California Transit Association

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Setting the Record Straight on Bus Electrification

February 1, 2018

ARB Member’s Words Ring Hollow Regarding Transit’s Commitment to Zero-Emission Goals

By Joshua W. Shaw
Executive Director
California Transit Association

Last week, Dean Florez, a respected past member of the California State Senate and now a member of the California Air Resources Board (ARB), used a statewide publication to slam transit agencies for “stalling” action on a regulation that would mandate the purchase of zero-emission buses (ZEBs).

Here’s why he’s wrong and why the advocacy groups that undoubtedly helped shape his position need to review our record:

  • Despite advances in technology, electrifying California’s bus fleet is a complex and expensive proposition. To be successful, the state must first address the primary barriers to electrification. These barriers include the cost of ZEBs, which, at $750,000, stands at $250,000 more than a conventionally-powered vehicle — state incentive dollars could bring the difference down to $100,000 per vehicle; the lack of funding necessary to build heavy-duty charging infrastructure to support zero-emission buses; and, the high cost and variability of electricity rates. (Notably, most of the available state incentive dollars may not be used to meet the proposed regulatory requirements; rather, these dollars can only be used to exceed the ARB proposal’s stringent parameters.)

Analysis conducted by transit agencies, in a workgroup convened and overseen by ARB, found that the cost of electrifying California’s bus fleet is $3.2 billion to $6.5 billion. Upon conclusion of the analysis, ARB disputed its soundness and published their staff’s own cost model and estimate, which shows long-term savings to transit agencies. Our analysis was broadly substantiated and corroborated by independent scientific study and empirical data collection, by entities such as the National Renewable Energy Laboratory (NREL) and the University of California Institute of Transportation Studies (ITS), among others. 

  • Transit agencies are saying “YES!” to electrification. We are saying only that transit electrification must be done smartly, which means:
    • Methodically – with full consideration of, and clear solutions to, barriers outside the control of transit agencies (e.g. the high upfront capital costs of ZEBs and charging infrastructure, the excessive costs of electricity relative to conventional fuels, and the untallied costs of retraining maintenance workers and bus operators);
    • Iteratively – evaluating cost and operational data as it is collected from real-world ZEB deployments, as well as changing funding landscapes, and allowing for adjustments to long-term targets based on budgetary, operational and technological feasibility; and,
    • In a Manner That Retains Local Decision-Making – allowing the public servants who manage and operate our transit agencies to make operational investments and procurement decisions that avoid the adverse operational impacts that could result from an overly-prescriptive and forced transition to ZEB technology.

In other words, don’t make us sacrifice expanded transit service for the gleam of high-cost technology that isn’t ready for prime time!

And, recognize we are taking concrete steps to bolster demand for ZEBs and to reduce the cost of their deployment. More specifically, we have successfully advocated for increased funding for public transit. Last year, the California Transit Association and other stakeholders helped secure $880 million in new state funding to maintain and rehabilitate transit vehicles and facilities, increase service levels, build new rail lines, and yes, to deploy ZEBs. And, we are actively working through the California Public Utilities Commission to secure $750 million of additional investment in heavy-duty charging infrastructure. Our testimony was even cited earlier this year as justification for an initial investment of more than $7 million. Additionally, we are funding research on developing a new electricity rate structure that would support widespread transit electrification.

Does that sound like “obstruction” to you?

So, why has it taken ARB so long to act on transit electrification? It’s not because we are “resisting any proposal to phase in electric buses and phase out reliance on polluting natural gas or diesel,” as Mr. Florez suggested. It’s because ARB was, and very much still is, learning the basics of transit operations and how to regulate transit agencies without threatening the bus line you depend on to take you to work or to school.

It seems that, for Mr. Florez, it’s easier to impugn the integrity of the public servants that provide your transit service, than to admit that there are things his regulatory agency didn’t know, and still doesn’t know, about public transit.

Let me explain.

In March 2015, ARB published their initial strategy for transitioning California’s bus fleet to 100% zero-emissions by 2040. The strategy, known as the Advanced Clean Transit regulation, would have required transit agencies to purchase zero-emission buses, beginning in 2018. At the time the strategy was published: ARB had not initiated a cost analysis for the regulation; had not identified new funding to support it; could not comprehend how federal transit funding works; and did not anticipate how the fixed costs of charging infrastructure and the variable costs of electricity rates could impede the state’s electrification efforts.

So, transit agencies engaged ARB members and staff to express our concerns with the strategy, its omission of a cost analysis, its lack of funding, and its reliance on then-new zero-emission bus technology. We argued that these factors needed to be addressed, or the state would devastate cash-strapped transit agencies and counterproductively limit cleaner mobility options. (Do you want more people on cars, or, on transit?)

And, for a moment, members of the ARB agreed with us. Don’t believe us?

Here’s the Board’s reaction to a staff presentation on the Advanced Clean Transit regulation, in February 2016:

I start from the premise that we have a goal, which is to turn over the transit fleet to make it more clean and efficient. And that's where we should be aiming to head. Statewide more zero emission buses, whether they're fuel cell, electric or whatever. And if that is our goal, we may not be using the right tool. A purchase requirement may not be the most effective way to get us there…I don't want to say abandon it, but I also don't want to say let's just assume that this is going to be the major answer to our real concern here. I'd like to kind of go back and do some more brainstorming about what is potentially available that could help move us further faster in that direction...” [emphasis added] – Mary Nichols, Chair, ARB

So this is a really high-risk strategy, to do anything in a regulatory sense, I would say. And realistically, the only thing that makes good sense is to say that transit operators need to abide by some set of rules, whatever we were to come up with, if money became available to them through cap-and-trade revenues or some other kind of incentive funds. But if that's the case, why do we need regulations? …I mean, of all the programs – and the things I think I've seen here at ARB over the years, this is the one that seems least compelling to me as a regulatory action, even though it's a great concept.” [emphasis added] – Dan Sperling, Member, ARB

I have that same concern that we not move forward with this very well intentioned proposal and lead to service cuts. It's been articulated by multiple people, but I think it's a reality that I'd like to emphasize.” -[emphasis added] – John Balmes, Member, ARB

These comments and others can be read in full on the ARB’s website, here.

So, ARB went back to the drawing board.

A year of public meetings followed, in which we explored critical issues, like battery costs, the cost of charging infrastructure and electricity rates. The focus of these meetings was understanding the barriers to electrification and discussing mechanisms for addressing them. The cost analysis I previously described was part of this effort. We reasoned that, before the ARB mandates the purchase of zero-emission bus technology, it should know the costs and impacts of the technology.

A complete record of these meetings can be found on ARB’s website, here.

Mr. Florez calls this “foot-dragging.” I call this good governance.

Then, in March 2017, ARB Executive Officer Richard Corey called me with a new idea: since ARB and transit agencies couldn’t resolve the complexities of mandating the purchase of zero-emission buses, maybe the state could identify goals for electrification at each transit agency, as part of a statewide memorandum of understanding (MOU) binding agencies to individually-tailored objectives, and help identify new funding to support progress toward them.

We bit, and on July 31, after months of executive-level conversations between transit agencies and the state, offered ARB a framework for getting there:

“The MOU concept would maintain a role for the market in procurement decisions and limit adverse financial and/or operational impacts to transit agencies by:

  • Supporting the deployment of ZEBs by transit agencies across California through existing and/or new incentive programs, administered by ARB, designed to address the incremental cost of ZEBs over conventional technologies, as well as the cost of infrastructure.

ARB would take an active role in maximizing the amount of funding directed to transit agencies for the purposes of deploying ZEBs:

  • Supporting the deployment of near-zero emission engines and the use of low carbon fuels, where appropriate, through existing and/or new incentive programs, administered by ARB, designed to address the incremental cost of these technologies over conventional technologies.
  • Protecting existing transit service, planned capital expansion or rehabilitation projects and/or connectivity by maintaining local decision-making, and by preventing the diversion of state and federal formula funds and resources from these critical uses.
  • Collecting and publishing robust data on the costs and operational impacts of ZEBs and other ‘innovative options’ gleaned from the real-world operation in various contexts.
  • Collecting and publishing data on the continued adoption of zero- and near-zero emission technologies by transit agencies.
  • Instituting a public process at ARB for the regular review of progress by transit agencies toward the key objectives of the MOU, as well as for the regular evaluation of the feasibility of meeting these objectives based on incentive funding availability and real-world cost and operational data.
  • Complementing regional air quality and transportation plans, with real and quantifiable emission benefits beyond existing programs.”

We hoped these principles would serve as the basis for more detailed conversations about timelines for phasing in zero-emission buses and funding needs. We never got there.

In November 2017, after months of silence, Mr. Corey had one of his staffers call me to kill the MOU approach, saying only that they were returning to a regulatory path, given a supposedly-improved funding landscape, more advanced ZEB technology, and pushback from groups representing the environmental and environmental justice communities. These groups, while often vocal supporters of better and more frequent transit service, refuse to admit that there are legitimate financial and operational risks to mandating the purchase of ZEB technology. For these groups, to accept any strategy to mitigate these risks is to capitulate to the fossil fuel industry. They can’t see that those who operate transit service might be more honest about the real-world performance of ZEBs than the manufacturers trying to sell them.

The framework for the new regulatory proposal, the Innovative Clean Transit regulation, was released in December 2017. If approved by ARB, it would institute an aggressive purchase mandate, beginning in 2020, and include provisions that disallow the use of state incentives to meet the mandate; apply the mandate to smaller “dial-a-ride” vehicles for which there are no certified electric technologies; and, tell San Francisco that their existing electric trolley buses don’t count as zero-emission buses. Can you see why we say there’s still more work to be done?

Readers might give Mr. Florez the benefit of the doubt – maybe he just didn’t know the full story of engagement between ARB and transit agencies, or all the work transit agencies have done to support zero-emission buses. They shouldn’t. My staff and members of my board briefed him just last month, on December 11, to discuss our disappointment with the breakdown of the MOU process, and to make the case for directing additional state resources to offset the cost of electric buses and charging infrastructure. You can even read the letter we shared with him here. During that same meeting, he expressed great surprise at the high cost of electricity that transit agencies incur.

So, next time Mr. Florez publishes an opinion piece claiming that transit agencies are dragging their feet on electrification and obstructing progress, he should check with his staff, or maybe just review his calendar.