Alt-Fuel School Bus Grants: To Use or Not?

April 1, 2017

In exploring the topic of alternative fuels from the most recent School Transportation News reader survey, we identified a need to delve deeper into the role that grant projects are playing for school districts in offsetting new school bus purchases, as well as the installation of fueling infrastructure.

According to our survey conducted in March, 53 percent of the 170 readers who responded said they used grants through the U.S. EPA’s Diesel Reduction Emissions Act (DERA) program to help pay for bus purchases. Others cited the Congestion Mitigation and Air Quality Improvement Program (CMAQ), Utah Clean Cities Coalition, California Energy Commission (CEC), and South Coast Air Quality Management District, also in California, just to name a few.

The grants provided by these programs provide clean air reinforcements for the transportation industry in general, and especially school bus transportation, and the right to breathe clean air for citizens of all communities.

Since most diesel engine vehicles can operate for up to 30 years, the number of older legacy vehicles currently in use is abundant, though most states and school districts have replacement cycles for school buses of 12 to 15 years. The EPA and the CEC offer grants for projects that reduce diesel emissions from existing engines, either through new purchases, retrofit equipment such as diesel particulate filters and diesel oxidation catalysts, or engine repowers. Last year, the EPA alone awarded a total of $26 million in DERA funds for clean diesel projects.

The CMAQ program authorizes $2.3 billion to almost $2.5 billion from 2016 through 2020 to benefit state agencies, tribal governments, school districts, school bus contractors, public transportation agencies, trucking companies, and other organizations.

The Utah Clean Cities Coalition promotes clean fuel and clean air, as their slogan states. Their mission is to support local decisions to adopt the use of alternative fuel infrastructures and vehicles. The UCCC offers funding opportunities that are available once a year.

In the State of California, the California Energy Commission is the primary energy policy and planning agency that promotes the reduction of energy costs and environmental impacts. The CEC offers an Alternative and Renewable Fuel and Vehicle Technology Program (ARFVTP) to help meet the state’s greenhouse gas emission goals.

SCAQMD offers several programs aimed to provide monetary incentives for those looking to implement cleaner alternatives. SCAQMD’s incentive programs cover a larger variety of issues, from large fleet replacement projects to new transportation systems that help reduce mobile emissions.

“Like most school districts we have limited funds,” said Jeff Hutchings, manager of transportation for Huntington Beach Union High School District in California, on how he has used SCAQMD grants. “Without the help of grants, we would not be able to replace our fleet.”

The school district is currently upgrading the transportation facility to meet future CNG requirements.

Jordan School District in West Jordan, Utah has been purchasing CNG school buses since 1998 and currently owns 75 CNG buses. “We have our own fueling station and 73 parking stalls with time-fill CNG dispensers at each stall. We are always looking for grants to help maximize our purchasing power when we buy CNG buses,” commented Herb Jensen, director of transportation at Jordan School District. “We are hoping that the cost of CNG buses will become more in line with diesel buses, but until that happens, the grants help us offset the additional cost of a CNG engine.”

With the average cost of electric buses coming in at around $300,000 each, school districts are faced with the cruel challenges of attempting to acquire the necessary capital to purchase the school buses without using grants.

Although grants are widely available for funding, student transporters voice concerns regarding the future availability of these funds. Are they temporary seed money to get infrastructure and vehicle costs down to market-acceptable levels? Or are they long-term opportunities to help school districts with their investments?

Bill Cowling, assistant superintendent at Blue Springs School District in Missouri, said, “by design, grants are “encouragements” for change. Once the desired effect has been achieved, I would anticipate a reduction in the grant program,” he explained. “However, it’s my opinion that this significant change has not been realized. So, I feel comfortable that grant funding will be offered in the near future and throughout our multi-phased transition plan.”

Although the move toward alternative fuel systems is considerably costly and a persistent commitment, immediate savings from lower fuel and maintenance costs may be significant enough to persuade many fleets to make the change without the help of grants.

“CNG is certainly a long-term investment however one with a solid return,” said Cowling. “Yes, it is costly to get started, but with a fleet of our size, we will realize significant savings over the life of the bus. In fact, we have calculated that our district will save an estimated $7 million over a 10-year period. Of course, we plan on our bus life to reach 12-plus years, which only grows our savings number dramatically.”

Understanding that most school district leaders are occupied with the priority of academics and ensuring funds for the classroom, transportation needs are pushed aside or left on standby. School districts must make a commitment to researching alternative fuel grants, especially if the school districts are financially unprepared to make a switch from diesel. And even then, it can take time to study the appropriate fuel path to take, then apply for available grants, not to mention securing them in time to address their aging fleets’ needs.

The survey results indicated a growing awareness of grants, and the needed increase of usage to reap the full benefits of their capabilities, and realize the full benefit of today’s alternative fuels, in terms of their effect on the communities as well as the school district’s operations.