BOARD MEETING DATE: December 5, 2008
AGENDA NO. 3

PROPOSAL:

Execute a Sole Source Contract for Maintenance and Management Services of Fast Fill CNG Fueling Station at AQMD Headquarters and Issue Purchase Orders for CNG Station Enhancements

SYNOPSIS:

The AQMD currently operates a natural gas fueling station to accommodate the growing alternative fuel use. The station requires periodic preventive maintenance and management services to ensure efficient and continuous operation of the station. This action is to execute a contract with Pinnacle CNG Company for the maintenance and management service of this station from the Fast Fill CNG Fueling Station Enterprise Fund. Staff also proposes to provide 24 hour public access to the AQMD station by installing a security camera and an automatic gate at a cost not to exceed $15,000 from the Clean Fuels Fund.

COMMITTEE:

Administrative, November 14, 2008, Recommended for Approval

RECOMMENDED ACTIONS:

1. Authorize the Chairman to execute a contract with Pinnacle CNG Company for maintenance and management services for the fast fill compressed natural gas fueling station at AQMD headquarters at a cost recovered from the sale of CNG through the Fast Fill CNG Fueling Station Enterprise Fund.
2. Authorize the Procurement Manager to issue purchase orders for installation of a security camera and an automatic gate in the amount not to exceed $15,000 from the Clean Fuels Fund.

 

Barry R. Wallerstein, D.Env.
Executive Officer

Since January 2003, the AQMD has operated a fast-fill CNG fueling station at its Diamond Bar headquarters to accommodate both the AQMD alternative fuel vehicle fleet as well as most third party CNG vehicles. Since the station’s opening, the AQMD has contracted with Pinnacle CNG Company (Pinnacle), the original station constructor and owner of key assets required for proper system performance (replacement parts and system components) for management and maintenance of the CNG refueling station. The current contract will end on December 31, 2008.
 

Proposal

Staff recommends approval of a sole source contract with Pinnacle to continue maintenance and management services for the AQMD CNG fueling station for a period of five years. The contractor will be completely responsible for equipment maintenance and any repairs or replacements due to equipment failures or breakdown. The current management and maintenance agreement ends on December 31, 2008. Maintenance and management services will include the following:

• 24 hour auto-dialing “Help Phone” at the fueling dispenser area
• Automated notice (3-minute) to Pinnacle of CNG service interruption
• 2-hour response time for fueling service interruption
• Remote video monitoring access of CNG fueling island
• Remote computer telemetry monitoring
• Detailed vehicle fueling reports (paper and electronic)
• Monthly fleet summary reports (paper and electronic)
• Total station monthly summary reports (paper and electronic)
• Public access CNG marketing and billing services
• Calculation and tracking of state and federal CNG fuel taxes
• Monthly reconciliation of all CNG receipts and utility billings
• Free station and billing software upgrades during the term of the contract

An enterprise fund was established to account for various CNG fueling activities, costs and credits. This fund allows the recovery of taxes, gas costs and overhead costs associated with the public sale of CNG. Management and maintenance fees as well as credit card transaction charges for CNG fueling will also come from this enterprise fund. The complete management of this fund and the various activities, transactions, records and payments associated with CNG fueling operations would require significant AQMD resources. Therefore, outsourcing these functions to Pinnacle provides a more cost-effective solution.

In order to allow greater convenience for public fueling, staff recommends installing security and monitoring equipment to provide 24-hour station access. This requires expansion of the security system to monitor the CNG station as well as install an automatic gate. Staff requests the Procurement Manager to issue purchase orders to install a security camera and an automatic gate at a cost not to exceed $15,000 from the Clean Fuels Fund.
 

Benefits to AQMD

The project covered by this management and maintenance agreement is included in the March 2008 update of the Technology Advancement Plan under “Development and Demonstration of Advanced Natural Gas Systems for Refueling Stations.” The AQMP relies on the expedited implementation of advanced technologies and clean–burning fuels in Southern California to achieve air quality standards.
 

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 the provisions B.2.c.(2): the project involves the use of proprietary technology; and B.2.c.(3): the contractor has ownership of key assets required for project performance (replacement parts and system components). It is in the best interest of the AQMD to contract with Pinnacle for maintenance and management services for the AQMD fast-fill CNG fueling station.

Pinnacle, based in Midland, Texas has developed and owns several patents for its unique hybrid compressor as well as its overall fueling station design. They are well qualified to service and maintain this equipment and they are the only source with direct access to the necessary parts and first-hand experience with the operation and repair of that equipment.
 

Resource Impacts

There is no impact on AQMD’s budget as service costs are paid from the previously described enterprise fund that was established to account for CNG fueling activities and sales, and to recover fuel costs, taxes and overhead costs from the revenue generated from the sale of CNG. The cost for these maintenance and management services is based upon the amount of fuel used by all 230 CNG vehicles in the AQMD fleet as well as the numerous outside fleet and private vehicles. The most recent cost paid by the AQMD was $0.465 per GGE but has been re-negotiated to $0.43 per GGE with annual review and adjustment based upon the California Consumer Price Index (CPI).

At the $0.43 per GGE it is estimated that AQMD costs for this maintenance service agreement will be $52,675 per year for a total cost of $263,375 over the five year term.

These costs will be collected by Pinnacle through the Fast Fill CNG Fueling Station Enterprise Fund and will not come out of AQMD funds. These cost projections are summarized in the following table:

Estimated Maintenance & Management (M&M) Services Costs

The total cost for the security camera and the automatic gate shall not exceed $15,000 from the Clean Fuels Fund. The Clean Fuels Fund was established as a special revenue fund resulting from the state-mandated Clean Fuels program. The Clean Fuels Program, under Health and Safety Code Sections 40448.5 and 40512 and Vehicle Code Section 9250.11, established mechanisms to collect revenues from mobile sources to support projects to increase the utilization of clean fuels, including the development of the necessary advanced enabling technologies. Funds collected from motor vehicles are restricted, by statute, to be used for projects and program activities related to mobile sources that support the objectives of the Clean Fuels Program. Sufficient funds are available from the fund.