SR-510-012 (8)
CP:CP\EPWM\ADMIN\STAFFRPT\HYDROGENVEHICLES.DOC
Council Meeting: February 24, 2004 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Negotiate and Execute an Agreement with the Air Quality
Management District and Toyota Motor Sales, USA for a
Hydrogen-Powered Fuel Cell Vehicle Demonstration Project
INTRODUCTION
This report conveys the results of discussions held with the City?s Environmental
Task Force concerning a hydrogen fuel cell vehicle demonstration project and
recommends that City Council authorize the City Manager to negotiate and
execute an agreement with the Southern California Air Quality Management
District (SCAQMD) and Toyota Motor Sales, USA at a significantly lower net
project cost to the City than had been previously anticipated.
BACKGROUND
Staff originally presented the fuel cell vehicle demonstration program to Council
at their meeting of January 13, 2004 (staff report attached). A few members of
the public gave input at that time about their concerns that the development of a
zero emission hydrogen vehicle program by the City would diminish the City?s
commitment to procuring zero emission electric vehicles. Opinions were also
expressed by some of the public speakers that hydrogen fuel cell vehicles were
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not as efficient as electric vehicles in terms of their overall energy inputs and
outputs. Some members of the City Council expressed additional concerns that
the proposed project was too expensive when compared to the benefits that the
City would derive from the project. After this discussion, Council directed staff to
discuss the proposal with the Environmental Task Force (ETF) and interested
members of the public and return to Council with results of that dialog. This
report presents a summary of the ETF discussion as well as information on the
revised budget for the proposed project that includes a lower cost for Santa
Monica.
DISCUSSION
Environmental Task Force Input
A discussion of this proposal was added to the agenda of the ETF meeting of
January 26, 2004. Members of the public attended the meeting and expressed
their views on the proposed demonstration program as well as the future
prospects for dedicated electric, hydrogen fuel cell and other vehicle
technologies such as hybrid engines. After an in-depth discussion, the ETF
members voted to recommend that City Council authorize the lease of the
hydrogen fuel cell vehicle from Toyota provided that during the lease period the
City completes a ?scientific? comparison of the efficiency, emissions and
operation of the vehicle with other alternative fuelled vehicles within its fleet. The
ETF also recommended that within 90 days EPWM staff should return to the
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Task Force with a plan to maximize the number of zero emission vehicles within
the City fleet, and that the lease agreement with Toyota should specify that the
hydrogen fuel be transported to Santa Monica using an alternative fuel vehicle.
In terms of the first recommendation, staff is confident that an appropriate level
of technical analysis can be performed by staff within existing budget authority to
compare the overall performance between the proposed hydrogen fuel cell
vehicle and various other alternatively fuelled City vehicles. Such an analysis
should assist the City, SCAQMD and other communities in future decisions
regarding vehicle technology. Staff will also prepare an information report for
Council within the next 60 days describing current and prospective City efforts to
maximize the procurement of zero emission vehicles (including dedicated
electric vehicles) for the City?s fleet. In fact, Fleet Management personnel are
now confident that they will be able to extend the nearly expired leases on the
City?s 13 Toyota RAV4 dedicated electric vehicles for up to an additional two
years. Other zero emission vehicle initiatives are being explored by staff and will
be described in the follow-up report. At the ETF meeting, staff emphasized that
the proposed hydrogen vehicle demonstration program would in no way diminish
the City?s interest in and commitment to procuring additional dedicated electric
zero emission vehicles, but would in fact be complementary to the City?s electric
vehicle program.
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The last ETF recommendation is problematic since the hydrogen fuel that will be
used in the project will not be produced by Toyota but rather by a separate
vendor. The company that will produce the hydrogen and transport it to Santa
Monica does not have access to an alternatively fuelled vehicle of sufficient size
and power to handle the task. But, since the use of delivered hydrogen is
envisioned as just a temporary source of supply until the City is able to build its
own hydrogen fuelling facility at the City Yard as a part of a joint project with the
SCAQMD, staff does not believe that the use of a conventionally fuelled
transport truck is an issue that merits significant concern. Specific information on
the proposed hydrogen fuelling facility project at the City Yard will be presented
to Council at a future date after SCAQMD and City staff have completed their
discussions and reviewed all of the available funding options.
Benefits of the Proposed Hydrogen Vehicle Demonstration Program
The proposed hydrogen fuel cell vehicle partnership with Toyota and the
SCAQMD would benefit the City by allowing fleet maintenance staff and field
operations staff to gain invaluable experience in an emerging technology that
could become the future vehicle technology of choice. By becoming an early
adopter of fuel cell vehicle technologies, Santa Monica will be well-positioned to
influence regulators, vehicle manufacturers and fuel suppliers as major policy
decisions are made over the next several years that will impact the nature and
cost of future City operations. Early adoption may also assist the City to
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successfully compete with other public agencies in obtaining future grants and
other financial resources. Such a proactive approach would be very similar to
that taken by Santa Monica with respect to natural gas vehicles, an area in
which Santa Monica is widely acknowledged as a national leader. Most
importantly, the proposed demonstration program will reduce the City?s air
pollution and greenhouse gas emissions.
BUDGET/FISCAL IMPACT
In the original proposal presented to Council on January 13, the City?s projected
net cost was estimated as not to exceed $200,000. Through a combination of
additional negotiations with Toyota and further clarification of the cost sharing
between Toyota and the SCAQMD, City staff has been able to achieve a
significantly lower net project cost. The total estimated cost for the proposed
project (both vehicle and fuel) is $415,000. The SCAQMD has agreed to
reimburse $130,000 and Toyota has agreed to reimburse $200,000 of this cost.
The net cost to the City?s Vehicle Management Fund will be $85,000.
It is proposed that this $85,000 cost be shared equally by three enterprise funds:
Water, Wastewater and Refuse from their already budgeted vehicle replacement
CIP funds so that each of these three operations can gain valuable first-hand
experience with an important emerging vehicle technology. Each of these three
funds will also benefit from an accelerated reduction in the use of gasoline and
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diesel fuels as well as engine motor oil that are primary sources of
contamination that must currently be addressed by our water, wastewater and
solid waste management operations.
Funds are available for the proposed fuel cell vehicle project with Toyota and the
SCAQMD in the amount of $85,000 from the following accounts:
C27016704-589000 $28,333
C25016704-589000 $28,333
C31016704-589000 $28,334
RECOMMENDATION
It is recommended that City Council authorize the City Manager to negotiate and
execute an agreement with the Southern California Air Quality Management
District and Toyota Motor Sales, USA for a hydrogen-powered fuel cell vehicle
demonstration project as described above.
Prepared by: Craig Perkins, Director, Environmental and Public Works Management
Attachment: Staff report from City Council meeting of January 13, 2004
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