Natural Gas – Conversions, Vehicles and Technology

Fla. City's CNG Plan to Save $2.9M in Fuel Costs

September 29, 2014

The City of Panama City, Fla., city commission approved a recommendation to construct a compressed natural gas (CNG) fueling station and replace a portion of its fleet with CNG vehicles at its Sept. 22 meeting.

City leaders approved the initiative after discussing a consultant's report that evaluated the economic feasibility of transitioning to CNG and mentioned that it could take up to 10 years for the city to see a return on its investment (ROI). The initiative is expected to save the city $2.9 million in fuel costs over a 20-year period.

The city commissioned Zeit Energy to conduct the evaluation earlier this year. Assessors identified 38 vehicles that could be replaced with CNG vehicles and identified a location where the city could build a public-access CNG fueling station, estimated to cost $1.7 million.

Conversion of 38 vehicles is expected to cost $1.52 million in premiums over 20 years for an aggressive replacement schedule. The report recommends the city apply for Florida’s 50% CNG vehicle rebates to help fund the purchase of CNG trucks.

Using the aggressive replacement schedule, the city is projected to pay for its CNG project in nine years. With a conservative replacement schedule, the city would get an ROI in 10 years. Evaluators stated that selling CNG to the public could accelerate the payback period.

Construction costs would be funded by the solid waste division.

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