Article

Exploring the Total Cost of CNG

March 2013, Government Fleet - Cover Story

by Shelley Mika - Also by this author

Unexpected Operating Expenses

In addition to unexpected capital costs are unforeseen operating expenses. In some instances, a CNG fleet has requirements a traditionally fueled fleet doesn’t. These include:

Training: CNG fueling systems are complex — which means an investment in training for fleet technicians is a must. “It’s important to set up the training immediately and have it completed before ­implementing your CNG equipment purchasing or conversion program,” Riley said.

Training won’t cost as much as capital expenses, but it’s not a small expense. “Proper training is a major cost,” Stevens said. “The costs can vary based on in-house training or paying an outside specialist for training.” 

Equipment Operation and Maintenance: When a fleet owner installs the fleet’s own fueling infrastructure, it’s important to account for the costs to operate, maintain, and eventually replace the equipment.

“Like any other equipment, the compressors require preventive and corrective maintenance,” Drake said. “The maintenance may be performed by [fleet] staff or by a third-party service provider — either way, the cost should be accounted for in the early analysis.”

Compression equipment operating costs include electrical, CNG gas to run the compressor, and associated maintenance costs such as parts, oil, and filters. Riley said he was once quoted roughly $1,500 per month to service and repair a fast-fill compressor station with 20-foot cylinders.

Riley said maintenance costs should be figured into the budget as well. “Because the engine-driven compressors run so often to fuel vehicles, you have to service them a lot more frequently than a standard fueling station,” he said. “You’re going to have some unique maintenance costs too, for things like safety cut-offs, gauges, and warning lights.”

While it may be another expense, taking good care of stations will prevent larger costs from popping up in the future. “Fleets must generate a comprehensive inspection and preventive maintenance program for the station equipment,” Stevens said. “It is critical to the CNG program you have adopted to make sure you have the fuel available for your fleet.”

Tank Inspection and Replacement: Tank inspection and replacement is another expense that, while relatively nominal, can’t be omitted. “All fuel cells have an expiration date stamped on the tank. It has a defined lifecycle,” Riley said. “So when it expires, you have to prepare for the costs of replacing it — you can’t continue to operate it past the expiration date.”

Tanks are required to be inspected every three years by a certified tank inspector. Relford said Weld County pays $150 for the inspection and approximately $600 for an 8 gasoline gallon equivalent (GGE) Class 4 replacement tank. A Class 4 tank has a life expectancy of 15-25 years before needing replacement. An immediate tank inspection is also required if the vehicle is involved in a car accident.

Pictured are Weld County, Colo., employees with the County's natural gas vehicles. Photo courtesy of Weld County.
Pictured are Weld County, Colo., employees with the County's natural gas vehicles. Photo courtesy of Weld County.

COMMENTS

  1. 1. Bob Stanton [ September 21, 2013 @ 03:00PM ]

    One factor as yet unmentioned is the residual value of the CNG units. The higher acquisition cost impacts both depreciation and the residual value calculations. If you're in a market where CNG is readily and publicly available the market for used CNG vehicles will be more attractive. Conversely, CNG availab

 

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