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HomeMy WebLinkAboutAgenda - 06-02-2004-7bORANGE COUNTY BOARD OF COUNTY COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 2, 2004 Action Agen~ Item No. SUBJECT: Authorization to Submit Alternative Fuel Vehicle (AFV) Incentive Grant DEPARTMENT: Environment and Resource PUBLIC HEARING: (Y!N) No Conservation ATTACHMENT INFORMATION CONTACT: 1) AFV Incentives Grant Guidelines David Stancil, 245-2590 2) May 12 Statement of Interest TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To authorize staff to submit a grant application in the amount of $25,000 to the Triangle Clean Cities Coalition Alternative Fuel Vehicle (AFV) Incentives. BACKGROUND: The Triangle Clean Cities Coalition, administered by Triangle J Council of Governments, has received federal EPA grant funds to assist in the acquisition of infrastructure and AFV's in the Triangle, The maximum grant award for each jurisdiction or organization is $25,000. Emphasis is on new projects (and organizations which do not have substantial AFV infrastructure), Orange County has been considering means of acquiring AFV's and related infrastructure for aver four years. The Alternative Fuel and Law Emission Vehicle report of April 2000 suggested the purchase of Compressed Natural Gas (CNG) and one electric vehicle, and CNG fueling station, as a pilot project, A grant was submitted to a State grant program for this initiative, but the State budget crisis and other factors negated this option, In the last five years, the County has purchased several vehicles that are ethanol-capable, but all County vehicles currently run on gasoline or diesel (with the exception of Solid Waste road vehicles, which use biodiesel at the Town of Chapel Hill refueling facility). Prior to the deadline for submittal, on May 12, the Ccunty submitted a Statement of Interest in this grant program, in consultation with the Chair and the Manager. This Statement of Interest, which is a prelude to the grant application, identified three potential projects for funding assistance (attached). Two focus on infrastructure for the future purchase of CNG vehicles and the conversion of some diesel vehicles to biodiesel. Project #1, a joint initiative with NCDOT and the Town of Hillsborough, does not appear feasible at this time based on a recent meeting with NCDOT officials. However, potential far aHillsborough-area joint reft~eling facility with the Orange County Schocls has emerged as a possible alternative. The other options are AFV fueling infrastructure at Orange County Public Works, or funding far the cost differential on the purchase of vehicles (without infrastructure to support fueling - there is a CNG station at the Town of Chapel Hill -this option is less desirable), Staff proposes to amend option #1 to include potential facility with Orange County Schools and submit a grant offering both this and the Public Works fueling facility option, FINANCIAL IMPACT: The maximum grant award is $25,000, and the expected application would request this amount, The total cost of a CNG fueling station is expected to be $45- 52,000, Biodiesel could be accommodated with the addition of another tank and dispensing mechanism (around $8,000), Total cost, after the grant, is anticipated to range from $28,000-$35,000, Funding for this new initiative does not exist in the CIP RECOMMENDATION(S): The Manager recommends that the Board: ® Review and discuss the proposed project ® If desired, authorize staff to submit a grant application in the amount of $25,000; The Manager recommends that funding for the County's share of this initiative could come from the BOCC Contingency Fund, if desired. TRIANGLE J COUNCIL OF GOVERNMENTS AFV INCENTIVE PROJECT REQUEST FOR PROPOSALS & GRANT GUIDELINES Total funds available: $100,000. Maximum single award: $25,000. Deadline for submitting proposals: End of business Apri130, 2004. Initial awards will be announced by May 31, 2004. All funds must be expended by May 31, 2005, After an initial round of awards, applications will be considered based on the merits of the subsequent proposals and the availability of funding. TJCOG reserves the right to set aside program funds for later rounds of funding or to reach fuel diversity goals. Project Purpose The purpose of this project is to increase the use of alternative transportation fuels in Chatham, Durhanr, Franklin, Johnston, Lee, Moore, Orange, and Wake counties. Increasing the use of alternative fuels such as biodiesel (B20-B100), electricity, ethanol (E85), natural gas and propane will help efforts to diversify fuel supplies, support renewable energy initiatives and provide for cleaner air. Presently the U.S. transportation sector (on-road cars and trucks) is 97% reliant on petroleum gasoline and diesel fuel, with much of this fuel imported from other countries. Increasing the use of alternative fuels supports US energy security and economic development while reducing harmful emissions. Expanded use of alternative fuels is hampered by the increased costs associated with their use. Biofirels such as biodiesel and E85 are typically more expensive than petroleum diesel and gasoline but do not have additional costs associated with the vehicles in which they operate. Propane, electricity and natural gas, on the other hand, often cost less than gasoline and diesel but the vehicles in which these fuels operate cost more to purchase.. Furthermore, acquiring equipment to accommodate vehicle refueling can present a significant bazrier to fleet managers and fuel providers that are considering a switch to, or addition of, an alternative fuel option to their operations. Project Eligibility Triangle J Council of Governments (TJCOG), in cooperation with the Triangle Clean Cities Coalition, is issuing a request for proposals (RFP) from vehicle and fleet operators and fuel providers for projects that use alternative fuels as defined though the Energy Policy Act (EPAct). Any vehicle operator or fuel provider located in the above mentioned counties is eligible to apply, although priority will be placed on funding non-EPAct mandated fleets, such as local govenunent and private sector fleet and refueling operators. Projects can cover the incremental price of fuel, refueling related equipment and infrastructure, or vehicle purchases.. Vehicles must be original equipment manufacturer (OEM) alternative fuel vehicles (AFVs) or Enviromnental Protection Agency (EPA) certified conversions. Only on-road vehicles and transportation fiiel related projects are eligible for funding through this project. Funding for the AFV Incentive Project is provided tlu~ough the North Carolina Department of Administration State Energy Office. Eligible vehicle and fleet operators azrd fuel providers may apply for funding through this prograzn to offset a portion of the added cost incurred with alternative fuel use. Funding will be awarded based on criteria outlined below. Applicants must demonstrate a 50% minimum cost share contribution to the proposed projects. Cost share is the portion of the project cost that the applicant provides. No more than 50% of the cost of the eligible projects will be funded. Cost share percentage will be based on incremental cost or total project cost as outlined in the exaznples below. Applicants must state the total cost of their alternative fuel project along with their cost-share contribution and will be granted a specific, not-to-exceed amount of funding based on their proposal. Cost share contributions will be reviewed in a case by case manner. Both cash azrd in-kind contributions, such as existing infrastructure and administrative time, may be included as a cost share contribution. Cash contributions will be given more value over in- kind contributions unless in-kind contributions are supporting publicly available refueling sites. The following examples can serve as guidelines: o For the purchase of biodiesel and E85, the applicant must demonstrate a minimum of 50% of the cost difference, or incremental cost, between the alternative fuel azrd its conventional counterpart (diesel or gasoline). This cost share can be demonstrated though the achial cash contributed towards the incremental purchase price of the biofuel and/or by the value of the refueling infrastructure used to dispense the alternative fuel. Actual cash contributions offered towards the incremental costs of the proposed fuel will be valued higher than an in-kind contribution based on the value of refueling infrastructure unless refueling is publicly accessible. the applicant must clearly state and describe the value of cost share contribution in the application. o For the purchase of AFVs that have a conventional counterpart, applicants must demonstrate a minimum of a 50% cost share contribution towards the incremental cost.. For example the cost difference between a gasoline Honda Civic and a compressed natural gas (CNG) Civic is $4,500. Consequently, applicants are eligible to receive up to $2,250 to offset the costs of purchasing this vehicle and are expected to demonstrate at least $2,250 as a cost-share contribution, o For vehicles that have no conventional counterpart, up to 25% of the total purchase price is eligible for reimbursement ifthe AFV is purchased instead of a conventionally fueled vehicle.. For example, a low speed electric vehicle purchased for $12,000 instead of an on-road gasoline vehicle is eligible for up to $3,000 reimbursement. Consequently $9,000 can be demonstrated as a cost-share contribution. Applicants must explain how the proposed vehicle will be used in place of a conventional vehicle., o Existing vehicles that are being retrofitted must provide fora 50% minimum towazds the retrofit costs. For exaznple, if the cost ofretroftting an existing gasoline vehicle to operate on propane is $7,000, then $3,500 is eligible for reimbursement and a minimum of $.3,500 must be demonstrated as a cost-share contribution. The residual value of existing vehicles cazmot be used as cost share contributions for vehicle conversions. Priority will be given to original equipment manufacturer (OEM) vehicles.. o For refueling appliances such as tank, pumps and apparatus used to refuel AFVs, a 50% minimum of the total oroiect costs must be demonstrated as project cost-share and up to 50% are eligible for reimbursement. When upgrading or retrofitting existing refueling appliances, a portion of the value of the existing infrastructure maybe used as an in-kind cost-share contribution. The value of this contribution must be clearly demonstrated and described through the proposal. For refueling apparatus related to biofuels use, applicants must clearly explain their commitment to continued use after° project funding expires. THIS IS A REBATE PROGRAM. Funds must be expended first and will then be reimbursed upon receipt of previously agreed upon proof of expenditures and/or documented in-kind contributions, Evaluation Criteria A Triangle Clean Cities and T.1COG selection committee will review all proposals. All projects will be evaluated on the extent to which they expand alternative fuel use in the region. Priority shall he given for strength in the following criteria: 1) Diversity of projects -Project administrators are seeking proposals for all eligible types of fuels, infrastructure, and vehicles and are interested in finnding a diversity of proposals throughout the geographic region. Project ranking criteria will take into account how proposed projects help meet the goal ofproject diversity. 2) Cost-share contribution -Project organizers are interested in encouraging partnerships with grant recipients as demonstrated through the percentage of cost share costs that applicants aze willing to contribute. Although up to 50% of project costs are eligible for reimbursement, program planmers are requesting that applicants offer the maximum cost- share contribution they are able to provide. A minimum cost-share of 50% is required. Any applicant that provides for a higher percentage cost share contribution will be given more weight in the review process. Cost share contributions can be demonstrated through cash azxd in-kind contributions and must be clearly identified and described through the proposah Actual cash cost-share contributions will be given more weight in the evaluation process than in-kind contributions. However, project administrators reserve the right to award more than 50% reimbursement level to particular projects with exceptionally high public benefits, such as commercial service stations, Statement of Interest Alternative Fuel Vehicles Incentives Grant May 10, 2004 Organization: Orange County, NC Contact: David Stanch, AICP Environment and Resource Conservation Director PO Box 8181 Hillsborough, NC 27278 919-245-2598 Orange County has been interested in looking at the potential for converting its vehicle fleet to a higher percentage of alternative fuel vehicles for several years, The County's Alternative Fuel and Low Emission Vehicle report (2000) identified several opportunities, and resulted in a Mobile Source Emissions Reduction grant proposal to the State for a CNG fiieling station and cost differential on three vehicles, However, State budget crisis and other issues did not allow for the grant to be approved.. The County's State of the Environment report for 2002 again called for emphasis on fuel infrastructure and acquisition of CNG and biodiesel vehicles. Based on recent conversations, Orange County is interested in submitting an application with one or more of the following components: A joint biodiesel and CNG fireling facility to be constructed with NCDOT/N.C, Department of Corrections and the Town of Hillsborough, to be Located at the existing DOT Maintenulce facility fueling station in Hillsborough, This site is within 500 feet of I-85 and within %-mile of I-40, located very near the point where the two interstates separate, This option will require further discussion with NCDOT and Hillsborough, but preliminary feedback has been positive. This facility could serve goverrunent vehicles with astrategically-located station between Greensboro and Raleigh, and also offer the potential for public access for private vehicles in the future; or 2. Alternatively, a CNG and biodiesel fueling facility at Orange County Public Works on NC 86 in Hillsborough. This site is also the future site of the co- located To~tm of Hillsborough Public Works facility, Both County and Town Public Works vehicles would be housed at this site. 3. Cost differential for the purchase of two to three vehicles, CNG or biodiesel. The County currently has several E85 vehicles, but no dedicated alternative fuel vehicles, but strong interest exists to begin a systematic purchase of AFV's.