Study: Port Authority fuel conversion could cost $20M initially, save $3M annually
By Tom Fontaine
Published: Wednesday, November 21, 2012, 11:04 p.m.
Updated: Thursday, November 22, 2012
A study by a major supplier of natural gas released Wednesday says it could cost $20.8 million upfront to begin converting Port Authority of Allegheny County's bus fleet to the fuel, but the move could save the transit agency $3 million annually.
“I've heard from a lot of elected officials that converting to natural gas should be a no-brainer, but there are a lot of significant issues to think about,” Port Authority CEO Steve Bland said at a committee meeting. “The upfront cost is the biggest one. We don't have $20 million lying around.”
It makes the most financial sense to convert the authority's most-spacious bus garage, in East Liberty, to accommodate natural-gas buses and fueling stations, said the study by EQT Corp. and Santa Monica, Calif.-based consulting firm Gladstein, Neandross & Associates.
The Manchester maintenance garage also would be converted, along with an undetermined number of buses.
The study said too much employee parking would be lost in a conversion of the Collier bus garage, while the Ross garage is too small and the West Mifflin garage's ceiling is too low.
David Ross, director of business development at EQT, predicted officials would be able to get at least $8 million in government grants for upfront costs. More than $3 million in federal funding has been set aside to build a fueling station.
Bland said a study next year will explore whether a public-private partnership could make the project work financially.
Such a deal could allow private companies or charitable foundations to cover the rest of the project's upfront costs and then be paid back over time with money from Port Authority's fuel savings.
Ross said diesel costs average about $3.37 a gallon, compared with $1.54 for the equivalent amount of compressed natural gas.
EQT and the Heinz Foundation paid about $287,000 for the initial study. Bland said next year's study is expected to cost less than $100,000, with Heinz picking up the costs.
If Port Authority decides to pursue a conversion project, it would seek bids from potential private sponsors and natural-gas providers in a public process, officials said.
Also Wednesday, Port Authority officials discussed the potential impact of the two-year federal transportation funding package passed this summer.
The federal government will provide Port Authority with $56.3 million in the U.S. fiscal year ending in September, a decline of 5 percent.
Cuts would mean less money for capital projects, including bus purchases, and eliminate $1 million in funding for the 28X Airport Flyer route that had come from the discontinued Job Access Reverse Commute program.
Bland wouldn't say that alone spelled doom for the airport route, noting increased state funding could save it. Gov. Tom Corbett said this week he plans to propose and lobby for a state transportation funding package next year.
Tom Fontaine is a staff writer for Trib Total Media. He can be reached at 412-320-7847 or email@example.com.
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