DATE: January 8, 2024
TO: Council Sustainability Committee
FROM: Director of Public Works
Director of Maintenance Services
SUBJECT: City Fleet Electrification & Electric Vehicle Charging – Discussion and Direction to Staff
RECOMMENDATION
That the Council Sustainability Committee (CSC) reviews and comments on this report.
SUMMARY
This report presents a summary of a recently completed study analyzing the costs and charging infrastructure needed to electrify the City’s fleet, including all non-emergency light, medium and heavy-duty vehicles. The report shows that the costs to acquire electric vehicles are much higher than those for vehicles with internal combustion engines – even when following the City’s standard 15-year replacement timeframe. This report also addresses the charging infrastructure needed for the City’s fleet as well as recommended charging infrastructure for use by City employees. Transitioning to a fleet of electric vehicles, including the required charging infrastructure, will require significant City resources. The City currently spends approximately $3.2M on its non-emergency fleet, including new vehicle purchases and the operation and maintenance of existing vehicles. Transitioning to electric vehicles is estimated to cost approximately $5.5M per year.
BACKGROUND
In June 2020, Council adopted ambitious goals to reduce greenhouse gas (GHG) emissions 55% below 2005 levels by 2030 and to work with the community to develop a plan that may result in the reduction of community-based GHG emissions to achieve carbon neutrality by 2045. Of Hayward’s total GHG emissions, the transportation sector accounts for close to 65%. While active transportation (walking, biking, etc.), ridesharing, public transit, and other strategies will be important to achieving needed reductions in Hayward’s transportation emissions, the electrification of cars and trucks will also be a key part of reducing overall emissions.
In 2020, Council adopted, as part of its Strategic Roadmap, a goal of transitioning 15% of the City’s fleet to EV or hybrid models by June 2023. As of December 2023, the City fleet had 16% EV or Hybrid vehicles (60 out of 367). An additional 8 hybrid vehicles are currently on order. Once received, the percentage will increase to 18%.
Advanced Clean Fleet Regulations – In October 2022, the California Air Resources Board (CARB) adopted new rules for medium- and heavy-duty vehicles. The regulations require that, effective January 1, 2024, at least 50 percent of annual vehicle purchases must be zero-emission vehicles (ZEV) and beginning January 1, 2027, 100 percent must be ZEV. Emergency vehicles are exempt from the rules. In addition, exemptions may be approved by CARB if a required ZEV is not available to purchase in the same configuration as a vehicle needing to be replaced. Starting in 2025, CARB will maintain a ZEV Purchase Exemption List with common vehicle body configurations that are not available. The list would allow fleet owners to purchase new internal combustion engine (ICE) vehicles without applying for an exemption in advance.
DISCUSSION
Staff worked with Ava Community Energy and their consultants to prepare the City of Hayward Fleet Electrification Assessment (see Attachment II). The report, prepared by a consultant team led by Frontier Energy with support from Ava Community Energy, analyzed the impacts of electrifying the City’s fleet of 240 light-, medium- and heavy-duty vehicles located at various City facilities. The report includes the following sections:
10-year cost summary
Charging equipment for fleet vehicles
Charging equipment for employees
Fleet Transition Planner
Advanced Clean Fleet (ACF) Compliance
Fuel/Maintenance Cost Savings
Greenhouse Gas Emission Reduction Benefits.
The report presents the cost of electrification (“EV Transition”) compared to current costs (“Baseline”). The analysis shows that, over the next 10 years, transitioning of the City’s municipal fleet to electric vehicles would increase the City’s net costs by about $22.5M. This includes a decrease in operating expenses by approximately $3M when compared to the Baseline scenario over a ten-year period. These costs include the charging equipment needed to support the new fleet of EVs. More detail regarding these costs is provided in Table 1 below.
Table 1. 10-Year Summary of Costs (2024 – 2034)
Baseline
EV Transition
Cost
Cost
$ Above Baseline
Vehicle Capital Expenditures
$22,185,934
$39,365,958
$17,180,024
Vehicle Operational Expenditures
$2,070,319
$1,279,137
-$791,182
Insurance
$1,408,555
$3,477,358
$2,068,803
Registration
$894,784
$1,483,173
$588,389
Fuel Costs
$5,478,678
$3,227,646
-$2,251,032
Fleet Chargers Capital Expenditures
$4,848,700
$4,848,700
Fleet Charger Operational Expenditures
$898,390
$898,390
Total
$32,038,270
$54,580,362
$22,542,092
It is important to note that the electrification costs in this report are preliminary estimates. After construction-level documents are prepared for charger installations are, it is possible that costs will change if additional infrastructure upgrades (transformers, electrical panels, etc.) are found to be necessary. Operational costs, including fuel, electricity and maintenance, are also estimates. The costs of procuring electric vehicles are based on market conditions as of the fall of 2023. The attached report is a 10-year plan. It assumes that the City continues its practice of replacing most of its non-emergency vehicles every 15 years. Therefore, depending on vehicle availability, the complete transition to an all-electric fleet is expected to take at least 15 years.
Compliance with CARB’s Advanced Clean Fleet Regulations will be very expensive. In addition to the high cost of EVs that are currently available, charging equipment will be expensive and may take a long time to install. New transformers can take many months to receive and coordination with PG&E can also result in significant delays. Staff cannot purchase new electric cars and trucks until the charging infrastructure is installed. Staff is seeking direction from the CSC to pursue implementation of the recommendations in the attached report.
Charging Equipment for Fleet Vehicles – The report recommends 146 Level 2 chargers and 6 direct current fast chargers (DCFC). While some infrastructure, such as service and transformer upgrades would need to be installed in the near term, chargers would be installed in phases as electric vehicles area added to the fleet. All recommended chargers would be dual-port chargers so they would provide charging for 304 fleet vehicles Preliminary analysis shows that several facilities would need electrical upgrades (transformers, switchgear, etc.). These improvements are likely to require long lead times to procure the necessary equipment and schedule installations with PG&E. Table 2 below lists the number of chargers recommended for each location as well as the need for electrical upgrades.
Table 2. Recommended Fleet Chargers by Location
Location
Existing Chargers
Number of chargers recommended
Electrical Upgrades Needed?
L2
Fast
L2
Fast
Airport
2 3
Yes. May be completed along other electrical upgrades planned for the Airport.
Animal Shelter
3 No
City Hall Garage
23 2
Yes. electrical service upgrade and new service panel
Corp Yard
68 2
Yes, new pad-mounted utility transformer; new switchboard; and service panels Facilities & Landscape Maintenance
1 4
No
Fire Station 1
3 No
Fire Station 2
2 Yes, new service panel
Fire Station 6
3 1
No
Fire Station 7
1 Likely no, but further analysis needed.
Fire Station 9
1 No
Police Dept
18 2
Yes, new step-down transformer and sub-panel
North District Police
4 Yes, new step-down transformer and sub-panel
Utilities Center
2 8
No
Water Pollution Control Facility
2 6
No (New Admin building will provide new infrastructure.) Weekes Library
1 No
Total
7 0
146
6 The cost to install the chargers is estimated to be approximately $4.8 million and the cost to operate the chargers is estimated to be approximately $90,000 per year.
Installing solar photovoltaic (PV) systems along with the chargers, would reduce operational costs and provide covered parking opportunities for the City’s fleet which would protect the vehicles and improve comfort for staff. Staff is also working with Ava Community Energy to explore the possibility of adding solar and battery storage to improve resiliency to grid outages. Even with solar and batteries, staff may need to upgrade existing diesel generators to keep fleet vehicles charged during an extended grid outage.
EV Procurement – The cost of procuring EVs over the next ten years is projected to be $39.4M compared to $22.2M if the City were to only purchase internal combustion engine vehicles. However, because most vehicles are replaced every 15 years, full electrification of the City’s fleet is expected to take approximately 15 years. As noted above, the ACF requires, effective January 1, 2024, at least 50 percent of medium- and heavy-duty purchases must be zero-emission vehicles (ZEV) and beginning January 1, 2027, 100 percent must be ZEV. The consultant team prepared an ACF compliance tool to help plan medium- and heavy-duty vehicle purchases to ensure compliance with the ACF CARB rule and to ensure enough chargers are installed and operational before the delivery of EVs.
Current costs for electric vehicles are much higher than comparable vehicles with internal combustion engines (ICE). The difference in cost for medium and heavy-duty (MD/HD) vehicles is even more significant. For example, the cost of an ICE street sweeper is approximately $375,000, whereas an EV street sweeper is approximately $850,000. Production of MD/HD EV trucks continues to be slow-paced. Chassis manufacturers have focused on hauler-type chassis like flatbeds, grain and car haulers and buses. Many of the City’s MD/HD trucks require power take-off (PTO) to enable dump bodies, hydro-excavator, sewer vacuum trucks, grapple buckets and cranes. None of the traditional major manufacturers are producing a chassis that supports this type of service-body in full EV models as of 2023. It is vital that the City acquire trucks and chassis that are ZNE/EV from reputable manufacturers that will support service needs and parts over the full 15-year life-cycle of the vehicle. Staff recommends procurement solely from reputable manufacturers that have a long history of quality chassis production and service/parts support.
Fuel/Maintenance Cost Savings – A significant benefit of transitioning to electric vehicles is the reduced fuel and maintenance costs. Maintenance costs for EVs are estimated to be 50% of the equivalent ICE vehicle maintenance cost. While Low Carbon Fuel Standard (LCFS) credits can reduce charging costs, the costs to fuel an electrified fleet would still be lower than a conventionally powered fleet, even without LCFS credits. Over the next 10 years, if the recommended EVs are purchased and charging equipment installed, total savings on maintenance and fuel is expected to be approximately $3M.
Charging Equipment for City Employees – While transitioning the City’s fleet to zero emission or electric vehicles is required by state regulations, Council has also expressed interest in providing EV charging for employees. Such an amenity may help to attract and retain employees and may also help to incentivize employees to purchase EVs. Staff is recommending the installation of 145 dual-port Level 2 chargers. This would provide 290 parking spaces for charging vehicles. Not all employees will drive EVs to work and those who do, may not need to charge at work every day. Also, with a number of employees working remotely on a given day, there will be additional opportunities for employees to share chargers.
Table 3. Proposed EV Chargers for Employees
Location
# of Employees
# of Employees on Largest Shift
Existing
# of Level 2 Chargers
Recommended # of Level 2 Chargers
Airport
11 11
2 3
Animal Shelter
19 16
5 City Hall Parking Structure*
293
271
68 Corp Yard
69 69
1 17
Fire Station 1
21 7
5 Fire Station 2
15 5
4 Fire Station 3
9 3
2 Fire Station 4
9 3
2 Fire Station 5
9 3
2 Fire Station 6
9 3
4 2
Fire Station 7
21 7
5 Fire Station 8
9 3
2 Fire Station 9
9 3
2 Landscape & Facilities
27 27
1 7
Police Department – Main**
259
77 0
Police Department - North
10 10
3 Utilities Center
29 29
7 Water Pollution Control Facility
26 20
2 7
Weekes Library
6 6
2 Totals
860
496
10 145
* Employee count for City Hall parking structure includes City Hall and main Library staff. ** Given the uncertainty of the long term use of the Police Department building, staff proposes a small number of chargers to be shared among fleet and employee vehicles.
While the costs for chargers for employees can be considered separately from the chargers for fleet vehicles, they need to be considered collectively prior to preparing detailed construction plans. The electrical infrastructure at each site will be sized to handle all the chargers at a given location. The cost to install the chargers for employees is estimated to be approximately $3.5 million and the cost to operate the chargers is estimated to be approximately $78,000 per year.
Staff recommends that employees pay some amount to help offset electricity costs. Determining the actual cost of electricity may require additional metering infrastructure, so staff recommends developing a nominal time-based fee for employees. In a survey of other public agencies, staff found that most require their employees to pay for charging, however most do not have rates that cover the full cost. For agencies that do provide free charging, they only have a small number of chargers.
FISCAL IMPACT
As noted above, over the next ten years, transitioning the City’s fleet to electric vehicles is estimated to increase overall fleet costs by approximately $22.5M. This cost includes vehicles, charging infrastructure and operations. While fuel and maintenance costs are expected to decrease by approximately $3M, registration and insurance costs will increase so that overall operating costs will increase approximately $500K when compared to the Baseline scenario over the next 10 years. It is important to note that these costs are only for the first 10 years of the planned transition to electric vehicles. Fleet vehicles are replaced every 15 years, so the complete transition will take at least 15 years. The current Capital Improvement Program includes $489,000 per year for FY24 through FY 26 for charging infrastructure to be funded by the federal Infrastructure Act. The operating budget currently includes approximately $2.2M per year for non-emergency vehicle replacements. The transition to only purchasing electric vehicles will require approximately $4M per year.
In addition to the cost to install fleet EV charging infrastructure, providing charging equipment for City employees would cost approximately $3.5M. The annual cost to operate the employee chargers would be approximately $78,000 and may be offset by rates paid by employees.
The Federal Infrastructure Bill has resulted in the creation of a new Joint Office of Energy and Transportation to support the deployment of $7.5 billion to build out a national electric vehicle charging network, with a focus on filling gaps in rural, disadvantaged, and hard-to-reach locations. Most grant funding opportunities have been for public-facing charging facilities, but staff is anticipating that new grant programs may support fleet infrastructure. Staff and our legislative advocacy partners will monitor Funding Announcements for these new grant programs.
Light-duty EVs may be eligible for a Qualified Plug-in Electric Drive Motor Vehicle Credit of up to $7,500. The credit, available under Section 30D of the Internal Revenue Code, was modified with the passage of the Inflation Reduction Act. Guidance from the IRS indicates that the City should be able to benefit from the tax credit even though it doesn’t have federal tax liability.
Ava Community Energy has indicated the agency may be able to provide the capital needed to purchase, install and operate the charging infrastructure for the City’s fleet vehicles. In this scenario, the City would pay Ava an annual service fee over the years of operation, so Ava can recoup its investment. Staff is currently exploring this potential partnership opportunity.
ECONOMIC IMPACT
Electrification of the City’s fleet and providing EV charging for City employees are not expected to significantly impact the Hayward economy.
STRATEGIC ROADMAP
This agenda item relates to the Strategic Priority of Combat Climate Crisis and Champion Environmental Justice. This item specifically relates to the following Projects:
Reduce Greenhouse Gases and Dependency on Fossil Fuels
Project C1: Implement Year 1 Programs from the adopted GHG Roadmap (Climate Action Plan) Project C3: Present a plan on EV charging for city facilities to CIC (for fleet and employee commuters) The draft Climate Action Plan, tentatively scheduled for Council consideration on January 23, 2024, includes the following actions:
T 7.1 Establish and adopt Zero-emission Fleet Conversion and Purchase Policy that requires new, and replacement municipal fleet vehicle purchases are EVs or ZEVs. The policy will also include a schedule for replacement of fleet vehicles to meet a 100% carbon neutral fleet by 2040.
T 7.2 Conduct feasibility and cost assessment to determine the number of EV/ZEV chargers and funds needed to support the fleet transition to 50% EV/ZEV by 2030. Expand EV/ZEV charging infrastructure for city fleet and employees in alignment with feasibility study.
T 7.4 Evaluate credit generation opportunities within the Low Carbon Fuel Standard (LCFS) program for ZEV/EV fueling and charging stations for the municipal fleet to offset cost of infrastructure development needed to support transition.
SUSTAINABILITY FEATURES
Electrification of the City’s fleet and vehicles throughout the community is necessary to meet the City’s long-term greenhouse gas (GHG) emissions reduction goals. According to the fleet electrification assessment, it is estimated that the City can reduce its GHG emissions by approximately 45% (from 16,040 to 8,857 metric tons of carbon dioxide equivalent ) over the next 10 years by converting the City’s fleet to all electric vehicles.
PUBLIC CONTACT
No public contact was made for this agenda item.
NEXT STEPS
Upon direction from the Committee, staff will present a report to Council, which could include a request to allow staff to continue to work with Ava Community Energy to explore the possibility of a “charging-as-a-service” arrangement or a request to pursue an RFP to prepare construction-level plans for charger installations. Finally, staff will seek Council support for EV purchases in the FY25 operating budget to be approved in the spring of 2024.
Prepared by: Erik Pearson, Environmental Services Manager Justin Temores, Fleet Maintenance Manager
Allen Koscinski, Facilities and Building Maintenance Manager Rodney Affonso, JR., Deputy Director of Maintenance Services Recommended by: Alex Ameri, Director of Public Works
Todd Rullman, Director of Maintenance Services
Approved by:
_____________________________________
Kelly McAdoo, City Manager
https://ww2.arb.ca.gov/resources/fact-sheets/advanced-clean-fleets-regulation-exemptions-and-extensions-overview In October 2023, East Bay Community Energy became Ava Community Energy.
Types of EV chargers:
Level 1 – 15-20 Amps, providing a driving distance of 3-4 miles/hour of charge.
Level 2 – 40 Amps, providing a driving distance of 25-30 miles/hour of charge.
Direct Current Fast Charger (DCFC) – 80 – 400 Amps, providing a driving distance of 125-1,000 miles/hour of charge.