Zero-Emission Bus Regulation
California’s transit agencies have long-been enthusiastic partners in the state’s efforts to improve air quality and achieve ambitious greenhouse gas emission reductions. In the 1990s and early 2000s, California’s transit agencies overwhelmingly adopted clean near-zero emission transit buses, operating on alternative fuels, like compressed natural gas and renewable natural gas. Today, many transit agencies are deploying even cleaner zero-emission transit buses (ZEBs) that rely on battery-electric and/or hydrogen fuel cell technologies. Soon, all transit agencies in California will be required to demonstrate ZEBs — and ultimately, transition to fully electrified transit bus fleets — to comply with the Innovative Clean Transit regulation, adopted by the California Air Resources Board on December 14, 2018.
Unfortunately, as transit agencies work to clean their transit bus fleets, they have often found that the costs of purchasing ZEBs, building the infrastructure necessary to deploy them, and procuring electricity to operate them exceed their expectations and threaten their ability to provide robust transit service. Rather than shy away from the technology and the requirements of the ICT regulation, transit agencies are leaning into it, and advocating, through the Association, for support from the State Legislature, the California Air Resources Board and the California Public Utilities Commission to methodically address the barriers to transit electrification. At the same, the Association is working every day to ensure our members have the educational, technical and professional resources they need to deploy ZEBs and bring them to scale.
With the right support and resources, we believe transitioning California’s entire transit bus fleet to zero-emission is achievable by 2040.
Since 2015, the Association has worked to: 1) influence the development of the proposed Innovative Clean Transit regulation; and, 2) secure greater state and private sector resources to address the barriers to transit electrification.
To further this first goal, the Association established a Transportation Electrification Subcommittee, comprised of 9 members of our Executive Committee and representatives from the California Association of Coordinated Transportation, charged with assessing the shortcomings of the proposed regulation, as presented by ARB in December 2017; and, developing a counterproposal – in concert with the Association’s broader membership and sister Associations – which would provide transit agencies with flexible pathways for electrifying their fleets. This counterproposal was formally submitted to ARB in April 2018.
When it became evident that ARB’s leadership would not support the adoption of our counterproposal, we pivoted strategically to developing specific evidence-based recommendations for communication to ARB that would improve the mechanics of the ICT regulation and ultimately limit its impact on transit operations. Throughout 2018, we met frequently with ARB members and staff to advocate for the inclusion of these recommendations in the ICT regulation. These recommendations were formalized and submitted to ARB in July 2018 and restated in September 2018.
The success of these strategies became clear with the release of the final regulation order — the ICT regulation — in December 2018. The final regulation postpones the aggressive ZEB purchase mandate once proposed for large agencies from 2020 to 2023 and for small agencies from 2023 to 2026. The ICT regulation also institutes a mechanism for possibly postponing the ZEB purchase mandate even further, until 2025, if transit agencies collectively show significant progress on deploying ZEBs. These postponements to the ZEB purchase mandate would allow agencies to claim unfettered access to incentive funding until 2024 or 2025. The ICT regulation also creates a series of off-ramps, which could be exercised by transit agencies for temporary relief from the ZEB purchase mandate, and would exclude cutaways, over-the-road coaches and articulated buses from being subject to the purchase mandate until at least 2026.
In addition to the Association’s work influencing the development of the ICT regulation, we have continued to fight to secure greater state and private sector support for transit agencies that have elected to implement ZEBs. This work has included advocating before the State Legislature and ARB for additional funding to support the procurement of ZEBs and related infrastructure in the 2017-18 and 2018-19 Cap and Trade Expenditure Plan as well as the VW mitigation trust. We also continue to participate in the California Public Utilities Commission’s SB 350 proceeding on Transportation Electrification.
Ultimately, these advocacy efforts resulted in the following outcomes:
2016-17 Cap and Trade Expenditure Plan
$180 million for the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP): HVIP provides point-of-sale vouchers to offset the incremental cost of zero- and near-zero emission buses and trucks as well as charging/refueling infrastructure. This appropriation included a $35 million set-aside for zero-emission buses.
2017-18 Cap and Trade Expenditure Plan
$125 million for the Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (HVIP): HVIP provides point-of-sale vouchers to offset the incremental cost of zero- and near-zero emission buses and trucks as well as charging/refueling infrastructure.
$165.4 million for the Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP): ARFVTP provides grants, loans, and loan guarantees to support the development and production of low-carbon fuels, expand charging/refueling infrastructure, and establishing workforce training programs.
$245 million for Community Air Protection: Created by AB 617 (C. Garcia) [Chapter 136, Statutes of 2017], this funding provides financial incentives to reduce mobile and stationary sources of criteria air pollutants or toxic air contaminants consistent with community emission reduction programs. This funding can be used for the purchase of cleaner technologies with a priority on zero-emission equipment and zero-emission charging infrastructure with a priority toward infrastructure that supports medium and heavy-duty vehicles.
VW Mitigation Trust
$130 million for Zero-Emission Buses and Related Infrastructure: The VW mitigation trust allows transit agencies to claim up to $180,000 for a new battery electric bus and up to $400,000 for a new fuel cell electric transit bus. Funding can be used to invest in supporting infrastructure.
SB 350 Transportation Electrification Proceeding
$52.5 million-$227.7 million for Investment in Electric Bus Charging Infrastructure: These programs will fully fund the construction and installation of the electric vehicle (EV) service connection and supply infrastructure –often referred to as “make-ready” infrastructure – which is required for the installation of an electric bus charger. This infrastructure and equipment includes every component from the distribution circuit up to the stub for the bus charger. As part of this investment, Southern California Edison and Pacific Gas and Electric will also offer transit agencies rebates for the purchase of electric bus chargers, at a value of up to 50% of the cost the chargers.
On Friday, December 14, the California Air Resources Board (ARB) adopted the Innovative Clean Transit regulation. The ICT regulation, which has been in development since spring 2015, requires small transit agencies to begin to purchase zero-emission buses (ZEBs) as soon as 2026, with the goal of transitioning all transit buses in California to zero-emission technology by 2040.
The regulation initially impacts standard transit buses, postponing the ZEB purchase mandate for non- standard buses (i.e. articulated, cutaway, over-the-road coaches) until at least 2026.
The main provisions of the ICT regulation are as follows:
- Individualized ZEB Rollout Plans: The regulation requires large and small transit agencies to develop and submit a ZEB rollout plan by July 1, 2020 and by July 1, 2023, respectively.
- ZEB Purchase Mandate: The regulation requires transit agencies to acquire a minimum number of ZEBs at the time of new bus purchases, based on the following schedules.
Large transit agencies:
- 2023: 25%
- 2026: 50%
- 2029 and After: 100%
Small transit agencies:
- 2023: N/A
- 2026: 25%
- 2029 and After: 100%
The regulation does not require the purchase of zero-emission articulated or cutaway buses or over-the-road coaches until at least 2026.
Importantly, state incentive funding, like HVIP, will only be available to transit agencies that purchase ZEBs before – or in excess of – the requirements established by the regulation.
- Statewide Thresholds: The regulation includes a mechanism for encouraging the early elective adoption of ZEBs and postponing the purchase mandate. Under this mechanism:
- If transit agencies statewide have 850 ZEBs in operation and/or on order by December 31, 2020, the 2023 purchase mandate impacting large transit agencies (noted above) would be postponed until 2024.
- And, if transit agencies statewide have 1,250 ZEBs in operation and/or on order by December 31, 2021, the 2024 purchase mandate impacting large transit agencies (noted above) would be postponed until 2025.
- Low NOx Requirement: The regulation requires transit agencies to purchase low NOx engines, if available, for conventional internal combustion engine bus purchases.
- Renewable Fuel Requirement: The regulation requires transit agencies to purchase renewable fuels when diesel or natural gas contracts are renewed.
The regulation authorizes transit agencies to request a one-year exemption from the ZEB purchase mandate to address the following issues:
- Delays in bus delivery or infrastructure buildout;
- The unavailability of ZEBs with sufficient range to meet a transit agency’s daily mileage needs;
- The unavailability of ZEBs that meet Americans with Disabilities Act requirements or any other federal, state or local law, regulation or ordinance; and,
- Financial hardship at the transit agency, including the inability to secure funding to offset the incremental cost of a ZEB over a conventionally-fueled equivalent bus.
The one-year exemption can be renewed by ARB’s Executive Officer if the issues persist.
The board resolution that accompanies the regulation directs ARB’s Executive Officer to provide the ARB Board with a comprehensive review of the regulation at least one year prior to the initiation of any ZEB purchase requirement. The comprehensive review will assess the following issues:
- Cost, performance and reliability of ZEBs;
- Availability of incentive funding;
- Infrastructure necessary to support ZEB deployment;
- Extent of job creation resulting from the rule;
- Deployment status of ZEBs and related technologies; and,
- Barriers to ZEB deployment.
The comprehensive review provides the ARB Board with an opportunity to adjust the ICT regulation, if necessary.
The Association is in the process of reconstituting its ZEB Task Force. This new iteration of the Task Force will be charged with providing technical guidance to Association staff on a multi-year educational program — for our members — to support implementation of the ICT regulation and will weigh in, as experts, on policy matters related to: ZEB funding and financing; the IOUs’ SB 350 programs; electricity rate design; and, workforce development and training.