Pennsylvania Natural Gas Energy Development Program

Transcription

1 2014 Annual Report Pennsylvania Natural Gas Energy Development Program For more information, visit keyword: NGV Grant.

2 Executive Summary The Department of Environmental Protection (DEP) has prepared a Natural Gas Energy Development Program (NGEDP) Annual Report, as required by law, for submission to designated legislative committees. This report details continuing progress in implementing a natural gas grant program for heavy duty vehicle fleets in Pennsylvania using new and existing natural gas refueling structure. NGEDP is helping to create a sustainable market for a natural gas using the transportation sector in Pennsylvania. This report summarizes the activities of the NGEDP including the requirements of the grant solicitation and awards made during the reporting period. Overall, 49 applications were received, totaling $11,296,988 in grant requests. From these applications, 25 projects were selected in a competitive process and awarded a total of $7,721,388. i

3 Table of Content Introduction...Page 1 Program Overview...Page 1 FY Program Summary...Page 2 Act 13 NGEDP Natural Gas Fuel Usage Summary...Page 3 Awarded FY NGEDP Projects... Pages 3-6 ii

4 INTRODUCTION Chapter 27 of Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes establishes the Natural Gas Energy Development Program (NGEDP) to award grants to promote the use of domestic natural gas as vehicle fuel in Pennsylvania. Chapter 27 authorizes Department of Environmental Protection (DEP) to develop program guidelines and to distribute up to $20 million in grants from the Marcellus Legacy Fund over three years to help pay for the incremental purchase and conversion costs of natural gas vehicles. PROGRAM OVERVIEW DEP has a history of implementing competitive grant programs to deploy alternative fuel vehicles and technologies including natural gas. The Office of Pollution Prevention and Energy Assistance created and deployed the NGEDP to support a portion of the incremental cost for the purchase of natural gas vehicles. In addition, an outreach strategy was created to deliver regional education and assistance forums to insure consistent information about the program was available and to encourage widespread participation. The forums also included information on vehicle technologies, fueling technology strategies, methods for assessing natural gas opportunities and general guidelines for accessing NGEDP funds. DEP also maintains a Natural Gas Vehicle (NGV) website to help municipal and commercial fleet owners make informed decisions about converting fleets to natural gas. Key elements of the NGEDP program are as follows: Each project must propose to receive funding for five or more eligible vehicles. The vehicles utilizing incremental purchase or retrofit cost funding must be registered in Pennsylvania. Each grant will cover no more than 50 percent of the incremental purchase or retrofit cost of eligible vehicles. Grants will not provide more than $25,000 for each eligible vehicle. Eligible vehicles include purchased or retrofitted new and used vehicles. Grantees would not receive incremental costs for a vehicle purchased or retrofitted prior to the award date of the grant. Grant funds awarded under this program cannot be used in place of available federal funds. A grant funded project must be completed within the grant period of performance, which is 18 months from the award announcement. The following entities are eligible to apply: A commonwealth authority; A municipal authority; The Pennsylvania Turnpike Commission; A local transportation organization (LTO), which includes the following: o A political subdivision; o A public transportation authority, port authority or redevelopment authority, which is organized under the laws of the commonwealth or an interstate compact, or is empowered to render, contract to render or assist in rendering transportation services in a limited area in the state even though it may also render or assist in rendering transportation service in adjacent states; o An incorporated nonprofit entity which directly or indirectly provides public transportation service; or, o An incorporated nonprofit entity of public transportation providers operating within the state

5 An incorporated nonprofit entity; A state-owned or state-related university; A for-profit company. FY PROGRAM SUMMARY On Nov. 2, 2013, approximately $11.1 million was made available for competitive grant applications to support incremental cost share of the purchase of heavy duty vehicles (over 14,000 lb. gross vehicle weight rating) using compressed natural gas (CNG) and liquefied natural gas (LNG). The amount offered included $7.5 million as required by Act 13 for FY , plus approximately $3.6 million unspent from FY Of that amount, $11.1 million, 50 percent was allocated exclusively for local transportation organizations, as required by Act 13. There were 49 applications submitted by Jan. 10, 2014, totaling $11,296,988 in grant requests. $1,648,478 was requested by Local Transportation Organizations $10,648,510 was requested by Non Local Transportation Organizations There were 25 projects competitively selected resulting in a total award of $7,721,388. $987,867 was awarded to Local Transportation Organizations (Six Projects) $6,733,521 1 was awarded to Non Local Transportation Organizations (21 Projects) 12 applicants did not receive an award o 11 applications were determined to be ineligible to receive an award o One applicant was declined due to significant and ongoing violations and penalties for environmental non-compliance The 25 awarded projects are expected to result in: 384 heavy duty trucks using natural gas fuel o 359 Compressed Natural Gas (CNG) vehicles o 25 Liquefied Natural Gas (LNG) vehicles 4.86 million gasoline gallon equivalents (gge) of natural gas fuel annually to displace petroleum fuel 2 13 new natural gas fueling stations built in Pennsylvania (12 CNG & 1 LNG) o Eight with full public access, three with limited/restricted public access, two with private access only Support of 12 existing stations in PA (11 CNG & 1 LNG) o Four with full public access, three with limited/restricted public access, four private access only Since there were not a significant number of requests from local transportation organizations and there were a high number of ineligible projects, the project fiscal year ended with a $3.38 million balance. Unused funding from the FY round will be made available in the FY round for new competitive applications. This amount, plus any funding returned by grantees from Round 1 or Round 2, will be added to the $2.5 million identified in Act 13 to be made available for Round 3. As a result, Round 3 for FY is anticipated to have approximately $6.5 million available. As described in Chapter 27, Round 3 will not have a 1 Note that Non Local Transportation Organization awards total an amount greater than the 50% allocated for FY for that type of applicant. Excess funds remained after all eligible LTO projects were awarded. A portion of the remaining excess funds were subsequently awarded to unfunded non-lto applicants whose projects met all other eligibility criteria. 2 Estimated gasoline gallon equivalents: Applicants are responsible for determining/calculating and reporting gasoline gallon equivalents (GGE). To convert Diesel Gallon Equivalent (DGE) to GGE, a multiplier of 1.12 GGE per DGE was used. For example, if a vehicle has an estimated usage of 5,000 DGE per year, the applicant would multiply that number by 1.12 GGE per DGE for an estimated usage of 5,600 GGE. This is based on the assumption of 1 GGE = 114,500 Btu and 1 DGE = 128,000 Btu

6 separate allocation for Local Transportation organizations. Instead, all available funds will be competitively open to all eligible applicants. Act 13 NGEDP Natural Gas Fuel Usage Summary The NGVs funded under Round 1 and Round 2 are, collectively, calculated to consume an estimated 8.6 million Gasoline Gallon Equivalents (GGE) per year of natural gas 3. Once fully deployed, that will represent a displacement of 7.2 million gallons of diesel fuel. Since follow-up annual fuel reporting requirements have not yet begun for grantees, there is little actual performance data available to report at this time. However, it is possible to estimate total natural gas fuel consumption under this program based on vehicle-specific calculations for the NGVs that have been completed thus far. To date, 55 NGVs out of the 704 awarded have been purchased, registered and deployed in Pennsylvania. These 55 vehicles are estimated to have a current natural gas fuel consumption rate of approximately 510,000 GGE per year. This number is expected to grow substantially as the CNG fueling infrastructure needed to support the Act 13 projects becomes fully available, and as pace of vehicle deployments increases with improved availability of EPA-compliant engines and conversion systems. It is worthwhile to note that four of the grantees that were awarded Act 13 funds in Round 1 (FY 2012/13) have since decided to postpone moving forward with their NGV plans, and have forfeited their grant awards. Those four grantees collectively represent 46 out of the 704 awarded NGVs and approximately 550,000 GGE of natural gas usage. The funds awarded to those four projects are being made available to other applicants in the third round of grant awards. AWARDED FY NGEDP PROJECTS Penske Truck Leasing Co., L.P. $499,997 Penske Truck Leasing (PTL) will purchase and deploy 23 heavy-duty CNG vehicles in Schuylkill County. PTL will lease the vehicles to its customers (National Freight Inc., Wegman s and Penske Logistics) operating from the Highridge Business Park in Schuylkill and throughout the state. In conjunction with this project, Trillium CNG will construct a brand new CNG station along I-81 in Schuylkill County. Greater Philadelphia Clean Cities $500,000 The Keystone State LNG Conversion Initiative seeks to help fleets convert to LNG for long haul applications. The project will utilize a centralized location near the convergence of three interstate highways to help construct a public LNG refueling site anchored by a fleet of 20 Class 8 tractors. This project will help stimulate the use of LNG as an alternative to gasoline and diesel for long haul applications. Hogan Transports, Inc. $500,000 Hogan Transports, Inc. will purchase 20 heavy-duty CNG trucks that will fuel primarily at a new Clean Energy public access CNG station in New Oxford, York County. The deployment of 20 CNG trucks is expected to save the Hogan Transports fleet operators over $786,281 a year, and a total of $8,955,373 in reduced fuel costs at the end of their ten-year operational cycle. Clinton County Solid Waste Authority $291,974 The Clinton County Solid Waste Authority (CCSWA), owner and operator of the Wayne Township Landfill, recently completed construction of a publicly available CNG fuel station, and have committed to utilize 3 To help put these natural gas usage numbers into perspective, 8.6 million GGE of compressed natural gas is equal to approximately 1.1 billion cubic feet (bcf) of natural gas at an assumed volume of 126 cubic feet per GGE. Natural gas is currently produced at a rate of about 9 bcf per day in PA

7 natural gas fuel in their daily operations. CCSWA has partnered with three other local entities to purchase a total of 14 heavy-duty CNG trucks. Giant Eagle, Inc. $300,000 Giant Eagle will invest $3.1 million into the purchase of 20 Freightliner Volvo CNG fleet vehicles running 100 percent on CNG. The vehicles will utilize an existing CNG fueling station that Giant Eagle maintains at its Pittsburgh Distribution Facility. The vehicles will operate primarily in EPA ozone nonattainment areas of Southwestern Pennsylvania. Giant Eagle is a leader in CNG development in PA with two public CNG fuel stations and, upon completion of this project, a fleet of 40 dedicated heavy-duty CNG trucks. Neapolitan Express, LLC $250,000 Neapolitan Express will use Act 13 grant funds to offset the incremental cost of 20 CNG food trucks in Philadelphia. The CNG trucks will use an estimated 330,000 GGE of CNG a year and will fuel at the new Clean Energy Lehigh Gas North East public access CNG station in Philadelphia. They will be the first CNG mobile food trucks in Pennsylvania. O Ring CNG Fuel Systems, Inc. $498,229 "O" Ring CNG Fuel Systems has teamed up with HighStar Capital, Advanced Disposal and the Paris Companies for a CNG development project that will include the construction of a new, publicly available CNG fuel station along the I-80 corridor near DuBois, PA. The Act 13 grant will provide for a portion of the incremental purchase price of 20 new dedicated CNG refuse trucks, and the conversion of five trucks to dual fuel (CNG and diesel) technology. Beemac Trucking, LLC $500,000 Beemac will purchase 20 dedicated CNG powered class 8 tractors for local flatbed trucking transportation of freight for their local Pennsylvania customers. The vehicles will be fueled at a new CNG fueling station being constructed by Beemac. The station will be open to the public and will be available in Fall of PreFlight LLC $122,500 PreFlight Parking plans to use Act 13 grant funds to offset 50 percent of the incremental purchase price of 10 heavy-duty CNG-fueled shuttles. The total incremental cost of the CNG vehicles is $245,000. The CNG shuttles will use 140,000 GGE of CNG per year, and will fuel at the existing Clean Energy public access CNG station at the Philadelphia International Airport. Freight Equipment Leasing LLC $150,000 The Pitt Ohio Harmar Twp. CNG project will use Act 13 grant funds for a portion of the incremental cost to purchase six model year 2015 Mack CXU61 dedicated CNG tractors, which will be manufactured directly by the OEM with EPA and CARB compliant CNG packages. Based on historic fuel consumption data, these CNG tractors will use approximately 156,000 GGE of CNG annually to replace diesel fuel. The total incremental purchase costs of eligible vehicles related to CNG totals $582,642, with grant share totaling 26 percent of that amount. Advanced Disposal $472,115 Advanced Disposal is committed to converting their extensive fleet of 2,900 waste hauling vehicles to 100 percent CNG vehicles, starting with 20 vehicles in Norristown, Pennsylvania. Advanced Disposal has completed several CNG conversion projects in other states with success and is ready to convert the Pennsylvania fleet. With the assistance of DEP Natural Gas Vehicle Program, Advanced Disposal will be able - 4 -

8 to increase the number of conversions in the first phase of this project. The 20 trucks funded under this grant are expected to consume 250,000 GGE of natural gas per year. Waste Management of PA $300,000 Waste Management seeks to deploy 20 new heavy duty CNG solid waste collection vehicles to their Erie (seven vehicles) and Washington (13 vehicles) locations and install limited third party access CNG fueling to their Erie location. The Washington vehicles will fuel at Waste Management s existing public station. The project will use about 190,000 GGEs of natural gas in the first year of the project. The total incremental cost of the vehicle purchases is $849,338. Kane Freight Lines, Inc. $250,000 Kane Freight Lines, Inc. (Kane is Able) will use Act 13 grant funds to offset 45 percent of the incremental cost of 10 CNG heavy duty trucks in Pennsylvania. The 10 CNG trucks will use approximately 138,000 GGE of CNG per year, and will fuel at the existing Kane Freight Lines CNG station at the Procter and Gamble facility in Tunkhannock. Lancaster County Solid Waste Management Authority $125,000 LCSWMA, in partnership with the City of Lancaster and Goods Disposal Service, will expand the use of clean, domestic CNG in south-central Pennsylvania through the collective purchase/retrofit of 10 new heavy-duty CNG vehicles. The vehicles funded under this project will utilize a newly constructed CNG fuel station owned and operated by LCSWMA. The vehicles will consume an estimated 125,000 GGE of natural gas fuel annually. Schneider Resources, Inc. $150,000 Schneider Resources, Inc. will use Act 13 grant funds to offset 33 percent of the incremental cost of six CNG heavy-duty trucks. The six CNG trucks will use approximately 73,000 GGE of CNG per year, and will fuel at the future Clean Energy CNG station in Pittston. Giant Food Stores, Inc. $125,000 Giant Food Stores will use Act 13 funds to offset 38 percent of the incremental purchase price of five LNG heavy-duty trucks for use across Pennsylvania. The LNG trucks will use 60,000 DGE of LNG per year, and will fuel at the existing Clean Energy Flying J public access LNG station in Carlisle. The trucks will be used to transport perishable grocery goods around the state. Greater Philadelphia Clean Cities $418,650 The Northeast Extension CNG Vehicle Conversion Initiative seeks to spur the acceptance of using CNG as a vehicle fuel by deploying 23 new dedicated CNG trucks that will utilize a new fuel station built by Lehigh Gas. The two project partners, Pennsylvania American Water Co. and the PA Turnpike Commission, will collectively displace petroleum fuel by using an estimated 100,000 GGE of natural gas annually. Constructural Dynamics, Inc. $500,000 Constructural Dynamics, Inc. (Silvi Concrete) received Act 13 funding in the amount of $500,000 to offset 50 percent of the incremental cost of 20 dedicated CNG concrete mixer trucks. The 20 CNG trucks will use 160,000 GGE of CNG peryear (8,000 GGE/truck), and will fuel at the new Silvi Concrete CNG station at their fleet base in Fairless Hills

9 Burgmeier s Hauling, Inc. $138,955 Burgmeier's Hauling Inc. will use Act 13 funds to offset 50 percent of the incremental cost of 6 heavy-duty CNG refuse trucks. The six trucks are expected to use about 87,000 GGE of CNG per year while operating in Blair, Cambria, and Centre Counties. L.T. Verrastro, Inc. $416,110 LT Verrastro will purchase 20 New Peterbilt Trucks with dedicated CNG engines as part of an enterprise wide effort to transition their sales and delivery fleet to Natural Gas fuel. The trucks will use approximately 120,000 GGE per year of natural gas to displace diesel fuel. Mid Mon Valley Transit Authority $125,000 The Mid Mon Valley Transit Authority will procure five dedicated CNG-powered buses for use on commuter bus routes to and from the Middle Monongahela River Valley and Downtown Pittsburgh. The new buses will replace aging diesel buses that have outlived their useful life. The buses are expected to consume about 70,000 GGE per year of natural gas. Centre County Commissioners $165,872 Centre County is teaming up with Centre Area Transit Authority (CATA), State College Borough, and PSU who will collectively use Act 13 funds for the purchase of 10 natural gas vehicles. The NGVs will include para transit buses, full size buses, shuttle buses and a refuse truck. The vehicles will fuel at CATA s existing CNG station. The project is expected result in the use of 53,000 GGE per year of CNG and will support the construction of a new fuel station in the State College area. Butler Area School District $300,000 Butler School District s transportation contractor, Valley Lines, Inc. will use the Act 13 grant funds to replace 30 gasoline and diesel fueled school buses with new buses that will run 100 percent on CNG. Valley Lines will purchase 30 Thomas Minotour school buses with 100 percent dedicated 6.0 CNG engines, and they will be fueled at the bus company s existing onsite fueling facility. The project is expected to save Butler Area School District approximately $90,000 per year in reduced fuel costs. Rose Tree Media School District $300,000 Rose Tree Media School District will use Act 13 grant funds to offset the incremental purchase of 12 new dedicated CNG buses. This is the second phase of the District s CNG conversion project. The first phase included the purchase or conversion of 23 buses and the installation of an onsite fueling station with both time-fill and fast-fill capabilities. Rose Tree Media plans to eventually run its entire 74 bus fleet on natural gas. The 12 buses purchased under this grant award are expected to displace diesel fuel with approximately 22,000 GGE of natural gas. Aqua Pennsylvania, Inc. $225,000 Aqua PA will use Act 13 grant funds to offset 37 percent of the incremental cost of nine heavy duty NGVs that will operate in Delaware, Chester and Montgomery counties. The nine CNG trucks will use about 17,000 GGE of CNG per year, and they will fuel primarily at their own onsite time-fill fuel station and also at existing PECO/Clean Energy CNG fuel stations throughout southeastern Pennsylvania

10 Commonwealth of Pennsylvania Office of Policy An Equal Opportunity Employer 0120-RE-DEP /2014 G1627-OCT14