SR-510-012 (9)
EPWM:CP:ADMIN\STAFFRPT\HYDROGENDEMONSTRATION.DOC
Council Meeting: October 26, 2004 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Negotiate and Execute an Agreement with the South Coast Air Quality
Management District to Participate in a Five Cities Hydrogen Vehicle
Demonstration Project
Introduction
This report recommends that City Council authorize the City Manager to negotiate and
execute an agreement with the South Coast Air Quality Management District
(SCAQMD) to participate in a five-year hydrogen vehicle demonstration project along
with four other Southern California cities. The goal of the demonstration project is to
integrate five zero-emission sedans into the City?s fleet to test their performance and
reliability in the context of normal field operations.
Background
In 1993, the City Council adopted an alternative fuels policy for the City?s vehicle fleet
which stated that whenever feasible, new fleet vehicles would be powered by
compressed natural gas (CNG), electricity or other environmentally preferable fuels.
The Sustainable City Plan that was adopted by Council in 1994 included a goal for the
miscellaneous fleet of 70 percent alternative fuel vehicles by the year 2000. To date,
this target has been achieved and surpassed, primarily through the procurement of
CNG vehicles. In addition, the Big Blue Bus has committed to the purchase of liquefied
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natural gas (LNG) buses whenever feasible and has recently completed the
construction of a combined LNG-CNG fuelling facility at the Big Blue Bus Yard. A
number of both dedicated electric and hybrid-electric vehicles have been procured by
the City and are operated by various City work units.
Staff continually explores and evaluates advancements in vehicle technologies and
alternative fuels and believes that significant benefit can be gained from introducing
hydrogen-fuelled vehicles into the fleet and determining how well they perform in a
?real-world? environment. Staff is also very interested in testing the emissions benefits
that can be obtained from the use of a hydrogen/CNG fuel mixture in some of the City?s
heavy-duty CNG vehicles since heavy duty vehicles comprise the major component of
the City?s overall vehicle fuel use. The proposed demonstration project with the
SCAQMD will allow Santa Monica to add clean-burning hydrogen to the broad palate of
gasoline and diesel fuel alternatives presently utilized by the City.
Earlier this year, staff proposed partnering with the SCAQMD and Toyota Motor Sales
on a 30-month demonstration project to test a single hydrogen fuel cell vehicle in City
operations. Council members expressed concerns at that time that the proposed City
share of total costs ($85,000) seemed too high for acquisition of a single hydrogen
vehicle and the City declined to participate in that project. In contract to the project
declined by the City, the five cities hydrogen vehicle demonstration project will convert
five hybrid Prius vehicles to hydrogen power and install a hydrogen fuelling facility at
the City Yard. The fuelling station will also enable the City to blend hydrogen fuel into
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some of the City?s heavy-duty CNG vehicles. Virtually all of the costs associated with
the project will be paid by the SCAQMD (approximately $850,000 for the fuelling
facility). Santa Monica?s out-of-pocket costs for the installation of the fuelling system
are estimated at no more than $100,000.
Discussion
Since 2002, staff has engaged in discussions with the SCAQMD related to the
procurement of dedicated hydrogen internal combustion engine sedans and the
construction of a hydrogen fuelling facility at the City Yard. In June of 2003, the
SCAQMD proposed a project that would include Santa Monica and four other Southern
California cities (Burbank, Riverside, Santa Ana and Ontario). The SCAQMD concept
is to contract with a vendor who would convert fleet vehicles in each city to use
hydrogen and to identify a group of contractors the cities could use to install fuelling
infrastructure. Selection among the contractors would depend on the unique project
goals of each of the cities.
Quantum Technologies will be responsible for the conversion from gasoline to
hydrogen as well as the testing, certification and maintenance of five Toyota Prius
vehicles that will be provided by each of the cities. The cost of these services will be
fully paid by the SCAQMD directly to Quantum Technologies. Santa Monica would
commit five 2004 Toyota Prius vehicles currently in the City fleet. The City would
operate these vehicles as a part of regular operations for a period of 60 months and
provide access to the vehicles by Quantum for periodic testing and maintenance.
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In regard to fuelling, Santa Monica?s sustainability objectives would argue for a
technology that achieves as close to zero emission as possible. This would involve a
fuelling system at the City Yard that extracts hydrogen from water through a proton
exchange membrane (PEM) electrolysis process using electricity that is 100% clean
and renewable from the current contract with Electric America that supplies electricity
to all City facilities.
The SCAQMD will pay the contractor selected by the City from those authorized for
costs related to the procurement and installation of the equipment needed for the
facility (estimated value of $850,000). The City?s obligation would be to provide a site
at the City Yard, facilitate project approvals and permitting for the facility, complete any
necessary site preparation and utility connection work, and pay for the electrical costs
of the system over the demonstration project period. City staff will assist in the
management and monitoring of the project over the demonstration period. Use of City
forces for most of the site preparation work will limit costs. It is anticipated that the
City?s direct out-of-pocket costs for construction of the fuelling facility will not exceed
$100,000 and will be borne by the Water, Wastewater and Refuse enterprise funds
since the hydrogen vehicles will be demonstrated in their field operations. It is
expected that the hydrogen vehicles and fuelling facility could be operational by mid-
2005.
The proposed hydrogen vehicle project will allow the City to strengthen its commitment
to the use of environmentally preferable alternative fuels for vehicles used in basic City
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operations, as well as place Santa Monica in a leadership position related to the
development of clean hydrogen-powered vehicles and a hydrogen fuelling
infrastructure. Such experience will allow Santa Monica to influence regulators, vehicle
manufacturers and fuel suppliers as major policy decisions on hydrogen vehicles are
made over the next several years. The demonstration project may also assist the City
in successfully competing with other public agencies for alternative fuel vehicle grants
and other financial resources, particularly as they may relate to future financial support
for hydrogen fuel use in heavy duty vehicles. Participation in the hydrogen vehicle
demonstration project will not diminish Santa Monica?s aggressive efforts to procure
additional dedicated electric, dedicated natural gas and hybrid-electric vehicles. The
staff recommendation was presented to the Task Force on the Environment for review
and discussion at their meeting of October 18, 2004. The Task Force unanimously
supported the proposed demonstration project as a reasonable next step in the City?s
testing of hydrogen vehicle technologies. The Task Force also recommended that City
staff aggressively pursue future hydrogen fuel options specifically related to heavy duty
vehicles in the City?s fleet.
Budget/Financial Impact
As vehicles will be converted at SCAQMD expense, the anticipated overall budget
impact to the City from the actions recommended in this staff report will not exceed
$100,000 for site preparation and utility connection work. Budgeted funds in this
amount are available in existing CIP and operating accounts of the Vehicle
Management Fund. Reimbursement for these costs will be made through the annual
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budget process by the Water, Solid Waste and Wastewater funds. Any ongoing costs
for operation of the fuelling facility (electricity, maintenance, etc.) will be included in the
next fiscal year budget for the Vehicle Management Fund and reimbursed by the three
enterprise Funds as noted above.
Recommendation
It is recommended that City Council authorize the City Manager to negotiate and
execute an agreement with the South Coast Air Quality Management District
(SCAQMD) to participate in a five cities hydrogen vehicle demonstration project.
Prepared by: Craig Perkins, Director, Environmental and Public Works Management
Renee Cowhig, Maintenance Manager
Rick Sikes, Fleet Maintenance Superintendent
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