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City buying new natural gas fueling station for its trucks
Cost up to $684,000 to be recovered in 5 or 6 years
City of Statesboro seal

The city of Statesboro, which operates a natural gas pipeline system serving customers inside and in some directions beyond the city limits, is spending up to $684,000 on a new compressed natural gas filling station to keep the city’s fleet of CNG-fueled trucks rolling.

“It is our plan to continue to expand the fleet by adding additional units, with our focus being on heavy duty units that consume the most fuel,” city Public Utilities Director Steve Hotchkiss replied in an email.

Currently, the city’s CNG-fueled fleet numbers 12 vehicles. These include six large trash trucks, which burn the bulk of the compressed natural gas produced at the city’s existing CNG fueling station, plus four light-duty pickup trucks and two heavy-duty service trucks. But each of the large trash trucks consumes 50 to 60 gallons per day, Hotchkiss said Monday.

The city government purchased its current CNG station pre-used from Georgia Southern University in 2013. Previously, the university operated this equipment to supply gas to a fleet of CNG-fueled buses.

“The system served us well for several years, but now, due to age and wear, the system needs to be replaced,” Hotchkiss stated in a memo provided to City Council before last week’s meeting.

The heart of the system will consist of two new compressors that will receive natural gas from a city pipeline and compress it to a pressure of 3,200 pounds per square inch, he explained in an email to the Statesboro Herald. A portion of the gas goes into high-pressure tanks as a way to “fast fill” vehicles, but the big trash trucks are filled slowly while they are parked overnight.

Asked about safety measures, Hotchkiss said that the compressor system is protected with a series of over-pressure devices and remotely operated kill switches that cut electrical power to the system if it fails.

 

Bid & add-ons

After seeking bids from contractors that would remove the old system, do preparatory site work and supply and install a new system, the city received two offers. Zeit Energy LLC, which is based in Texas, asked $696,503. Y-Delta Inc., a Statesboro-based company, bid $476,869.

City staff members had reviewed the bid proposals for accuracy and for compliance with the city’s 2020 ordinance promoting bidding opportunities for minority and female-owned businesses, Hotchkiss reported. The staff then recommended awarding the contract to Y-Delta.

However, Hotchkiss’s request, which City Manager Charles Penny carried forward to the mayor and council, was for approval to spend up to $684,000 on the project. The memo stated that this would cover paying $36,000 to Y-Delta to add an “install and startup” package from the manufacturer, as well as an estimated $58,000 to Georgia Power for electrical power system upgrades and the city’s replacing gear such as hoses and nozzles for about $60,000.

These items, plus Y-Delta’s original bid price, add up to $630,869, or $53,131 less than the $684,000 spending maximum, which City Council unanimously approved. The remainder will be available for any contingencies, but the staff’s goal is to spend less than the $630,869 if possible, Hotchkiss said.

“Due to extremely good pricing on the filling system we will be able to perform all of the additional upgrades and still remain under our projected budget,” he wrote in the city memo.

City officials have been planning to upgrade the CNG station for a couple of years. The full budgeted amount was $685,503, including $396,503 from the Special Purpose Local Option Sales Tax, $250,000 from fiscal year 2020 public utilities income and $39,000 in carryover funds from previous surpluses. 

 

Cost recovery

The city has no plans to share this fueling station with any other users.  Making it available to the public would require a completely separate site and a much more expensive system than the one the city is building, Hotchkiss said.

Instead, the city should recover the cost in five or six years just from its continued savings on operating six large trash trucks on CNG instead of diesel fuel, he said. Hotchkiss reports that CNG currently costs the city about $1.50 less per gallon than diesel.

“Each truck burns about 50 gallons per day, so we save about $75 per truck per day,” he wrote. “When you do the math for six trucks, we save about $135,000 per year, which gives us a payback of five to six years on our investment. The added benefit is that the trucks are low emission, quiet and more dependable than current diesel models.”

The city’s goal is to have the new system up and running in about 180 days, but Hotchkiss noted that the pandemic has disrupted parts and materials deliveries on many current projects and could add to the timeline.

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