HomeMy WebLinkAboutItem 12j - Purchase of Compressed Natural GasPurchase Order for CNG Fuel
June 4, 2024
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DATE: June 4, 2024
TO: Honorable Mayor and City Council
FROM: Paul Cranmer, Public Works Services Director
By: Daniel Vargas, Management Analyst
SUBJECT: PURCHASE ORDER WITH CLEAN ENERGY FOR THE PURCHASE OF
COMPRESSED NATURAL GAS (“CNG”) FUEL FOR THE CITY’S FLEET
IN AN AMOUNT NOT TO EXCEED $150,000
CEQA: Not a Project
Recommendation: Approve
SUMMARY
The City primarily utilizes the Compressed Natural Gas (“CNG”) fueling station located at
the Foothill Transit Center, operated by Clean Energy, to fuel its CNG vehicles. The
Purchase Order with Clean Energy expires on June 30, 2024. It is recommended that the
City Council approve a sole source Purchase Order with Clean Energy for the purchase
of CNG fuel for the City’s fleet, in an amount not to exceed $150,000 for Fiscal Year 2024-
25.
BACKGROUND
The Public Works Services Department (“PWSD”) has been strategically replacing
vehicles that meet the City’s Vehicle Replacement Policy criteria with alternative fuel
vehicles such as CNG, Hybrids, and Electric vehicles. This approach has allowed the City
to be compliant with the Air Quality Management District’s mandates that heavy duty
equipment be replaced with alternative fuel vehicles, as well as reducing Arcadia’s overall
fuel costs and greenhouse gas emissions. The PWSD is responsible for the purchase of
CNG fuel and currently operates a fleet of 15 heavy-duty CNG vehicles, which includes
three street sweepers, one aerial lift truck, two dump trucks, one water tanker truck, two
sewer jetter vacuum trucks, one hydro-excavator truck, and five one-ton pickup trucks.
DISCUSSION
The PWSD utilizes two local CNG public fueling stations to fuel all City CNG vehicles.
The first station, owned by Foothill Transit, is located less than one-half mile from the
Public Works Service Center. The second station, owned by the City of Pasadena, is
located on Foothill Boulevard, west of City limits. Clean Energy is the sole source of CNG
fuel and the service provider for both of these fueling stations. There are no other viable
Purchase Order for CNG Fuel
June 4, 2024
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CNG fueling stations in the immediate area. Therefore, utilizing a sole source purchase
order is necessary.
The PWSD has vehicle fueling cards provided by Clean Energy and is invoiced monthly
for fuel purchased at these two stations. It is estimated that the PWSD will use
approximately 27,800 Gasoline Gallon Equivalents (“GGE”) of CNG by the end of Fiscal
Year 2023-24. This usage reflects a 9.41% increase from the previous fiscal year. Based
on month-to-month changes in CNG usage during Fiscal Year 2023-24, a 6% annual
increase is projected for Fiscal Year 2024-25. The total expected usage of CNG for Fiscal
Year 2024-25 is 29,475 GGEs.
Although CNG fuel prices are typically less volatile than other fuels, the price per GGE of
CNG has increased steadily in recent years. During FY 2023-24, the City paid on average
$5.08 per GGE, which includes state fuel tax fees, as compared to $5.51 in FY 2022-23,
and $4.35 in FY 2021-22. The cost of CNG fuel is expected to decrease in FY 2024-25,
as seen in recent monthly transactions; however, price spikes can occur and are not
uncommon. It is recommended that the Fiscal Year 2024-25 Purchase Order reflect the
estimated average cost of $5.08 per GGE for the expected 29,475 GGEs of CNG. Given
that, at least $149,733 will be needed to cover the expected costs.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental
Quality Act (“CEQA”), as it can be seen with certainty that it will have no impact on the
environment.
FISCAL IMPACT
The request is to purchase CNG fuel for the City’s fleet in an amount not to exceed
$150,000. Sufficient funds will be appropriated in the Department’s proposed Fiscal Year
2024-25 Operating Budget for the purchase of CNG fuel.
RECOMMENDATION
It is recommended that the City Council determine that this action does not constitute a
project under the California Environmental Quality Act (“CEQA”); and approve a Purchase
Order with Clean Energy for the purchase of Compressed Natural Gas (“CNG”) fuel for
the City’s fleet, in an amount not to exceed $150,000.