Meeting_Body
OPERATIONS, SAFETY, AND CUSTOMER EXPERIENCE COMMITTEE
SEPTEMBER 19, 2024
Subject
SUBJECT: ZERO EMISSION BUS (ZEB) PROGRAM UPDATE
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE status report on the ZEB Program in response to Motion 31.1.
Issue
ISSUE
At its April 2024 meeting, the Board approved Motion 31.1 (Attachment A) by Directors Yaroslavsky, Bass, Krekorian, Dupont-Walker, and Solis, which reaffirmed its commitment to transitioning Metro’s bus fleet to zero-emission by 2030. The Motion directed staff to report back to the Board at its September 2024 meeting with a more detailed plan to deliver a 100% zero-emission bus fleet. Staff has prepared a more detailed plan that also ensures Metro’s ability to continue providing reliable bus service, including availability of operations and maintenance funding to support the full seven million annualized revenue service hours as planned through the NextGen Bus Plan.
Background
BACKGROUND
In July 2017, the Board approved Motion 50 by Directors Bonin, Garcetti, Najarian, Hahn, and Solis (Attachment B), which endorsed a ZEB Strategic Plan to transition Metro’s entire bus fleet to zero-emissions by 2030. This was contingent on cost and performance equivalence with Compressed Natural Gas (CNG) buses and continued advancements in charging infrastructure. In 2018, the California Air Resources Board (CARB)’s Innovative Clean Transit (ICT) regulation mandated that all transit agencies in the state operate zero-emission fleets by 2040. In addition, ICT ZEB purchase requirements for large transit agencies require 25% of bus purchases to be zero emissions by 2023, 50% by 2026, and 100% by 2029. Metro has met all state-mandated program requirements a decade earlier than the ICT mandate of 2029. In September 2019, Metro awarded its final option for CNG buses and committed to having 100% zero emissions in all future procurements. Furthermore, since October 2020, Metro has powered its bus fleet with 100% Renewable Natural Gas.
Since the Board endorsed the ZEB Strategic Plan, Metro prepared a ZEB Program Master Plan in 2022 and a Master Plan Update in 2023. In 2021, Metro electrified the G Line, which has accumulated more than five million miles of zero-emission service, the most miles by any public transit agency in the U.S., however, it is experiencing chronic reliability issues. The electrification of the J Line is also underway, with both the Harbor Gateway Transit Center scheduled for completion, and civil construction at Division 9 and the El Monte Transit Center to begin this fall. Metro expects to release a Progressive Design Build (PDB) solicitation for Divisions 18 & 7 in the second quarter of FY25. In April 2024, Metro released the largest solicitation for ZEBs in U.S. history, with a base order of 260 battery electric buses (BEBs) and 20 hydrogen fuel cell electric buses (FCEBs), with options to purchase up to 1,160 ZEBs. In July 2024, Metro increased the solicitation option amounts, allowing purchases of up to 1,980 ZEBs and requesting that Original Equipment Manufacturers (OEMs) propose an alternative base order quantity. Proposals are due in September.
Despite progress, the U.S. ZEB industry has neither evolved nor matured to the extent necessary to meet the complete fleet transition by the 2030 goal. In the April 2024 ZEB Program Update (Attachment C), staff identified several challenges (e.g., program cost and funding, technology performance, grid capacity, and U.S. supply chain constraints), which demonstrate that cost and performance parity with CNG buses has yet to materialize and that technology advancements are not projected to meet the necessary thresholds for the 2030 goal. Over the last six months, New Jersey Transit, Houston Metro, CapMetro Austin, and Seattle’s Sound Transit have announced scaling back their 2030 ZEB goal given the state of the industry - in some instances, they have elected to order more diesel buses.
Discussion
DISCUSSION
Plan to Deliver 100% ZEB Fleet
Staff have prepared a ZEB Program Project Map (Attachment D), which illustrates electrification project sites, and a ZEB Program Division Electrification Detailed Schedule (Attachment E), which outlines the program phasing sequence inclusive of milestones for division electrification. The division electrification schedule details anticipated timelines for project phases, including Requests for Proposals (RFPs), design, and construction.
The Detailed Schedule anticipates that in 2030, five bus Divisions (9, 18, 7, 5, and 13) will be electrified, as will opportunity charging sites (also known as on-route charging) to support battery electric operations of the North San Fernando Valley (NSFV) Transit Improvements Project, North Hollywood to Pasadena Bus Rapid Transit (BRT), J Line, and the Vermont Transit Corridor BRT. Staff also anticipates that by 2030, Metro’s bus fleet will surpass 30% zero emissions. The table below illustrates milestones by year through the completion of the transition.
|
Division and Fleet Electrification Milestones |
|
Year |
Number of Divisions Electrified |
Fleet of Zero Emission Buses (# / %) |
|
2028 |
3 |
256/12% |
|
2030 |
5 |
647/30% |
|
2032 |
7 |
1,175/55% |
|
2034 |
9 |
1,709/80% |
|
2035 |
10 |
2,130/100% |
Attachment F outlines Metro’s approach to ZEB program project delivery as well as discusses Unsolicited Proposals received and the agency’s evaluation of Charging-as-a-Service to date.
Utility Capacity Upgrades
In addition to the weak manufacturing pipeline, the availability of existing utility power and needed capacity upgrades are major schedule risks for delivering the ZEB program on time. Studies conducted by the California Independent System Operator have shown that the entire California electric grid is undersized by two to three Terawatts and not ready to support a large-scale adoption of zero-emission vehicles.
A key lesson learned from the electrification work to date is that Metro will require substantial utility capacity upgrades at its divisions and opportunity charging sites. This was derived from insights from advancing designs at Division 9 and 18, as well as developing conceptual designs for the remaining divisions, in addition to the advanced coordination with Southern California Edison (SCE) and (LADWP). Metro has submitted service requests to SCE for Division 9, and staff anticipates making service requests for 18 and 7 once each division reaches an 85% level of design, which is expected in Q2 and Q4 FY26. SCE has already reserved 6 Megavolt-Ampere (MVA) for Division 18. However, they cannot proceed with upgrades until Metro advances design to a better-defined scope in FY26.
Firm utility service requests require detailed project information, such as charging equipment power output and the number of charging positions at each site, which Metro will not know until upgrades reach a more advanced level of design (typically 85%). While Metro has delivered power need forecasts to both SCE and LADWP, including worst-case and charge management scenarios, firm calculations cannot be provided until the charging equipment is specified and nameplate power ratings are available. Fortunately, additional charge management scenario analysis suggests that capacity upgrades may be less extensive than previously anticipated, reducing utility capacity scope and timelines.
However, in the near term, Metro is preparing several service requests to LADWP for sites that will support the NSFV, North Hollywood to Pasadena BRT, and North Hollywood Transit Center redevelopment projects. While preliminary, these requests will be based on worst-case power needs, will allow LADWP to evaluate existing grid capacity, and result in developing collaborative strategies that ensure timely/cost-effective upgrades. The charging equipment will be purchased under a new procurement, although nameplate information is currently unavailable. Staff have prepared Attachment G which describes ongoing utility coordination activities in more detail.
Schedule Phasing Constraints
In addition to utility capacity upgrades, the Division electrification phasing schedule is driven by two main constraints: 1) A bus operations disruption mitigation strategy and 2) Olympics and Paralympic Games contingency fleet acquisition.
Metro cannot undertake construction activities at divisions without robust mitigation strategies that ensure Metro’s ability to continue providing reliable bus service. This includes the availability of operations and maintenance funding to support the total seven million annualized service hours as planned through the NextGen Bus Plan. Division electrification work will require the transfer of buses and service delivery to other divisions and facilities during construction. To achieve the transition as soon as possible but not later than 2035, Metro must move up to approximately 475 buses per month to other locations, which places enormous strain on bus operations groups and presents yet-to-be-quantified program costs.
At present, Metro has space to transfer up to 170 buses. However, available space will decrease dramatically when construction of the new Rail Operations Control and Bus Operations Control Centers begins at Division 10. The disruption to bus operations and strain on bus storage space extends over a longer period with the updated schedule but with reduced severity of those impacts and reduced risk related to construction. However, construction and utility assumptions for each division are less aggressive in the updated schedule, reducing the risk of delays and cost overruns.
The need to accommodate the incoming Olympic and Paralympic Games contingency fleet, currently anticipated at 2,700 buses in addition to Metro’s fleet of 2,100 may provide an opportunity to coordinate with the fleet transition. As contingency fleet buses arrive, Metro has requested federal funds to invest in property, upgrade facilities, and retain staff to store, exercise, and maintain contingency fleet buses that may arrive prior to 2028. While this may impact near-term fleet movements, in the long term, property leases and investments to support the Games contingency fleet may be retained to support later phases of the ZEB transition and increase space availability. The updated assumptions shift much of the bus displacement strain to after 2028. This allows better opportunities to extend the utility of the temporary storage facilities needed for the contingency fleet while reducing the scale of the off-site storage required during this period.
Program Cost and Funding
The most recent program estimate prepared in the Master Plan Update indicated a total capital cost of $4.73 billion through 2030 to replace buses and build charging infrastructure for the zero-emission transition. This is nearly double the cost if Metro replaced its fleet with CNG buses and upgraded the existing CNG fueling infrastructure. The table below compares the capital cost estimates for CNG and ZEB to replace the bus fleet and upgrade fueling infrastructure.
|
Capital Cost Estimate to Replace Bus Fleet and Upgrade Fueling Infrastructure |
|
|
CNG/RNG |
ZEB (2035) |
ZEB (2030) |
|
Total Program Cost |
$2.60 billion |
$4.57 billion |
$4.73 billion |
|
Average Annual Cost |
$260 million |
$381 million |
$675 million |
In the past eleven years, Metro has annually budgeted an average of $169.9 million for bus acquisitions, bus facilities improvements, and bus maintenance/state of good repair (SGR). However, transitioning the entire fleet and all ten divisions to zero emission no later than 2035 will require nearly three times that average annual investment. In April 2024, Metro’s Early Intervention Team (EIT), an interdepartmental working group of subject matter experts from across the agency, recommended updating the program estimate with soft costs, utility capacity upgrades, and other costs not included in previous estimates. Staff will update the estimate in 2025, accounting for recently added program elements, which includes the FCEB pilot project. Staff are now working to prepare updated program cost estimates.
Since the Board approved the March 2021 ZEB Rollout Plan (Attachment H), Metro has maintained a funding strategy for the ZEB conversion as part of the agency’s overall financial forecast. This strategy includes a combination of revenue streams, primarily sourced from Proposition A and Proposition C. Additionally, the strategy leverages substantial funding from various state and federal programs, including the Transit and Intercity Rail Capital Program (TIRCP), Regional Improvement Program (RIP), Urbanized Area Formula Funding Program (Section 5307), Congestion Mitigation and Air Quality (CMAQ), Surface Transportation Block Grant (STBG), and the Transportation Development Act (TDA), among others.
As detailed below, Metro has developed a comprehensive funding plan to facilitate the ZEB conversion scenario, utilizing the agency’s available eligible revenues to fund the project’s current anticipated costs:
• Local funding sources comprise of 47.6 percent of the funding plan, consisting mainly of Proposition C ($1.7 billion or 38.7 percent of the total) and TDA ($239.1 million or 5.5 percent)
• Federal funding sources contribute 34.4% to the funding plan, primarily from STBG ($669.4 million or 15.3 percent), Section 5307 ($317.6 million of 7.3 percent), and CMAQ ($240 million or 5.5 percent)
• State funding sources comprise 18.1% of the funding plan, primarily from RIP ($400.6 million, or 9.2 percent) and TIRCP ($331.8 million, or 7.6 percent).
A significant portion of the funding relies on operations-eligible financing through Proposition C and TDA. As a result, the funding plan will need to compete with Metro’s annual operating budget. The revenue projections heavily depend on borrowed capital, with approximately 15% of the total funding anticipated from debt issuances.
While these funding sources have not yet all been secured, Metro will prioritize them along with other Board-approved projects and programs to cover the necessary ZEB program costs. Although Metro’s current revenue forecasts are sufficient to cover the costs of the ZEB conversion (as estimated herein), reallocating funds from other Metro projects may need to be considered if the economic situation changes or costs increase further. Metro will continue to update the funding plan to reflect grant awards, adopted budgets, contract awards, new grant opportunities, and the ongoing reprogramming of Metro funds as part of the Metro systemwide financial forecast. In addition, Metro will continue to evaluate proposals regarding public-private partnerships (P3) and include them in the funding plan for consideration if they provide demonstrable financial benefits to Metro.
Metro has secured $1.052 billion in state and federal funding for the program. Staff have attached to this report an overview of all ZEB Program Grant Awards and Funding Allocations, Amounts, and Uses (Attachment I).
Since April 2024, staff have secured $276.9 million in funding from state and federal sources.
Metro has recently requested $261 million through the California State Transportation Agency (CALSTA) Transit and Intercity Rail Capital Program for Division 7 buses and charging equipment. Staff expect a decision on TIRCP in October 2024.
Grants and Legislative Strategy
Metro has taken an all-hands approach to securing state and federal grant funds for the ZEB program. Departments across the agency, including Federal/State Policy and Programming, Government Relations, Community Relations, Sustainability Policy, the Office of Strategic Innovation, Program Management, the Office of the Chief Executive Officer, and Operations, continuously collaborate to develop as well as support grant applications. This includes preparing applications, pursuing grants through new/non-traditional sources (e.g., U.S. Environmental Protection Agency’s Climate Pollution Reduction Grant program), including appropriate program costs in Olympic and Paralympic cost estimates and funding requests, accessing Measure M project funds, and garnering local support for proposed projects. Metro has also sought and received vital support from climate advocacy groups like the Los Angeles County Electric Truck and Bus Coalition (LACETBC). In July 2024, Metro hosted a tour for the LACETBC of Division 8 and the G Line to discuss the challenges of the zero-emission transition and opportunities for collaboration. Strengthening partnerships with organizations like LACETBC will better position Metro to secure future grants, as they can support our grant applications and advocate for new and continued funding programs at the state and federal levels.
Metro’s Government Relations team is working on several fronts to increase Metro’s competitiveness in state and federal grant opportunities related to ZEB procurement and infrastructure deployment. Regarding the federal government, Metro was a national leader in ensuring the Bipartisan Infrastructure Law (P.L. 117-58) dramatically increased federal funding for ZEBs and related infrastructure needs. Specifically, the new federal infrastructure law provides $5 billion to help transportation agencies, such as Metro, transition to low or zero-emission buses and purchase charging infrastructure.
Following the adoption of the Bipartisan Infrastructure Law, Metro has been working closely with the Biden Administration to address various challenges facing domestic zero-emission bus manufacturing firms. These efforts have included Metro CEO Stephanie Wiggins participating in a White House Roundtable on Clean Bus Manufacturing held on February 7, 2024, to discuss how our agency is taking steps to leverage the upcoming 2028 Olympic/Paralympic Games to ensure our agency can provide the “cleanest” mobility plan for a major sporting event. Prior to this meeting, Metro’s CEO had held in-depth conversations on zero-emission bus procurement matters at the White House with the then-Senior Advisor to the President, Infrastructure Coordinator Mitch Landrieu, and later with Samantha Silverberg, Deputy Assistant to the President for Infrastructure Implementation.
In addition to working with White House officials and the U.S. Department of Transportation (USDOT) to explain Metro’s plans related to zero-emission buses, the agency has been in regular contact with members of the Los Angeles County Congressional Delegation to build support for our federal grants seeking funding for zero-emission and near-zero emission buses. As a result of strong grant applications and robust support from our federal delegation across Los Angeles County, in 2022, FTA awarded the nation’s second-largest Low or No Emission (LoNo) grant to our agency in the amount of $104 million for zero-emission buses and related infrastructure for our agency’s Bus Divisions 9 and 18. In July 2024, Metro was awarded another LoNo grant for $77.5 million -the nation’s second-largest award for zero-emission buses and related infrastructure at Division 7.
At the state level, Metro’s legislative program has focused efforts on climate and infrastructure issues by working with the California Legislature, Governor Newsom, as well as the LA County delegation to advocate for the passage of proposals that support the state’s climate change goals, transportation projects, and workforce development. In 2024, Metro’s state legislative program included goals to ensure the state continues to secure, protect, and fully fund the major transportation programs; support legislative initiatives aimed at increasing funding for LA County transportation projects and initiatives; maximize funding for transportation projects and programs through implementation of the state’s cap and trade program; and coordinate with our local and state partners to incorporate the region’s needs in emerging climate change and sustainability programs. Government Relations staff have worked with the state to support the development and implementation of Metro’s ZEB program.
While funding for many state and federal grant programs has increased dramatically since the COVID-19 health crisis, these infusions are set to expire in the coming years. The massive infusions for grant programs that fund transit, bus acquisitions, construction of fueling infrastructure, and other solutions that address climate change authorized by the Infrastructure Investment and Jobs Act (H.R. 3684) and the Bipartisan Infrastructure Law (P.L. 117-58) will expire in 2026 and 2027 respectively. Without congressional action to extend funding, programs will return to their pre-COVID funding levels, which will be insufficient to support the scale and pace of the transition occurring across the U.S. Likewise, California Senate Bill (SB) 125, authorized the newly created Zero Emission Transit Capital Program (ZETCP), which will also disburse funds through FY27-28. However, Metro continues to advocate for additional funding beyond what is currently planned to meet the agency's zero-emission and climate goals.
Hydrogen Fuel Cell Electric Bus (FCEB)
The December 2023 Master Plan Update modeled Metro’s existing service block mileages against multiple rates of BEB technology improvements. The model suggested with current technology improvement rates, BEB technology cannot meet 9 - 27% of Metro’s service blocks in 2030, and 1 - 8% cannot be met in 2035 or 2040. Even by introducing opportunity charging, most of these blocks cannot be achieved with anticipated improvements in BEB technology. Metro will evaluate FCEBs, which offer ranges comparable to CNG, and bring zero-emission service for uncompleted service blocks. Other benefits FCEBs provide include a fueling time comparable to CNG's (6-10 minutes per bus) and avoiding expensive utility capacity upgrades.
Metro will purchase 20 FCEBs in the open solicitation’s base order. Staff have prepared a preliminary feasibility study to evaluate the placement of hydrogen fueling infrastructure and deployment of FCEBs on bus lines. Staff identified Divisions 8 and 15, contracted service Division 97, and the Marilla Lot, a Metro-owned property near Division 8, as candidate locations to place hydrogen fueling infrastructure. Staff have advanced the feasibility study to more detailed site-level evaluations of the shortlist. Attachment J provides more detail on the preliminary Hydrogen Fueling Infrastructure Feasibility Study.
Equity_Platform
EQUITY PLATFORM
No changes in equity impacts are expected that were noted in the previously submitted board reports associated with the ZEB program. Bus purchases fall under FTA's Transit Vehicle Manufacturers (TVM) program, and DEOD does not set contract goals on TVM procurements. PLA is only applicable on construction contracts that have a construction-related value in excess of $2.5 million.
Metro’s programmatic transition to a ZEB fleet, as well as modifying facilities, will ensure that Equity Focus Communities see the benefits of reduced noise and greenhouse gas emissions in their communities as the divisions are being transitioned. Metro’s ZEBs will operate on routes restructured through the NextGen transit service plan. Five of Metro’s ten directly-operated bus Divisions are within an Equity Focus Community (EFC). Seven Divisions are located within a state-classified Disadvantaged Community (DAC) according to the California Environmental Protection Agency and as established in California Senate Bill 535.
The first phase of Metro’s ZEB transition will reduce noise and pollution in EFCs. Division 9, the first bus division to be electrified, is located within an EFC, and 59% of the communities served are designated EFCs. Prioritizing electrification of the J Line will also bring environmental benefits to some of the region’s most densely populated, congested, and polluted communities, many of which are EFCs. Divisions 18 and 7, the subsequent two divisions to be electrified, serve 70% and 52% EFCs, respectively.
An emissions model was designed to quantify the vehicle tailpipe and lifecycle GHG emission reductions that can be achieved through transitioning to a ZEB fleet. Tailpipe emissions, especially particulate matter (PM) and nitrogen oxides (NOx), pose immediate health risks, including chronic bronchitis, asthma, and increased risks for individuals with heart conditions. Though CNG/RNG buses emit less overall emissions compared to gasoline-powered vehicles, they still emit low levels of criteria pollutants, including significant amounts of carbon monoxide (CO), which can lead to poisoning if inhaled. The model results show that in the County of Los Angeles, the transition to a ZEB fleet will eliminate 86% of harmful tailpipe gases, including CO, NOx, and volatile organic compounds (VOCs), compared to keeping a CNG fleet (fueled with renewable natural gas) from now to 2050. The transition will also help remove 41% of PM10 and 53% of PM2.5. Metro’s current fleet profile would generate 13,798 metric tons of lifecycle emissions without the transition. The lifecycle emission reduction depends on the power grid being transitioned to use 100% renewable power. When assuming the grid will gradually transition to 100% renewable generation, transitioning the entire bus fleet by 2035 would yield negative Greenhouse gas (GHG) emissions (-1 metric ton of CO2e), meaning it eliminates the lifecycle GHG emissions and removes carbon from the atmosphere.
Considering Metro’s 5.2 million BEB service miles to date, this reflects the reduction of 104.98 metric tons of tailpipe CO, 0.68 metric tons of NOx, 2.4 metric tons of VOCs, 0.55 metric tons of PM10, and 0.09 metric tons of PM2.5. However, the lifetime greenhouse gas emissions of operating BEBs increased by 5,514 metric tons of CO2e compared to RNG. This is due to the power mix of the electric grid.
Transitioning to a ZEB fleet offers significant public health benefits, especially for those most impacted by transportation emissions. People of color and low-income households are more likely to live near busy roads and face higher exposure to air pollutants, resulting in increased health risks. These demographics also represent a significant portion of Metro ridership. The lifecycle emissions model estimates public health savings of approximately $223 million between 2025 and 2050 due to the public health benefits of zero-emission buses.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
This update supports Goal #3 to enhance communities and lives through mobility and access to opportunity and Goal #4 to transform LA County through regional collaboration and national leadership.
Next_Steps
NEXT STEPS
Staff will continue executing the plan to transition Metro’s bus fleet to zero emissions, and Operations will return to the board in January 2025 and quarterly thereafter, as requested in Motion 31.1. In addition, Operations will prepare the preliminary utility service requests to LADWP for the NSFV, North Hollywood Transit Center redevelopment, and North Hollywood to Pasadena BRT projects. Operations will also aggressively pursue state and federal grant opportunities through collaboration with internal and external stakeholders, as well as advocate for an extension of grant programs that will expire soon. Lastly, Operations will advance the FCEB fueling infrastructure feasibility study, perform market analysis, and evaluate delivery models.
Attachments
ATTACHMENTS
Attachment A - Board Motion 31.1 Related to Item 31: Zero Emission Bus Program Update
Attachment B - Board Motion 50 Strategic Plan for Metro’s Transition to Zero Emission Buses
Attachment C - April 2024 ZEB Program Update
Attachment D - ZEB Program Projects Map
Attachment E - ZEB Program Division Electrification Detailed Schedule
Attachment F - Project Delivery, Unsolicited Proposals, and Charging-as-a-Service
Attachment G - Ongoing Utility Coordination Activities
Attachment H - March 2021 ZEB Rollout Plan
Attachment I - ZEB Program Grant Awards and Funding Allocations, Amounts, and Uses
Attachment J - Summary of Hydrogen Fueling Infrastructure Feasibility Study
Prepared_by
Prepared by: Shaun Miller, Deputy Executive Officer, Project Management, (213) 922- 4952
Michael Turner, Executive Officer, Government Relations, (213) 922-2122
Reviewed_By
Reviewed by: Conan Cheung, Chief Operations Officer, (213) 418-3034
Ray Sosa, Chief Planning Officer, Countywide Planning and Development (213) 547-4274
Seleta Reynolds, Chief Innovation Officer, Office of Strategic Innovation, (213) 922-4098
