City Council
Report
City Council Meeting: May 12, 2026
Agenda Item: 4.A
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To: Mayor and City Council
From: Anuj Gupta, Director of Transportation, Department of Transportation, Transit Maintenance
Subject: Award Bid #4507 to Clean Energy Corporation for Renewable Liquid Natural Gas Fuel for the Department of Transportation
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of Categorical Exemption pursuant to Section 15301 (Existing Facilities) and a finding of no possibility of significant effects pursuant to Section 15061 (b)(3) of the California Environmental Quality Act (CEQA) Guidelines;
2. Award Bid #4507 to Clean Energy Corporation to provide renewable liquid natural gas for the Department of Transportation; and
3. Authorize the City Manager to execute an agreement with Clean Energy Corporation, in an amount not to exceed $7,279,967, including a 10% contingency, for a five-year period, with future year funding contingent on Council budget approval.
Summary
Big Blue Bus (BBB), a division of the Santa Monica Department of Transportation (DOT), operates 195 transit buses across 69 square miles of greater Los Angeles, providing an average of 820,000 rides each month. DOT is committed to the City of Santa Monica’s (City) sustainability goals through the purchase of zero-emission transit buses and the purchase of the lowest carbon intensity fuel available for its fleet of existing natural gas buses. BBB currently operates 34 battery electric buses and 159 buses powered by renewable liquid natural gas (RLNG) harvested and produced in California. Staff recommends awarding Bid #4507 to Clean Energy to provide renewable liquid natural gas fuel for transit buses in an amount not to exceed $7,279,967 for a five-year period beginning in FY 2026-27. 2 of 4
Discussion
DOT has begun transitioning its fleet of BBB transit buses to zero-emission battery electric buses (BEBs), with 34 BEBs currently in service and an additional 30 BEBs on order with delivery scheduled for 2027. Due to the age of its existing transit bus fleet, DOT will continue to operate natural gas buses for a five-year period at a minimum.
DOT currently operates 159 natural gas-powered buses fueled by RLNG that is 100% domestically produced and is derived from harvested landfill methane. This fuel is nonfracked methane harvested from organic waste in landfills. The process of harvesting and processing RLNG provides a product that has fewer impurities than conventional natural gas and is a cleaner burning source of methane fuel. Historically, this gas has been burned off into the atmosphere but can be harvested and collected as fuel.
The use of RLNG significantly reduces harmful greenhouse gas emissions. The measure of emissions reduction involves calculating Low Carbon Fuel Standard (LCFS) credits and greenhouse gas emissions. LCFS promotes the use of greenhouse gasreducing transportation fuels such as liquid biofuels, renewable natural gas, and hydrogen through a fuel-neutral declining carbon intensity standard which is administered by the California Air Resources Board. Carbon intensity (CI) is a measure of the greenhouse gas (GHG) emissions associated with the production, distribution, and consumption of transportation fuels. To achieve the GHG reductions at the lowest cost and in the most consumer-responsive manner, LCFS uses a market-based credit trading system to allow providers to choose how they reduce emissions while responding to consumer demand. The low CI of the RLNG fuel that DOT uses generates credits that are used to offset the cost of purchasing RLNG fuel, reducing vehicle operating costs.
Staff recommends Bid #4507 be awarded to Clean Energy to provide renewable natural gas fuel, which will enable the City to purchase renewable natural gas to fuel its fleet of transit buses and other City-operated natural gas vehicles.
Vendor Selection
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Bidder Recommendation
Best and Only Bidder Clean Energy, a California corporation Evaluation Criteria Price, Experience
Municipal Code SMMC 2.24.180
Submittals Received
Clean Energy, a California
corporation $7,279,967
Taylor DM Brands, Inc. No Bid
Bid Data
Date Posted Posted On Advertised In (City
Charter & SMMC)
Vendors
Downloaded
Date Publicly
Opened
2/4/2026 City's Online
Bidding Site
Santa Monica Daily
Press 16 2/27/2026
Additional Vendor Outreach & Justification to Award
Clean Energy was the only bidder to submit a bid to provide renewable natural gas (RLNG) that meets all City requirements for methane purity and delivery temperatures included in the bid specifications. One bidder submitted a "No Bid" response stating that they do not offer the products specified in the bid. Based on price and experience, Clean Energy is recommended as the best and only bidder.
Environmental Review
The contract to provide RLNG fuel to the Transportation Department is categorically exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15301 (Existing Facilities) and Section 15061 (b)(3) of the CEQA Guidelines. Section 15301 exempts Class 1 (Existing Facilities) projects from CEQA, which includes the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. The furnishing of RLNG fuel would not result in any modifications to existing maintenance facilities and would not expand or materially change existing maintenance operations or increase the 4 of 4
City’s fleet natural gas vehicles and transit buses. Therefore, this is categorically exempt as set forth in Section 15301 of the CEQA Guidelines. Additionally, the contract is exempt from CEQA pursuant to Section 15061 (b)(3) of the CEQA Guidelines, which states that CEQA does not apply “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.” The contract would provide RLNG fuel and would not have a physical impact on the environment.
Financial Impacts and Budget Actions
Staff seeks authority to approve funding from the Big Blue Bus fund to award a contract with Clean Energy to provide renewable natural gas. Funds are included in the FY 2026-27 Budget Plan which was approved by Council in the FY 2025-27 Adopted Biennial Budget.
Contract Request
FY 2026-27
Request Amount Future Years Amount Department Account # Total Contract Amount $2,364,349 $4,915,618 60600013.521841 $7,279,967
Future year funding is contingent on Council budget approval.
Prepared By: David Nanjo, Administrative Analyst
Approved Forwarded to Council
Attachments:
A. Clean Energy Oaks
B. Clean Energy City of Santa Monica Levine Act