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April 17, 2012

BATA, TCAPS explore natural gas

BY JAMES RUSSELL jrussell@record-eagle.com

TRAVERSE CITY — Two organizations want to learn what it would take to convert their large bus fleets from diesel fuel to natural gas.

Traverse City Area Public Schools and the Bay Area Transit Authority, in partnership with the Traverse Chamber of Commerce, are participating in a study with a Chicago-based consultant to learn if it's feasible to convert to the cleaner-burning and cheaper fuel.

A grant from DTE Energy is paying for the study, which is expected to be released in early June.

"Our buses are much more fuel efficient than they used to be; there's much less of an environmental footprint based on technology being used," said Paul Soma, TCAPS' chief financial officer. "Natural gas has even less of an environmental footprint."

DTE contacted the Chamber to let officials there know about plans to convert their vehicles in Michigan to natural gas.

The utility wanted to explore partnerships with other entities in northern Michigan to save costs related to infrastructure upgrades and fueling stations.

The chamber reached out to various groups, and eventually selected TCAPS and BATA for the study.

"We chose TCAPS because they're such a large user, and BATA because they're on the road all the time," said Doug De-Young, the chamber's vice president of government relations and business advocacy. "We feel it could grow to other users once they see some of the possible outcomes."

The study will explore possibilities for fueling stations, and the cost to convert existing buses to the new fuel system.

Soma said he's looking forward to study results. He estimates it would cost between $10,000 and $15,000 to convert each of its 100 buses, with a total investment of around $2 million after accounting for new fueling stations.

But TCAPS could save as much as $200,000 annually, based on lower fuel costs for natural gas.

"We're looking at something like $2 million; that's a 10-year payback, so where's the financing? It's a relatively simple equation, but there's a lot of work involved in getting there," he said.

BATA Executive Director Tom Menzel said the feasibility of natural gas depends on how many groups collaborate on fueling stations. He said BATA would need at least one station each in Leelanau and Grand Traverse counties.

"I think the biggest problem is distribution channels; you have to have enough of a volume of users to justify investing in those kind of stations," he said.

BATA replaced about 70 percent of its fleet in recent years, and Menzel said it's hard to envision converting new buses to natural gas.

"There's a big push to use natural gas as a cheap source of fuel that keeps money in U.S., and the fuel burns cleaner," Menzel said. "It's a thing of the future, but how do you transition without negatively impacting your bottom line?"

Soma said there's also an environmental aspect to the use of natural gas that needs to be addressed.

"There are people who don't like the way natural gas is being removed," he said. "I'm hoping that this study vets that out, but that's something we need to be prepared for that dialogue."

The Chicago-based consultant, Vlecides-Schroeder Associates, is expected to release its study in early June.

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