SR 05-24-2016 3D
City Council
Report
City Council Meeting: May 24, 2016
Agenda Item: 3.D
To: Mayor and City Council
From: Edward King, Director, Big Blue Bus, Transit Maintenance
Subject: Purchase and Deliver Renewable Natural Gas (RNG) Fuel to Big Blue Bus
Recommended Action
Staff recommends that the City Council:
1. Award Bid #4228 to Clean Energy Fuels Corporation, a California-based company,
for the purchase and delivery of Renewable Bio-Liquid Natural Gas.
2. Authorize the City Manager to negotiate and execute an agreement with Clean
Energy Fuels Corporation for the purchase and delivery of Renewable Bio-Liquid
Natural Gas in the amount not to exceed $2,959,499, including a 10% contingency
for one year, with four additional 1-year renewal option(s) on the same terms and
conditions for a total not to exceed $17,671,997, with future year funding contingent
on Council budget approval.
Executive Summary
fleet of 198 motor coaches is powered by clean burning and
Renewable Natural Gas that is harvested and processed locally. The City of Santa
Monica is a nationally recognized leader for its sustainability policies and actions. BBB
alternative fuel and phasing out of diesel-fueled motor coaches. Staff recommends
award of Bid #4228 and to negotiate and execute an agreement with Clean Energy
Fuels Corporation (Clean Energy) for the purchase and delivery of Renewable Bio-
Liquid Natural Gas for a one year period in the amount of $2,959,499 with four
additional one-year renewal options, for an amount not to exceed $17,671,997 over a
five-year period.
Background
BBB currently operates 198 natural gas-powered transit coaches. The fuel used is
100% domestically produced, Renewable Bio-Liquid Natural Gas (RLNG). The fuel is
derived from harvested landfill methane. The use of RLNG significantly reduces harmful
greenhouse gas emissions
pollutants. The measure of emissions reductions involves calculating Low Carbon Fuel
Standard credits and greenhouse gas emissions.
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The Low Carbon Fuel Standard (LCFS) promotes the use of greenhouse gas reducing
transportation fuels (such as liquid biofuels, renewable natural gas, electricity, and
hydrogen) through a fuel-neutral declining carbon intensity standard, which is
administered by the California Air Resources Board. Carbon intensity is a measure of
the greenhouse gas (GHG) emissions associated with the production, distribution, and
to achieve the
GHG reductions at the lowest cost and in the most consumer-responsive manner, the
LCFS utilizes a market-based credit trading system to allow providers to choose how
they reduce emissions while responding to consumer demand.
The award of Bid #4228 to Clean Energy would enable the continued use of Renewable
Bio-Liquid Natural Gas to power transit buses and other City vehicles. It also provides
the City a share of the Low Carbon Fuel Standard (LCFS) credits from the producer,
Clean Energy, as a fixed discount on a per gallon basis. Clean Energy has provided
service since 2011 with exceptional service meeting all city specifications.
Discussion
The Environmental Protection Agency (EPA) sets the Carbon Intensity (CI) for each fuel
type. The CI number is the measurement of energy used to produce, process, deliver
and consume fuel and is the measurement of how clean the fuel is for the environment.
The RLNG that BBB uses to power the current fleet of 198 transit buses has a CI value
of 29.71, compared to Ultra-Low Sulfur Diesel CI value of 97.05 or conventional
Compressed Natural Gas (CNG) of 66.25. Staff recommends continued use of
Renewable Liquid Bio-Natural Gas that is 55.15% cleaner for the environment than
conventional CNG that derives from less sustainable methods.
Renewable Bio-Liquefied Natural Gas is non-fracked methane harvested from organic
waste in landfills. The process of harvesting and processing Renewable Methane Gas
provides a product that has fewer impurities than conventional natural gas and thus is a
cleaner burning fuel source. Historically, this gas has been burned off into the
atmosphere. However, with advances in renewable technology, the gas is now
harvested through a series of membranes implanted in the ground of landfills.
Renewable methane gas is processed through a filtration and refining process and
transported via pipeline to end users. As a result of the harvesting and filtration process
renewable methane gas has fewer impurities than conventional natural gas and thus is
a cleaner burning fuel source. Operating transit buses through this waste-to-energy fuel
source, BBB continues to contribute to fulfilling
environment by using the cleanest transportation fuel available.
Vendor/Consultant Selection
On February 4, 2016, the City published Notices Inviting Bids to furnish and deliver
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Renewable Liquid Bio-Natural Gas as required by the BBB Transit Maintenance
Division responsible for the fueling of transit buses in accordance with City
specifications. The bid was posted on Planet Bids, , in
accordance with City Charter and Municipal Code provisions. The City notified 337
vendors, of which, 18 vendors downloaded the bid. Three bids from two vendors were
received and publicly opened on February 23, 2016 per Attachment A. Bids were
evaluated based on the criteria in SMMC 2.24.072, including price, ability to provide a
share of LCFS credits, previous experience, ability to deliver RLNG with the lowest
greenhouse gas pathway to Santa Monica, ability to deliver RLNG from landfills with the
lowest Carbon Intensity, quality of product, and compliance with City specifications.
Includes, in the price per RLNG gallon, a fixed discount based on a share of
LCFS credits.
Conforms to City specifications.
Offers the lowest of the fixed-pricing bids in the base year and in the first option
year.
Enables the City to lock in fixed-pricing through the term of the contract which
would provide enhanced budgetary planning and cost forecasting.
Offers RLNG derived from landfills that produce RNG with lower Carbon
Intensity.
Includes use of that would emit 75%
less greenhouse gas emissions. Please see the table below:
RLNG Fuel Delivery Truck Greenhouse Gas Emissions
Number of RLNG fuel deliveries 312
Bidder GHG emission GHG Percentage
per delivery emission per Variance
year
75.81%
Clean Energy 210 65,520
Applied LNG 868 270,816
Variance 205,296 lbs GHG emissions
Based on the ability to provide RLNG fuel that meets City specifications, ability to
provide a share of LCFS credits, ability to provide the lowest Carbon Intensity fuel and
the ability to provide fuel deliveries with the least GHG emitted to atmosphere, Clean
fixed-price bid is recommended as best bid.
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The bid results as follows (includes an increase in usage due to anticipated service
changes):
Based on the following Usage:
per week 85,000
per year 4,420,000
Clean Energy Applied LNG
Base Year 2,690,454 2,943,720
Option Year 1 2,980,484 2,987,920
Option Year 2 3,315,000 3,036,540
Option Year 3 3,445,390 3,085,160
Option Year 4 3,634,124 3,138,200
Total 5-Year 16,065,452 15,191,540
Clean Energy Variable Pricing Bid:
An alternate bid from Clean Energy, a variable pricing per RLNG gallon model, includes
a discount based on monthly market pricing of Low Carbon Fuel Standard (LCFS)
credits. The variable-priced bid is based on the monthly market pricing of LFCS credits.
Due to market variability of LCFS credits, the monthly market fluctuations will make
budgeting and long-term cost forecasting unmeasurable. The Clean Energy variable
pricing bid is not recommended.
Protest
On March 5, 2016
bidding site, putting all bidders on
Agent received a timely protest from Applied LNG.
On March 25, 2016, after review of the protest documentation submitted, and speaking
with BBB staff who had conducted the bid review and selection process, the Purchasing
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Agent denied the protest based on lack of evidence and grounds for protest.
s
decision to the Finance Director. The appeal made claims almost identical to those set
forth in the original protest letter.
and all the documentation submitted by Applied LNG, the Finance Director upheld the
ion to deny the protest, staff
recommends that Bid #4228 be awarded to Clean Energy. Alternatively, Council may
reject all bids, and, in its discretion, instruct staff to re-advertise for the work.
Based on the criteria stated above, it is recommended that the best bidder is Clean
Energy with its alternative fixed-price bid response for an amount not to exceed
$17,671,997, including a 10% contingency, over a five-year period. The 10%
contingency is for unanticipated increase in revenue service miles with Expo service.
Breakdown of pricing with Clean Energy:
Contingency (10%) Total
Base Year $ 2,690,454 $ 269,045 $ 2,959,499
Renewal Option 1 $ 2,980,484 $ 298,048 $ 3,278,532
Renewal Option 2 $ 3,315,000 $ 331,500 $ 3,646,500
Renewal Option 3 $ 3,445,390 $ 344,539 $ 3,789,929
Renewal Option 4 $ 3,634,124 $ 363,412 $ 3,997,536
$ 17,671,997
Financial Impacts and Budget Actions
The agreement to be awarded to Clean Energy Fuels Corporation is for an amount not
to exceed $17,671,997. Funds of $2,959,499 are available in the FY 2016-17 Proposed
Budget in the Big Blue Bus Department. The agreement will be charged to account
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41654.522974. Future year funding is contingent on Council budget approval.
Prepared By:
Getty Modica, Transit Maintenance Officer
Approved Forwarded to Council
Attachments:
A. 4228 RLNG BID RESULTS - Attachment A
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ATTACHMENT A
BID CLOSE DATE:2/23/2016
BID #: 4228ATTACHEMENT A - BID RESULTS
BID DESCRIPTION:
FURNISH AND DELIVER RENEWABLE LIQUEFIED
APPLIED LNGCLEAN ENERGYCLEAN ENERGY - ALTERNATE BID
NATURAL GAS (RLNG) AS REQUIRED BY THE BIG
BLUE BUS.
WESTLAKE VILLAGE, CANEWPORT BEACH, CANEWPORT BEACH, CA
Cost/Factor
Option year Option year Option year Option year Option year Option year Option year Option year Option year Option year Option year Option year
No. DescriptionBase Year 1234Base Year 1234Base Year 1234
So Cal Monthly Index: $US/MMBtu (FERC)
1(for bid purposes, as of September 2015)2.7102.7102.7102.7102.7102.7102.7102.7102.7102.7102.712.712.712.712.71
Conversion From: MMBtu to RLNG Gal factor
2(fixed) 12.112.112.112.112.112.112.112.112.112.112.112.112.112.112.1
30.2240.2240.2240.2240.2240.22390.22390.22390.22390.22390.22390.22390.22390.22390.2239
4Liquefaction (fixed) Per RLNG Gallon0.3200.3300.3390.3500.3600.48200.49200.51100.53800.57700.48200.49200.51100.53800.5770
-----
5Markup/Discount (fixed) Per RLNG Gallon-0.204-0.204-0.204-0.204-0.204-0.15-0.10-0.05-0.05-0.05
6Delivery Fee Per RLNG Gallon0.100.100.100.100.100000000000
7Sales Tax 9.50% (applicable)0.0520.0530.0540.0540.0550.04770.04860.05040.05300.05670.05280.05850.06510.06760.0713
All RLNG AB32 compliance costs shall be paid
8by the bidder. Can bidder comply? Yes/NoYesYesYesYesYesYesYesYesYesYesYesYesYesYesYes
9Including Commodity and Taxes) 0.6960.7060.7170.7280.0740.54960.56050.58130.61090.65360.60870.67440.75000.77950.8222
Other Pricing And Criteria
Option year Option year Option year Option year Option year Option year Option year Option year Option year Option year Option year Option year
No. DescriptionBase Year1234Base Year1234Base Year1234
LCFS revenue share (Per Minimum $0.03 Per $0.03 Per $0.03 Per $0.03 Per $0.03 Per $0.204 Per $0.204 Per $0.204 Per $0.204 Per $0.204 Per $0.15 Per $0.10 Per
$0.05 Per $0.05 Per $0.05 Per
10Requirements section 3.)gallongallongallongallongallonRLNG gallonRLNG gallonRLNG gallonRLNG gallonRLNG gallonRLNG gallonRLNG gallonRLNG gallonRLNG gallonRLNG gallon
Miles from Liquefaction plant to the City
11Santa Monica Big Blue Bus 288 Miles288 Miles288 Miles288 Miles288 Miles124 Miles124 Miles124 Miles124 Miles124 Miles124 Miles124 Miles124 Miles124 Miles124 Miles
12operate on RLNG/LNG? Yes/NoYesYesYesYesYesYesYesYesYesYesYesYesYesYesYes
Greenhouse Gas Intensity (Per Minimum
Requirements section 5.) Note: Lowest 5.28 5.28 5.28 5.28 5.28 15.84 15.84 15.84 15.84 15.84 15.84 15.84 15.84 15.84 15.84
13greenhouse gas intensity is preferred.lbs/gallonlbs/gallonlbs/gallonlbs/gallonlbs/gallongCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJ
Ability to provide LCFS emission credits to Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
City of Santa Monica. Provide a yes/no and /quantity /quantity /quantity /quantity /quantity /quantity /quantity /quantity /quantity /quantity /quantity /quantity /quantity /quantity
/quantity
14quantity.100%100%100%100%100%100%100%100%100%100%100%100%100%100%100%
Carbon intensity value for the proposed
RLNG pathway(s) (Per Minimum 15.84 15.84 15.84 15.84 15.84 15.84 15.84 15.84 15.84 15.84
15Requirements section 3.)27.4527.4527.4527.4527.45gCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJgCO2e/MJ
Minimum guaranteed biomass or biogenic
content for the supplied RLNG. (Per
16Minimum Requirements section 4.)100%100%100%100%100%100%100%100%100%100%100%100%100%100%100%
10,000 LNG 10,000 LNG 10,000 LNG 10,000 LNG 10,000 LNG 10,000 LNG 10,000 LNG 10,000 LNG 10,000 LNG 10,000 LNG
17Tank Trailer Capacity:10,00010,00010,00010,00010,000gallonsgallonsgallonsgallonsgallonsgallonsgallonsgallonsgallonsgallons
ATTACHMENT A
BID CLOSE DATE:2/23/2016
BID #: 4228ATTACHEMENT A - BID RESULTS
BID DESCRIPTION:
FURNISH AND DELIVER RENEWABLE LIQUEFIED
APPLIED LNGCLEAN ENERGYCLEAN ENERGY - ALTERNATE BID
NATURAL GAS (RLNG) AS REQUIRED BY THE BIG
BLUE BUS.
WESTLAKE VILLAGE, CANEWPORT BEACH, CANEWPORT BEACH, CA
Other
ResponseResponseResponse
PAYMENT TERMSNet 30Net 30Net 30
PLEASE DESCRIBE ANY ADDITIONAL FEES &
CHARGES NOT LISED ABOVE
NoneNoneNone
PERIOD 2 (FIRST ANNUAL RENEWAL OPTION)3% IncreaseSame price, terms and conditionsSame price, terms and conditions
3% IncreaseSame price, terms and conditionsSame price, terms and conditions
PERIOD 3 (SECOND ANNUAL RENEWAL OPTION)
PERIOD 4 (THIRD ANNUAL RENEWAL OPTION)3% IncreaseSame price, terms and conditionsSame price, terms and conditions
3% IncreaseSame price, terms and conditionsSame price, terms and conditions
PERIOD 5 (FOURTH ANNUAL RENEWAL OPTION)
OAKSCompleteCompleteComplete
CompleteCompleteComplete
ARIZONA
IS VENDOR PHYSICALLY LOCATED IN SANTA
MONICA?
No No
DOES VENDOR PHYSICALLY COME INTO THE CITY OF
SANTA MONICA TO CONDUCT BUSINESS AND/OR
MAKE DELIVERIES?YesYes
Exceptions to specifications - delivery requirements and product
OTHER
specifications
Reference:
Agreement
No.
10305
(CCS)