BOARD MEETING DATE: February 2, 2007
AGENDA NO. 12

Amend Award for Natural Gas Fueling Infrastructure with Orange          County Transportation Authority

SYNOPSIS:

At the October 2002 meeting, the Board approved funding in the amount of $1 million to cost share with Orange County Transportation Authority (OCTA) an expansion to the existing LNG fueling station at its Anaheim or Garden Grove locations.  OCTA has recently committed to pursuing CNG fueling for all future bus purchases for fuel diversity and security issues.  They will continue to use LNG fuel for the existing buses.  This action is to amend the previous award and apply the funds to cost share construction of a new CNG fueling station at their Santa Ana facility, estimated at $5,841,729 to construct.

COMMITTEE:

Technology, January 26, 2007, Recommended for Approval

RECOMMENDED ACTIONS:

1. Transfer $650,000 designated for the LNG fueling station for Orange County Transportation Authority (OCTA), as approved by the Governing Board on December 3, 2004 and October 4, 2002, to the Clean Fuels Fund.  ($350,000, the balance of the $1 million originally awarded to OCTA is from the Clean Fuels Fund).
2. Authorize the Chairman to execute a contract with Orange County Transportation Authority to cost-share their new CNG fueling station in the City of Santa Ana in an amount not to exceed $1,000,000 from the Clean Fuels Fund.

Barry R. Wallerstein, D.Env.
Executive Officer

Background

OCTA operates 232 LNG-fueled, 40-foot, low-floor transit buses manufactured by North American Bus Industries (NABI). OCTA also operates two LNG refueling stations located in Anaheim and Garden Grove. Each has two 25,000-gallon LNG storage tanks buried underground, which is a unique design that has resulted in some operating problems. In addition, OCTA has also experienced interruptions in their LNG fuel supply, creating concerns regarding operating reliability and fuel diversity. 

In October 2002, the Board awarded $1 million to OCTA to expand its LNG refueling capacity.  In December 2004, the Board amended the 2002 award to cover the cost of new LNG tanks and expand its Santa Ana refueling facility for L/CNG.  OCTA now has a desire to have the Santa Ana facility provide only CNG fueling.

Proposal

OCTA Board of Directors approved the accelerated procurement and delivery of 249 CNG buses as well as the construction of a new CNG fueling station located in Santa Ana. The new fueling station and buses will support OCTA’s commitment in meeting demands for additional transit service to the Orange County community while facilitating the replacement of older diesel buses with cleaner burning CNG.

The CNG station will be a 100-percent locally funded effort that will fully support up to 250 CNG transit vehicles. The California Trillium Company will design, construct, own, operate and maintain the new CNG fueling station under a 10-year lease-to-own agreement at a total cost not to exceed $17 million. Funding provided by the AQMD will be used to help offset the cost of capital equipment and installation. Capital-construction costs do not include design, engineering and permitting estimated at $80,000. Total cost of construction is $5,841,729. The total contractual obligation to California Trillium Company is $17M over 10 years.

CNG will be produced by a compression system fed by pipeline natural gas with the installation of four 600 horsepower compressors. The facility will fuel four buses simultaneously, each with 8500 standard cubic feet (SCF) of CNG within 5 minutes of connected fueling time. The CNG fueling system will service four single-hose CNG dispensers for high-capacity fast-fill bus fueling to 3,600 psig and one two-hose dispenser for light-duty fast-fill fueling with a 3,000 psig hose and a 3,600 psig hose.

The CNG fueling station described previously will provide an estimated 2.5 million therms for throughput in the first year of operation, increasing to a throughput of 4.5 million therms in the fourth and fifth years of operation. Upon completion, the CNG fueling facility will support approximately six 40-foot long CNG buses that will arrive on a weekly basis beginning March 19, 2007 to November 10, 2007, until 201 CNG buses are on property within eight months of project completion.

This action is to amend the previous award and apply the funds to cost share construction of a new CNG fueling station at the OCTA Santa Ana facility.

Benefits to AQMD

The AQMP relies on the expedited implementation of advanced technologies and clean-burning fuels in Southern California to achieve air quality standards. By constructing more natural gas fueling facilities, benefits from this project will accrue to local and downwind cities and area residents.

Sole Source Justification

Section VIII.B.2 of the Procurement Policy and Procedure identifies four major provisions under which a sole source award may be justified. This request for a sole source award is made under provisions B.2.c.(3) OCTA has ownership of key assets required for project performance and B.2.d.: Other circumstances exist which in the determination of the Executive Officer require such waiver in the best interest of the AQMD. Specifically, these circumstances are: B.2.d.(1) The project involves significant cost sharing by OCTA. It is in the best interest of the AQMD to cosponsor the proposed project, as it furthers protection of the public health through expansion of a clean fuel refueling facility and allows for an increased number of clean fuel busses.

Resource Impacts

Total funding for this project is $5,841,729. The total amount of AQMD funding for this project shall not exceed $1,000,000 from the Clean Fuels Fund.