The VW Settlement Grant - VW due to violations of the Clean Air Act and non-disclosure thereof paid a settlement of $14.7 Billion to three Federal Agencies. Funds from this settlement have been allocated to a grant program for alternative fuel vehicles that will reduce emissions.
The grant has been made available in waves with the current one released at the end of August through September 30, 2021.
Daphne Dixon from the Live Green non-profit organization has told us that this round of grants does include a target for Electric Vehicle School buses. And also due to the make-up of our fleet currently including a number of 2008 vehicles, and that we are located in Fairfield County that has air pollution, and that Bethel has taken some "green" solar steps within our school campus through the Bethel Energy Conservation Commission, that Bethel would stand a good chance at being awarded funds from this round for a pilot of anywhere from 3 to 7 buses.
The grant pays UP TO 65% of the cost of the vehicles and charging infrastructure. Electric school buses cost approximately 3X that of a standard new diesel school bus. So the grant makes the discussion of EV school buses viable.
Contracting with First Student
We contract our school transportation with First Student. Under this arrangement First Student owns the vehicles.
Therefore it would be First Student that would need to apply for the grant and commit to retire completely the same number of older vehicles that are awarded and accepted as EV through the grant.
First Student has committed to apply for the grant if we wish. Their application would be on behalf of their operations in Bethel and specifically for the Bethel fleet of buses. With this would come the need for a commitment by Bethel Public Schools to First Student so that these EV school buses would be in our fleet and able to be depreciated over a minimum period of five years - five years is the maximum amount of time we can have for a contract.
Contract - We are in a one year contract extension with First Student and in order to make a commitment we would need to have a bid waiver approved.
Alternative Plan - RFP
Our original plan was to go out to bid by the end of October. The RFP would include a five year contract and have alternate bid options for electric and propane scenarios.
We have had several extensions on our current contract and we would be due to go out to bid.
Choosing to go out to bid, takes us out of applying to this particular VW Grant as it would have to be First Student filing the grant..
Cost Discussion
Per First Student, for the EV school buses that we would add to the fleet under this grant, assuming 50% grant funding, the cost would be 4% more than a diesel vehicle or $2900 more per year for each vehicle. At five vehicles it would cost $14,500 per year more in our contract. So for these vehicles what would be an expected 3% increase in our contract would instead be a 7% increase in year one, affecting the overall increase to be closer to 3.7% vs. 3%.
Operating with an older fleet of vehicles, we know that with a new RFP, newer vehicles, even if diesel, would have to be factored in. In the past we have seen increases of 3% but we can expect that to be higher.