Title
Alternative Fuel Program - Approval
History
For many years, the Village Board has pursued green initiatives in an effort to promote sustainability. One of these efforts includes the implementation of renewable energy and efficiency initiatives. With regards to fleet vehicles, the Village Board has consistently approved the purchase of fuel efficient vehicles such as the Ford Focus & Escape which run on regular gasoline. Additionally, the Village purchases bio-diesel to fuel diesel engine vehicles and equipment (bio-diesel is more fuel efficient than gasoline). However, due to the continually rising cost of fuel and the international emphasis on reducing carbon emissions, the Village continues to evaluate various alternative fuels that may enable our fleet to be more efficient while producing lower overall emissions that reduce our negative impact (carbon footprint) on the environment.
Over the past year, staff has evaluated a number of alternative fuel options including propane gas and compressed natural gas (CNG) and it has been determined that propane is the most efficient. Propane gas, also known as Liquefied Petroleum Gas (LPG) and Propane Autogas, has been used worldwide as a vehicle fuel for decades. Interest in propane as an alternative transportation fuel stems mainly from its domestic availability, high-energy density, clean-burning qualities, and relatively low cost. It is the world's third most common transportation fuel and is considered an alternative fuel under the Energy Policy Act of 1992.
Propane is stored onboard a vehicle in a tank that is pressurized to roughly 150 pounds per square inch-about twice the pressure of an inflated truck tire. Under this pressure, propane becomes a liquid with an energy density 270 times greater than the gaseous form. Propane has a higher octane rating than gasoline, which reduces instances of engine knock. However, propane has a lower BTU rating than gasoline, so it takes more propane fuel to drive the same distance. Propane is less expensive than regular fuel and its clean burning characteristics allow the vehicle engine to have an increased service life.
In 2015, the Village was approached by Alternative Fuel Supply (AFS), LLC of Schaumburg, Illinois, a Liquid Propane Gas provider, regarding an alternative fuel program. The turnkey program would reduce the Village’s need and dependence on gasoline and provide the Village an immediate return on investment with little upfront cost. Staff evaluated AFS and in order to provide a reasonable comparison, compared their proposal to other organizations. The City of Springfield, IL, recommended staff to engage in conversations with ICOM, LLC. ICOM is strictly a conversion kit company that partners with a liquid propane fueling company (Heritage FS) to provide a similar program.
Staff compared each of the companies’ proposals and evaluated the options for the Village.
Option 1: Alternative Fuel Supply, LLC
- AFS would absorb nearly all of the upfront infrastructure and conversion costs. The cost to Village will be $22,000.
- Cost of fuel would be higher than other company but fixed. Cost of propane will be 50 cents less than regular gasoline.
- 42 vehicles within the police department, which has highest gasoline usage, would be converted.
- Village would realize immediate savings.
Option 2: ICOM & Heritage FS, Inc.
- Village to absorb infrastructure and conversion costs.
- Village to work with separate propane provider with an approximate cost of $30,000.00 which does not include installation cost. Total costs would be $239,850.00.
- Fuel is less expensive, but would fluctuate based on “Current Fill Price” and as market conditions change.
Due to the minimal upfront cost to the Village and the near immediate return on investment, staff recommends beginning negotiations with AFS, LLC to design an Alternative Fuel Program that best fits the Village needs.
The Village will hear a presentation by representatives from AFS of Schaumburg, IL. The presenters will discuss alternative fuels that may be available for a variety of fleet applications in addition to answering any questions regarding their proposal.
On January 3, 2017, this item was reviewed and approved by the Public Works Committee and referred to the Board for approval.
Financial Impact
None
Recommended Action/Motion
I move to approve authorizing Village staff to proceed with alternative fuel program/implementation negotiations with Alternative Fuel Supply, LLC (AFS) of Schaumburg, IL.