Purchase Order for CNG Fuel
June 7, 2022
DATE: June 7, 2022
TO: Honorable Mayor and City Council
FROM: Paul Cranmer, Public Works Services Director
By: Jeramie Brogan, Management Analyst
SUBJECT: PURCHASE ORDER WITH CLEAN ENERGY FOR THE PURCHASE OF COMPRESSED NATURAL GAS (“CNG”) FUEL FOR THE CITY’S FLEET IN AN AMOUNT NOT TO EXCEED $145,400
Recommendation: Approve
SUMMARY
The City primarily utilizes the Clean Energy compressed natural gas (“CNG”) fueling station located at the Foothill Transit Center to fuel CNG vehicles. The Purchase Order contract with Clean Energy expires on June 30, 2022. It is recommended that the City Council approve a new sole source Purchase Order with Clean Energy for the purchase of CNG fuel for the City’s fleet in an amount not to exceed $145,400 for Fiscal Year 2022-
23. BACKGROUND
The Public Works Services Department (“PWSD”) has been strategically replacing vehicles that meet the City’s Vehicle Replacement Policy criteria with alternative fuel vehicles such as CNG, Hybrids, and Plug-in Electric vehicles. This has allowed the City to be compliant with the Air Quality Management District’s mandates that require heavy duty equipment to be replaced with alternative fuel vehicles, reduces the City’s overall fuel costs, and reduces the City’s greenhouse gas emissions footprint. The PWSD is responsible for the purchase of CNG fuel and currently operates a fleet of 13 heavy duty CNG vehicles, which include three street sweepers, one aerial lift truck, a dump truck, a water tanker truck, a sewer jetter vacuum truck, a hydro-excavator truck, and five one-ton pickup trucks.
DISCUSSION
The PWSD utilizes two local CNG public fueling stations to fuel all City CNG vehicles.
The first station, owned and operated by Foothill Transit, is located less than one-half mile from the Public Works Service Center. The second station, owned and operated by the City of Pasadena, is located on Foothill Boulevard just west of the City limits. Clean Energy is the sole source CNG fuel and service provider for both these fueling stations.
Purchase Order for CNG Fuel
June 7, 2022
There are no other viable CNG fueling stations in the immediate area. Therefore, utilizing a sole source purchase order is necessary.
The PWSD has vehicle fueling cards provided from Clean Energy and is invoiced monthly for fuel purchased at these two stations. It is estimated that the PWSD will use approximately 27,200 Gasoline Gallon Equivalents (“GGE”) by the end of Fiscal Year 2021-22. This usage is approximately 1,000 GGEs less than the previous year; however, the PWSD has placed one additional heavy duty CNG vehicle into operation this month and will place another into operation in the upcoming Fiscal Year. It is projected that the new vehicles will increase the overall annual usage by approximately 3,600 GGEs bringing the total expected usage for FY 2022-23 to approximately 31,000 GGEs.
Although CNG fuel prices are typically less volatile than other fuels, the price per GGE has progressively increased recently. During the past year, the City paid on average $4.05 per GGE, which includes state fuel tax fees, as compared to $3.16 in Fiscal Year 2020-21. Due to the current unpredictability of the energy market, it is recommended that the Fiscal Year 2022-23 Purchase Order reflect the current market rate of $4.69 per GGE, rather than the annual average rate of $4.05 per GGE.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental Quality Act (“CEQA”), and it can be seen with certainty that it will have no impact on the environment. Thus, this matter is exempt under CEQA.
FISCAL IMPACT
The request is for the purchase of CNG fuel for the City’s fleet in an amount not to exceed $145,400. Sufficient funds have been appropriated in the Department’s proposed Fiscal Year 2022-23 Operating Budget for the purchase of CNG fuel.
RECOMMENDATION
It is recommended that the City Council determine that this action does not constitute a project and is, therefore, exempt under the California Environmental Quality Act (“CEQA”); and approve a Purchase Order with Clean Energy for the purchase of Compressed Natural Gas (“CNG”) fuel for the City’s fleet in an amount not to exceed $145,400.