COMMISSIONERS OF PUBLIC WORKS Minutes of May 10, 2012

Transcription

1 COMMISSIONERS OF PUBLIC WORKS The regular meeting of the Board of Commissioners of Public Works was held on Thursday, May 10, 2012 at 10:00 a.m., in the Boardroom at 121 West Court Avenue. In attendance: Gene P. Hancock Steve D. Reeves, Jr. Teresa Lake Bill Patrick Michael G. Monaghan Ken Barnett Greg Shaw Stacia May Henry O. Watts Jerry Smith Jeff Chapman Chris Trainor Carlos Cometto Richard Gentry David Tuck Chris Lindley George Petersen Cary Bishop Jeff Meredith Vicki Knott Wayne Bartley I. Chairman Monaghan called the meeting to order. The invocation was given by Commissioner Watts. II. III. Chairman Monaghan gave the statement of compliance with the notification provision of the Freedom of Information Act. Business: A. Manager Reeves presented a recommendation to accept the low bid from Hendrick Motors of Charlotte, for a meter test truck, in an amount not to exceed $48,875. A motion was made by Commissioner Hancock, seconded by Commissioner Watts, and unanimously approved. B. Mr. Smith provided an updated presentation on compressed natural gas vehicles (CNG). He noted that a number of the obstacles and uncertainties with compressed natural gas vehicles had been resolved since the presentation back in October of He stated that one obstacle that remains is that if there are to be customers using natural gas vehicles, there have to be filling stations. CPW needs to demonstrate their commitment to operating and maintaining CNG vehicles for their own fleet and fueling stations to fuel those and public vehicles. He pointed out that an investment would have to be made in vehicles for CPW; we would have to advertise our efforts to develop and provide CNG capability; identify, develop, and invest in locations for filling stations; target likely customers, such as City of Greenwood, and private entities such as Fuji, Velux, UPS, etc. All of these would stimulate interest with retail customers who would recognize CPW

2 Page 2 would be available as an alternative to a gas station. Mr. Smith continued with the disadvantages of CNG vehicles, being the up-front costs for vehicle conversion. He added that has now changed; the cost of conversion in the past was upwards of $15,000 and may or may not work well. He noted that manufacturers are coming out now with bi-fuel CNG vehicles, with an up charge of around $11,000 for a truck. He shared that the cost for infrastructure to build filling stations is roughly $500,000 for a fast-fill station. He then gave the advantages: lower fuel cost by approximately half; reduces emissions; reduces maintenance and extends engine life because the engines burn cleaner; utilizes an abundant domestic energy resource and reduces dependence on foreign oil; allows for replacement of high-emission diesel engines with low-emission CNG/gasoline engines; could avoid the need to invest money to expand COC diesel fuel storage capacity; and increases natural gas sales. Chairman Monaghan asked about the $11,000 for the vehicles and if that would ever be recovered; Mr. Smith responded that Piedmont Natural Gas had their vehicles converted and then flips those vehicles after two or three years. They pay the $11,000 and use the vehicle for two or three years; when they sell the vehicle, the residual value is higher because of the CNG capability, so they can capture the premium when the vehicle is sold and recover the money that is then re-invested in newer vehicles. He noted that there is a secondary consequence with the replacement vehicle that is purchased because it is then burning CNG, and the other vehicle that was sold is presumably out in the community burning CNG. Mr. Smith then provided information on CNG-ready vehicles from original equipment manufacturers (OEM), noting that most are not suitable for our purposes. Chairman Monaghan pointed out that the more natural gas consumption there is, the more likely that the price of gas could go up. Mr. Smith responded that could ultimately happen, adding that at the current time gas is at $2.50, and $3.50 next year. How long that will last is unknown, but the spread between gas and gasoline will probably stay as it is. Mr. Smith continued that there are more suitable vehicles available through original equipment manufacturers now that come with a factory warranty. Chrysler and GM have announced that they are coming out with ¾-ton trucks, which can be used as service trucks. Ford will have a ½-ton truck, which could be used for locators, meter readers, etc. He suggested that a policy be established for the purchase of CNG vehicles that would require bi-fuel capability and that these vehicles be purchased through an OEM. He then provided slides of CNG vehicles currently available. He noted that Mr. Gentry had come up with some possible markings for CPW CNG vehiclesfor the gas, electric, and water departments. Commissioner Hancock pointed out that electric vehicles should also be included. Mr. Smith recommended purchasing high-visibility CNG vehicles to be used as mobile advertising as follows: mail vehicle; COC

3 Page 3 pool vehicle; meter reader truck; gas department truck; and locator vehicle. Mr. Smith noted some potential customers, including public entities, such as the City, County, and Greenwood Metro; private industry, such as private trash services, UPS, Velux, Fuji, and local contractors with vehicle fleets. He shared an outreach plan for potential customers where lunch would be provided, they would highlight progress, and enlist customer participation. Other ways to communicate the initiatives would be through highly visible graphics on CPW vehicles; newspaper advertising; billing inserts direct mail; public access television; website; and at public events. Mr. Smith noted that slow fill stations are relatively inexpensive costing $10,000 to $100,000, and are suitable for overnight fill. He reported that these tend to fill the tank more fully, and only one to two vehicles can be filled overnight. He pointed out that fast-fill is similar to a gasoline filling station where you can pull up and spend three to four minutes, but would not be completely full. He then reported that fast-fill stations have the same configuration as slow-fill, but with a bigger compressor and a couple of storage tanks. Mr. Smith provided possible locations for filling stations for slow and fast-fill stations. He stated that the thought at this time is to develop one off-site slow fill station (for trash services, Fuji, UPS, etc.); and develop both a slow-fill and a fast-fill station at the COC for CPW vehicles. Other possible sites include the old propane plant on Mathis Road, and property on the 72 Bypass. He then provided a couple of different scenarios for filling stations at the COC. Mr. Smith noted additional considerations including: the need to use the gasoline quickly because it can cause problems if it sits in the tank for a couple of months; the CPW s rate of attrition with vehicles is slow, vehicles are not replaced that often; only 60-70% of a CNG fuel tank capacity is usable with fast fill; and no tax incentives in South Carolina. He shared additional challenges of a filling station at the COC as: the need to resolve siting and ingress/egress issues; developing a detailed cost estimate; and determining parasitic costs for power to operate compressors and how to allocate those costs. He added that tariffs would have to be developed for natural gas service where a customer would install and operate slow-fill stations on their property, and also for retail natural gas service where the customer fills up at the CPW fast-fill station. They would also have to account for applicable road and highway taxes, and determine how to collect and pay those taxes. Finally, a policy would need to be adopted for the purchase of OEM bi-fuel CNG vehicles, and there would need to be a mobile re-fill capability for stranded CNG vehicles. Mr. Smith provided budget estimates for initial cost for fast and slow-fill stations at the COC of approximately $550,000. Two dedicated CNG vehicles would cost around $60,000, and three bi-fuel vehicles would be around $120,000. Mobile re-fill capability is estimated to cost $20,000; advertising, vehicle marking, and signage are approximately $100,000, for a

4 Page 4 total investment of around $850,000. The cost for additional vehicle replacement through attrition would be $100,000 per year. Mr. Smith provided an estimated schedule with plans and specifications developed for filling stations this quarter and next; next, begin conducting customer outreach meetings; purchase vehicles; construct filling stations, and operation of filling stations by the middle of Mr. Smith concluded by recommending (1) working with private trash service to develop a plan for slow-fill station installation, with a tariff in place for CNG sales service; (2) developing and finalizing siting considerations and detailed cost estimate for a combination slow-fill and fast-fill station at the COC. Developing plans/specifications, and issue RFP for construction; (3) focusing on CNG visibility and community outreach by acquiring a small number of selected, high-visibility CNG vehicles; hosting customer outreach meetings; adding CNG vehicle information section to the CPW website; and (4) continuing to replace CPW vehicles with CNG bi-fuel vehicles on an attrition basis and maintaining distinctive marking of vehicles. Manager Reeves asked for guidance from the Commissioner with regard to whether they want to move forward. He stated that around $200,000 was identified from the bond issues for this project if the desire is to keep moving forward. If they want to go long term, we are looking at the possibility of another bond issue in the next couple of years for water projects, and additional funding could be incorporated for this project. Chairman Monaghan stated that since CPW is the only one in the community that could do this, there is a certain amount of obligation to move ahead. Manager Reeves proposed that they come back later with more budgetary numbers and how to get started with the funding aspect. IV. Other Business: 1. Commissioner Watts inquired about providing fiber and phone service to Greenwood County. Mr. Meredith responded that the fiber actually comes through the exchange of checks with the City; the City and County jointly share this through an agreement. He added that the phone lines are still going through our main switch. 2. Mr. Gentry reported that CPW would have a booth at the GLEAMS Community Action Day on May 19, at the May Complex.

5 Page 5 V. Executive Session: A motion was made by Commissioner Hancock and seconded by Commissioner Watts to go into Executive Session for contractual matters; the motion was unanimously approved. VI. With no further business, the meeting was adjourned. Approved:, 2012 Secretary