The City of Panama City, Fla., has awarded a contract to Zeit Energy to build a $2.19 million compressed natural gas (CNG) fueling station for fleet vehicles that will also be publicly accessible. This price reflects a $690,000 budget increase that includes the cost of additional work related to project relocation.

The station will primarily service the city’s solid waste fleet. Out of its 40 solid waste vehicles, one vehicle runs on CNG, currently fueled at a small station about 15 minutes away, said Public Works Director Neil Fravel. The city expects to purchase 12 more CNG solid waste vehicles this year.

The city originally started its CNG facility project when diesel cost $3.75 per gallon; it’s now paying $1.80.

“In the long term, the decrease in diesel fuel costs certainly affects the economics of the station,” Fravel said. Staff had estimated payback for the project would take 10 to 12 years. “That’s probably extending out now as long as prices stay down where they are, but I don’t think anybody assumes that oil prices are going to stay this way forever.”

The project is paid for using the FY-16 Solid Waste budget. Fravel expects the station could be open in the fall of this year.