Landfill, which will be the focus of this study.

The Authority currently contracts with private trucking companies for transfer of waste to the landfill

utilizing fifteen trucks per day. Currently Fred Burrows Trucking and Excavation, of Whitesboro New

York is the Contractor completing this hauling contract for the Authority. The hauling activity averages

1,850 total miles per day for the fleet of trucks. The current hauling contract will expire in October of

2016.

Oneida-Herkimer Solid Waste Management Authority Annual Fuel Costs

Annul tonnage hauled from the Authority’s transfer stations to the regional landfill has remained

relatively steady since the start of the landfill operations in the fall of 2006. The majority of the waste

transferred (68.6%) is hauled from the Utica Transfer Station, with the remainder hauled from the Rome

Transfer Station. The Authority’s operating personnel have indicated that the current hauling system has

1-2

been effective, financially efficient for the Authority and well managed by a third party Contractor with

few difficulties.

Annual fuel usage has averaged 130,000 gallons over the last several years. At the current cost of $3.187

per gallon, this equates to an annual average cost of approximately $415,000 to the Authority. Based on

the average daily mileage of 1,850 miles per day and a typical 5 day per week for the hauling schedule,

the average fuel mileage of the hauling fleet was calculated to be 3.7 miles per gallon. Within the

Authority hauling contract, provisions have been included to specify that the minimum fuel mileage a

Contractor must achieve in the hauling operations. This goal was established not only to minimize cost

risks to the Authority on fuel consumption by the Contractor, but also to reduce the environmental

impacts of the hauling fleet by promoting efficient vehicle selection by the Contractor. Discussions with

the truck manufacturers providing the hauling trucks and the current Contractor have indicated that

several measures have been included to improve the efficiency of the current trucks being utilized.

Fairings and other aerodynamic improvements have yielded the largest improvements in fuel efficiency to

date.

2-1

Oneida-Herkimer Solid Waste Management Authority CNG Fueling System

SECTION 2

TASK 1 – VERIFICATION OF INPUT DATA FOR THE DOE-VICE MODEL

The Vehicle and Infrastructure Cash-Flow Evaluation (VICE) model allows fleet managers to assess the

soundness of converting their fleets to run on compressed natural gas. The model was built by National

Renewable Energy Laboratory (NREL) with funding from the U.S. Departments of Energy’s Vehicles

Technologies Program and targeted municipal governments. Municipal fleets were identified to be well

suited for CNG vehicles, based on the primary reason that they operate from a centrally located point

within the municipality allowing for a central fueling location. Typical fleets outlined within the model

are transit buses, school buses and refuse trucks.

This model is directly applicable to the Authority’s operation based on the routine daily nature of the

existing hauling operations. The following input parameters were refined or model default parameters

verified based on the Authority specific information:

Fleet Type

The fleet type evaluated is entirely refuse trucks transferring waste from the Authority’s stations in Utica

and Rome to the Regional Landfill. The default parameters for refuse trucks within the VICE model are

as follows:

Average Vehicle Miles Traveled (VMT) – 25,000 / year

Fuel Economy of Diesel Refuse Truck – 2.8 miles per gallon

Fuel Economy of CNG Refuse Trucks – 2.51 miles per DGE (10.5 % reduction for diesel)

Incremental Cost of a CNG Refuse Truck – $30,295

Useful Life of a Refuse Truck – 12 years

Currently the Authority’s fleet is operated by a third party Contractor and consists primarily of day cab

heavy duty diesel powered tractors and 110 cubic yard “walking floor” trailers hauling waste from the

transfer stations to the regional landfill located in Ava. The current Contractor’s truck fleet is primarily a

2-2

split between Freightliner and Peterbilt trucks and each tractor unit has historically averaged

approximately 32,000 miles per year over the last seven years since the opening of the landfill.

The calculated average fuel economy of the diesel powered trucks currently in service is 3.7 miles per

gallon. Both currently utilized truck manufacturers’ indicated that there would be 10% reduction in

performance converting these units to CNG as a fuel with the ISX12 G Cummins-Westport Engine being

the only CNG engine option available at this time. Based on the 10% overall reduction in efficiency, the

calculated fuel economy of CNG powered trucks for this haul would be 3.33 miles per diesel gallon

equivalent (DGE).

The addition of on-vehicle storage for CNG fuel represents a significant portion of the incremental

conversion costs for fleets. These storage vessels must be capable of safely storing the daily route’s

volume of fuel at service pressures of approximately 3,600 pounds per square inch (psi) and be

constructed to withstand the rigors of over the road transportation.

The average daily haul for each unit is approximately 123 miles, with some units, on occasion, making a

maximum of five round trips from the Utica station to the landfill. The maximum typical daily mileage,

estimating five trips to the regional landfill from the farthest transfer station (Utica Station), and three of

these trips along the longest approved haul route (North of Boonville) was calculated at 248 miles. To

accommodate this daily mileage without refueling, the incremental conversion cost for each unit was

prepared based on an on-vehicle CNG storage capacity of 80 DGEs. This CNG fuel capacity would

provide an average daily mileage of approximately 266 miles, leaving an approximate 7% contingency

above the maximum daily haul distance for off-road travel at the transfer station and landfill. The

incremental costs received from the local Freightliner dealership was $32,370 for the current specified

trucks. This incremental value of conversion to a CNG powered vehicle was utilized within the model.

While similar on-road unit trucks are being utilized for above 500,000 miles of useful life, discussions

with the Contractor operating this haul indicated that the 12 year useful life (384,000 miles) would be the

upper limit based on the wear conditions observed within the current fleet. Specific conditions that were

identified for this haul included mostly up-gradient loaded sections from the transfer stations to the

Regional Landfill, consistent average GCWs of over 90,000 lbs. and off-road conditions encountered

when off-loading. The default model value for useful life has accommodated these conditions as typical

for the industry and the default useful life of 12 years for a vehicle was utilized.

2-3

Table 1 compares the default parameter within the VICE model for refuse trucks and the Authority’s

specific parameters that have been identified.

TABLE 1 - AUTHORITY SPECIFIC FLEET TYPE INFORMATION

Default Value

Authority Specific Value

Fleet Type Average Vehicle Miles Traveled (VMT) 25,000 32,000

Fuel Economy of Diesel Refuse Truck (MPG) 2.8 3.7 Fuel Economy of CNG Refuse Trucks (MPG-DGE) 2.51 3.33

Incremental cost of a CNG refuse truck $30,295 $32,370 Useful Life of a refuse truck (yrs.) 12 12

All default input parameters, with the exception of useful life, were updated within the model to reflect

Authority specific values.

Number of Vehicles

Fifteen vehicles were specified within the study and this number was verified with the Authority. Annual

tonnage transported from each transfer station was reviewed, based on recent annual reports and checked

versus the number of trucks modeled. The specified number of vehicles was found to be accurate and

representative of the required fleet. A second scenario was modeled utilizing the additional five trucks

that would be required if the GCW was reduced from the current average to 80,000 lbs. to accommodate

the current available Cummins ISX12 G engine’s maximum load ratings.

Required Rate of Return or Discount

The default rate of the model is 6.00% based on an upper limit for a key municipal bond index since 1997

(WM Financial 2009). Recent municipal bonding by the Authority (2011 Series Bonds) was reviewed

and the Authority was found to have a favorable bond rating of A+ and a stable outlook with Standard &

Poor’s. Based on the positive financial history of the Authority and the integrated solid waste

management system operated for several years, we have estimated the rate of return or discount at 4.50 %

for this project.

2-4

Federal Vehicle Tax Incentive:

The federal vehicle tax incentive was set to 0% because it expired on December 31, 2010.

Realized Federal Vehicle Incentive

The Alternative Motor Vehicle Credit provided a tax credit equal to 80% of the incremental cost of a

CNG vehicle, to a maximum of $32,000 per vehicle. This incentive expired on December 31, 2010.

The post incentive incremental cost of $32,370 was utilized based on the detailed cost provided by the

local manufacturer currently providing trucks to the hauling Contractor, with no incentive applied.

CNG Vehicle & Diesel Vehicle Maintenance Costs

The Contractor currently completing the haul was surveyed and the default maintenance cost of $0.52 per

mile was found to be accurate and representative of current costs as well as the projected maintenance

costs for CNG powered vehicles, excluding labor costs for either type. The Contractor indicated that,

while annual mileage for the units was lower than average for a regional hauling operation, the annual

maintenance of tires and other wear items was higher than typical based on the conditions of the

offloading area at the landfill and the winter weather conditions experienced.

Price of CNG

A local CNG fuel provider was contacted (Clean Energy) and a potential price of CNG was provided to

the Authority for the NYSDOT station option. This pricing reflected a volume discount based on the

anticipated usage of between 10,000 and 20,000 gasoline gallon equivalents (GGEs) per month and

equaled $2.416 per GGE. Current retail pricing at Clean Energy’s Utica facility on July 18, 2013,

including taxes was identified as $2.699 per GGE. The unit price of $2.416 per GGE was utilized within

the model based on current local pricing provided at the anticipated volume to be utilized by the

Authority at this location.

Within the other two options the current natural gas pricing that the Authority is receiving from the utility

was utilized. This pricing includes all supply and operational and maintenance costs that the Authority

2-5

would incur for purchasing the fuel directly from the utility. This price was calculated at approximately

$1.06 / DGE or $1.16 / GGE. This cost is approximately 42% of the cost of fuel that was provided by

Clean Energy for the NYSDOT station option.

The default annual CNG price increase of 2.8% was utilized based on Energy Information

Administration's 2012 Early Release Annual Energy Outlook.

Price of Diesel Fuel

The Authority currently purchases diesel fuel based on pricing provided by the New York State Office of

General Services procurement program. The fleet operates on ultra-low sulfur #2 diesel that is procured

within the Oneida region. Based on information provided by the Authority, the purchase price of diesel

fuel on August 12, 2013 was $3.187 per gallon. This Authority price was approximately 19 % lower than

the model default diesel fuel price of $3.93 per gallon and was utilized within the model. No diesel

excise tax exemption was included within the model based on the Authority’s tax exempt status and the

CNG pricing utilized.

The default annual diesel fuel price increase of 3.5 % was utilized based on Energy Information

Administration's 2012 Early Release Annual Energy Outlook.

Monthly Diesel and CNG Usage

The monthly diesel fuel usage was calculated at 10,833 gallons based on an annual volume of 130,000

gallons provided by the Authority. The monthly CNG usage was calculated at 11,971 DGEs per month

based on a loss of 10.5% efficiency in utilizing a CNG powered vehicle versus a diesel powered vehicle.

Within the alternate fleet scenario of utilizing twenty CNG powered trucks versus the current fifteen, the

CNG usage was increased accordingly by 33% to a monthly total of 15,961 DGEs. This was calculated

based on the assumption that fuel consumption would remain constant within all trucks. This assumption

resulted from discussions with the current fleet operators and local manufacturers which indicated that the

slight reduction in payload would result in minimal change within the average fuel mileage of the fleet as

a large portion of haul is unloaded and would not change.

2-6

DGE / GGE Conversion Factor

The default value of .904 DGE per GGE was evaluated and adjusted. Based on a conversion factor of 1

GGE to125 cubic feet of natural gas and 1 DGE to 137 cubic feet of natural gas (NYSERDA Guidebook

for Refuse Fleets in New York) the conversion factor for the Authority’s model was calculated at .912

DGE / GGE and utilized within the model.

2-7

Station Costs

The station costs within the model calculator were checked based on the opinion of probable construction

costs developed and also with preliminary cost estimates provided by a third party developer. These costs

were then compared to the costs generated within the model and were within 5% variation. Based on this

consistency of the projected construction costs, the conceptual nature of the current designs and recent

pricing received on other similar municipal projects, the modeled cost of $1,430,092 for the station was

utilized. Assumptions used within the calculator for this specific hauling operation include a 10% spare

capacity ratio of the fleet, the use of electric compressors and installation costs equal to 50% of the

equipment costs.

Electrical costs are the primary operational costs for the station, based on the required compressor’s

operation to pressurize the inlet gas from the utility at approximately 100 psig to a storage pressure of

approximately 5,500 psig. Recent electrical bills for the Authority were reviewed and costs during May

of 2013were found to be $0.11 per kWh at the Utica station. The model utilizes an electrical rate of $0.10

per kWh and was found to be acceptable due to the off demand time period when the trucks will be

fueling versus the current first shift operation of the transfer station.

The model defaults that the station will be salvaged at the end of the useful life of the vehicles at a rate of

20%. Similar projects in the Syracuse area (DPW upgrade project) have also identified that this type of

equipment does retain significant value based on the specialty nature of it and therefore, the default

salvage value of 20% in 12 years was utilized.

As an alternate scenario, no station infrastructure costs were modeled, as would be the case if the existing

NYS DOT facility was utilized.

Garage Costs

Maintenance on CNG vehicles requires a slightly more complex maintenance facility than typical heavy

duty trucks, due to the compressed gas stored on the vehicles. Stringent building codes must be followed

for these facilities and the model estimates that either additional ventilation or a new facility must be

constructed at a total cost of $96,250 for this haul ($6,416 per truck). This default estimate was reviewed

versus recent costs that a similar CNG refuse fleet operator (Casella Waste Services) had experienced and

2-8

was found to be accurate for the retrofit of an existing maintenance facility. If a new standalone facility is

constructed, the garage costs are currently estimated to be between $200 and $250 per square foot,

depending on the level of interior finish and scale of the facility. Retrofitting an existing maintenance

facility at the cost of $6,416 per truck was utilized in the model.

Other Taxes and Incentives

Other incentives are available from the federal government to reduce the overall cost of installing a CNG

fueling system. The incentives are typically through tax credits that have been crafted so that tax-exempt

entities, such as the Authority can pass the credits to the suppliers and take advantage of overall savings.

On January 1, 2013 the Alternative Fuel Infrastructure Tax Credit was extended to reimburse 30% of the

cost of installing a CNG station, up to $30,000. This incentive has been included within the model along

with an additional NYS tax credit of $5,000.

VICE –Model Results:

Utilizing the Authority specific parameters outlined, the updated VICE models of the different fueling

locations and truck scenarios are included in Appendix D. The cash flow payback has been calculated

to be in the range of 6.6 to over 12 years within the model based on the various scenarios modeled.

If the current fleet of fifteen trucks is utilized and a new station is constructed at the Recycling Center in

Utica, the payback is estimated at approximately 12 years. If the fleet is increased to twenty trucks to

accommodate a GCW of 80,000 lbs. and a new station is constructed, the payback estimated increases to

more than 12 years and is beyond the useful life of the equipment. If the existing NYSDOT facility is

utilized with a fleet of fifteen trucks, the payback is estimated at approximately 6.6 years, as minimal

infrastructure costs will be incurred by the Authority.

2-9

TASK 2 – EVALUATE TRUCK BRANDS/TYPES AVAILABLE

Three local truck manufacturers were queried regarding the potential for providing CNG powered

vehicles for this haul. These dealerships were Utica General Peterbilt, Mohawk Valley Freightliner and

Utica Mack. All dealerships were chosen based on their proximity to the Authority’s operations and

familiarity with the fleet operated by the Authority’s Contractor. None of the dealerships surveyed had

sold any similar over the road Class 8 CNG powered vehicles from the local dealership.

Two of the brands (Freightliner and Peterbilt) indicated that trucks are currently available in the day cab

tractor configuration; however only one CNG engine was available is this style of truck. Mack indicated

that prototypes were currently available in this configuration; however, no formal pricing or delivery

dates were available form the factory at this time.

The CNG engine currently available is the Cummins Westport ISX12 G Heavy Duty Natural gas truck

engine. The ISX12G is based on a similar 11.9 liter diesel counterpart and is rated from 320 horsepower

(hp) to 400 hp with a peak torque of 1450 lb-ft. The engine meets current US Environmental Protection

Agency (EPA) and California Air Resource Board (CARB) emission standards and 2014 EPA greenhouse

gas (GHG) and us Department of Transportation (DOT) fuel economy regulations.

Engineers at Cummins’ were interviewed and a technical evaluation of this engine was completed. Two

major drawbacks were identified within the ISX12 G engine for this specific application based on

Cummins Application Engineering Bulletin 140.26 that provided guidelines for EPA 2007 and later

Automotive Gas Engines.

The first and major drawback identified is the GCW for the ISX12 G engine which is 80,000 lbs. GCW

above this weight is not recommended or warrantied by the manufacturer. Engineers indicated that

operating an ISX 12 G engines above 80,000 lb GCW could lead to poor performance and reduced the

reliability and durability of this product.

Currently the hauling operation averages are at a 15% higher GCW (92,300 lbs.) and are permitted to a

maximum gross weight of above 100,000 lbs. Reducing the maximum load weights to 80,000 would

increase the required number of trucks for the haul beyond the current fifteen by approximately 33% to a

minimum fleet size of twenty trucks.

2-10

The second drawback of the engine is the required high startability index required for this hauling

operation. Over the majority of the loaded section of the hauling route, long inclined grades and steeply

graded sections are present. Additionally, off- road conditions and soft surfaces are often encountered

while unloading at the regional landfill, adding increased rolling resistance to the truck operation. As a

result, the high startability index encountered with the hauling routes in questions will require an engine

torque rating in excess of the manufacturer’s current offerings of a peak of 1450 ft-lbs at the current haul

weights.

Cummins-Westport has indicated that they will be launching the ISX 15 G engine in 2016 delivering at

least a rated capacity of 450 hp with a peak torque of 1750 lb-ft designed to haul loads above 80,000 lb

GCW. Based on the current contract renewal date of October 2016, this engine may be a possibility for

implementation in the next hauling contract and should be investigated further as the development is

progressed. At this time, it is recommended that the Authority not pursue a full fleet conversion utilizing

the currently available Cummins-Westport ISX 12 G until the larger Cummins –Westport ISX 15 G

engine is released during 2016 for this specific hauling application.

An alternative CNG option that could be considered for this haul would be the conversion of the current

15 Liter diesel class engines to a dual fuel arrangement. With this configuration, the engines could

supplement the diesel fuel with CNG or be run entirely on diesel, if required. One local dealership

(Mohawk Valley Freightliner) indicated a strong preference for this arrangement, based on the ability to

start and warm up the engines on diesel fuel during the harsh winter months, while also providing a

contingency fuel source, if CNG difficulties were experienced. These operational benefits were believed

to outweigh the reductions in financial benefits, in the opinion of the dealer.

It should be noted that during initial developments with CNG fueling systems, other refuse fleets (Casella

Waste – NYS SWANA CNG Conference 2013) have indicated that the dual fuel engine arrangements

have been utilized and often led to increased maintenance costs over factory dedicated CNG engines.

Casella has also indicated that the initial costs of the dual fuel option was approximately the same as a

dedicated CNG engine, but these engines required specialized technician training and fuel management

software to perform any type of maintenance or troubleshooting on the system. This has also been

experienced with CNG/gasoline dual fueled engines (City of Syracuse DPW). Consequently, most fleet

vehicle owners are only utilizing dedicated CNG engines in their vehicle fleets, unless an extended haul

mileage would warrant the use of a dual fuel system.

2-11

Based on the reduced diesel offset that a dual fuel arrangement would have for this specific application,

the relatively short daily haul distances and reported experience of other fleets within the region, no

alternate scenarios utilizing a dual-fuel engine arrangement were modeled.

TASK 3 – EVALUATE CNG FUELING FACILITY LOCATIONS

Field Findings

Three potential CNG fueling locations were evaluated as part of this study. The first location investigated

was the Authority’s Recycling Center in Utica. The second location identified was an upgrade of the

current New York State Department of Transportation (NYS DOT) fueling facility operated along

Genesee Street in Utica, just south of the NYS Thruway and canal, and the third location was at the

Regional Landfill in Ava.

B&L conducted field inspections of each and also reviewed available mapping for each site. A summary

of the information gathered on each site is a follows:

Authority’s Recycling Center in Utica

The facility is located at the end of Leland Avenue in Utica and is currently served with natural

gas. Authority staff noted that with the recent conversion to a single stream processing system

for recyclable materials, natural gas usage has decreased significantly and the electrical service

capacity for the facility was increased.

A large number of municipal and private haulers utilize the site in packer type vehicles depositing

solid waste, recyclable materials and green waste.

An existing parking area directly east of the Recycling Facility and west of the composting area

could be utilized for time filling of at least 15 units, with minimal site work.

Sufficient area for heavy truck traffic turning and filling is available within the site.

2-12

Access to the site could be secured for time filling operations. Public access to a fueling facility

on the northern section of the site would be preferred based on potential congestion with other

heavy truck traffic.

Current Authority owned property could be utilized and no additional property would need to be

purchased for the installation of the facility.

Adequate setbacks from property boundaries the adjacent railroad lines were available.

The exiting remote scale, utilized primarily for outbound recyclable materials would need to be

relocated.

Several other potential fleets were identified within the general area, such as the City of Utica,

Department of Public Works garage and the Centro bus facility.

NYSDOT CNG Fueling Facility

The facility is located adjacent to Genesee Street in Utica just south of the NYS Thruway and

canal and is currently a CNG fueling facility operated by Clean Energy.

Clean Energy indicated that the current compressors and system would require an upgrade if

utilized by the Authority and that natural gas capacity would be available for the fueling of the

Authority’s potential fleet.

A large number of NYSDOT trucks were present at the site due to the location of the shop

complex directly west of the fueling facility. Traffic from Genesee Street into the complex at the

time of the inspection was minimal. Approximately twelve passenger vehicles were parked in the

adjacent lot east of the fueling facility.

The existing system appeared to be dated and designed to service light duty CNG vehicles and

cars.

An existing diesel fueling system directly north of the CNG fueling facility would need to be

reconfigured to accommodate increased traffic patterns to the CNG location if the current

arrangement is utilized.

Access to the site could not be secured for time filling operations by the Authority without

utilizing space currently under operation by the NYSDOT.

2-13

The current facility is on property owned by others and operated by a third party. The operator

indicated that a fueling arrangement for the Authority could be secured at the location.

Authority’s Regional Landfill in Ava

The facility is located south of NYS Route 294 in Ava and is not currently served with natural

gas. The closet natural gas service is approximately three miles east of the site on NYS Route

294.

All of the waste transfer haulers are present at the site and a small number of local haulers in

packer style trucks are present.

An existing parking area directly south of the Maintenance Facility adjacent to the current diesel

fueling system area could be utilized for time filling trucks. Based on the minimal amount of

available area outside of the permitted lined landfill area, any time filling locations at the site

would be within areas of future landfill development, south of the current operations.

Sufficient area for heavy truck traffic turning and filling is available within the site.

Access to the site could be secured for time filling operations. Public access to a fueling facility

at the site would not be feasible.

Current Authority owned property could be utilized and no additional property would need to be

purchased for the installation of the fueling facility.

The only other potential fleet identified within the general area was the local school district bus

fleet.

Analysis

A conceptual site plan was developed for each site that includes a general arrangement of the facility,

necessary utilities and proposed traffic routes. All three conceptual site plans are included within

Appendix C.

2-14

Recommendation

Based on the review of the three locations considered, the recommended location for the potential

construction of a CNG fleet fueling facility would be the Recycling Center in Utica. As primary factors,

this location provides the necessary space for time filling, future system expandability and optimum

operational activity. The existing CNG fueling facility at the NYSDOT site could provide the shortest

payback to the Authority, but the limited space and access to the site would restrict the future

expandability and operations, and is therefore not recommended.

Although no natural gas service is currently at the Regional Landfill, it should be noted that this facility

has the future potential for biogas transportation fuel development based on the methane that is being

collected at the facility. Several other sites within New York are currently investigating this potential

renewable fuel source that could be utilized within the current CNG engines that are being manufactured.

Commercially available gas cleaning and compression units at a similar scale have been successfully

utilized in other regions of the Country at this time and should be investigated in detail, if this option is

utilized.

2-15

TASK 4 – EVAULATE FINNANCIAL CONSIDERATIONS AND COSTS

To further evaluate the potential CNG fleet fueling arrangement, additional financial and operational

scenarios were investigated. The first financial consideration investigated was a comparison of a CNG

developer acting as an installer-owner-operator of the proposed facility versus an Authority operated

system. To facilitate this investigation, one private and two municipal CNG facility operators (Casella

Waste, CENTRO and Monroe County) were surveyed on the operational considerations for this type of

fueling system. All of the parties indicated that the system could technically be operated by the

Authority; however, all of the required operational maintenance on the compressor skid will need to be

performed by a specialized contractor.

There were two primary factors that led each of them to this decision. The first is the essential need to

perform the maintenance on the CNG systems in a very timely manner since the fleets have to be

operational each and every day. The second factor is that the working pressures of the equipment and

piping are well above the typical pressures that their staffs were trained in or have equipment to work

within. This creates a worker training, safety and liability issues that are all avoided by utilizing out-

sourced services for the maintenance of the CNG systems.

Operational costs are also a major consideration in the installation of the CNG systems. Based on

discussions with existing system owner/operators, the average operating costs for similar facilities were

estimated at approximately $0.30 to $0.40 per DGE. This is important since it represents a higher

operational cost than most conventional diesel based fleet fueling systems. As such, these costs must be

considered in the overall DGE cost to develop a realistic comparison to the operation of a standard diesel

based fueling system.

Insurance costs were also investigated for this type of facility. Similar facilities in the region were

surveyed and found to have a minimal insurance cost increase from a similar diesel fueling system.

Based on the proposed locations and extensive infrastructure the Authority currently operates at each site,

the overall annual insurance costs of the facility upgrade will be minimal. If the entire CNG fleet is

Authority owned, insurance of the tractors and rolling stock should be further investigated. Several

variables such as average driver experience and driving records could significantly factor into the overall

cost for insurance of the fleet.

2-16

The financing of the non-incremental costs for the fueling system were reviewed along with the potential

of financing of the entire fleet. With the Authority financing only the infrastructure portion of the

conversion, the annual debt service was estimated to be approximately $240,000 including contingencies.

If the trucking fleet and new trailers were also financed by the Authority the estimated annual debt service

is would increase to between $650,000 and $800,000 annually, depending on the total number of hauling

units included.

A financial sensitivity analysis was conducted regarding the potential for the Authority to dispense CNG

to outside vehicles at various monthly rates. The analysis estimated total revenue of $0.50 per DGE to the

Authority at rates of 5,000, 10,000 and 20,000 DGEs per month of outside sales. At 5,000 DGEs per

month the payback was reduced from slightly beyond 12 years to 11 years. At 10, 000 and 20,000 DGEs

per month the payback was reduced to 9 years and 8 years, respectively.

TASK 5 – IDENTIFY FUNDING AND GRANT OPPORTUNITIES

A number of funding sources are available through programs administered by both federal and state

agencies. These fall into three general categories; funding for infrastructure, funding for vehicle purchase

and/or retrofit, and tax credits. Some of these sources have been described generally below. It should be

noted that some funding is reserved for areas designated as “non-attainment” areas for pollutants by the

United States Environmental Protection Agency. These funding sources have not been included as

Oneida and Herkimer Counties do not fall under this designation. It should also be noted that restrictions

may allow for only one funding source to be used per project.

NYSERDA

The New York State Energy Research and Development Agency (NYSERDA) would be a potential

funding source for the proposed project. PON 2721 provides up to 75 percent funding for “innovative

community-based projects that reduce current greenhouse gas emissions, create more resilient, sustainable

communities, and position New York State to prepare for a cleaner future”. Although the application

deadlines for these PONs have already passed or are fast approaching, similar opportunities, as well as

others more specifically geared towards CNG infrastructure are anticipated to be offered in future years as

federal funds are available.

2-17

US Environmental Protection Agency

The US Environmental Protection Agency (EPA) National Clean Diesel Funding Assistance Program (as

part of the Diesel Emissions Reduction Act, or DERA) provides funding for up to 40% of the cost of

conversion of existing vehicles for alternative fuel use. The FY 2013 program has recently closed, but it

is possible that this funding will continue to be extended for future years.

New York State Department of Transportation

The New York State Department of Transportation (NYSDOT) offers funding for alternative fuel

vehicles (AFVs) through the Congestion Mitigation & Air Quality Improvement (CMAQ) program. This

program allows for funding of up to 80% of conversion of existing vehicles for alternative fuel use and is

targeted for only non-attainment areas and would not currently be applicable to this project.

Clean Cities Coalition

The Clean Cities Coalition was established by the US Department of Energy to support local actions to

reduce petroleum consumption in transportation. The coalition local to this project would be the Central

New York Coalition. While the coalition does not provide funding directly, they work closely with

entities interested in alternative fuel infrastructure and vehicles to assist in obtaining funding and forming

possible partnerships with other entities in the area interested in furthering alternative fuel options.

Alternative Fuel Excise Tax Credit

A tax incentive is available for qualifying alternative fuel that is sold for use or used as a fuel to operate a

motor vehicle. Qualifying fuels include: compressed natural gas, liquefied natural gas, liquefied

petroleum gas, P-Series fuel, liquid fuel derived from coal through the Fischer-Tropsch process, and

compressed or liquefied gas derived from biomass. A tax credit in the amount of $0.50 per gallon is

available. For an entity to be eligible to claim the credit they must be liable for reporting and paying the

federal excise tax on the sale or use of the fuel in a motor vehicle. Tax exempt entities such as state and

local governments that dispense qualified fuel from an on-site fueling station for use in vehicles qualify

2-18

for the incentive. This is taken as a credit against the entity's alternative fuel tax liability, with any excess

over this fuel tax liability claimed as a direct payment from the Internal Revenue Service. New York

State also offers a $5,000 tax credit for this type of project.

Funding opportunities can change from year to year, however the list above provides a starting point for

seeking out funding sources at a time when the details of the project are known.

Appendices