REPORT TO COUNCIL
SUBJECT
Title
Action on Accepting a Grant Award from the EnergIIZE Commercial Vehicles Project to Fund Medium-Duty and Heavy-Duty (MD/HD) Zero-emission Vehicles (ZEVs) Charging Infrastructure at the City’s Street Corporation Yard/Utility Yard at 1715 Martin Avenue
Report
COUNCIL PILLAR
Deliver and Enhance High-Quality Efficient Services and Infrastructure
Promote Sustainability and Environmental Protection
BACKGROUND
Assembly Bill (AB) 118 (AB 118, Statutes of 2007, Chapter 750) created the Clean Transportation Program, formerly known as the Alternative and Renewable Fuels and Vehicle Technology Program. Administered by the California Energy Commission (CEC), this program uses funds from vehicle and vessel registration, vehicle identification plates, and smog abatement fees to develop and implement technologies to transform California’s transportation landscape.
In April 2021, the CEC awarded $50 million in Clean Transportation Program funding to CALSTART to address medium-duty and heavy-duty (MD/HD) zero-emission vehicles (ZEVs) adoption needs in California through financial incentives to be used towards the purchase of infrastructure equipment and software. CEC has assigned CALSTART (a nonprofit organization working nationally and internationally with businesses and governments to develop clean, efficient transportation solutions) to administrate the Zero-Emission Commercial Vehicles Project (EnergIIZE Project). The EnergIIZE Project is the nation’s first commercial vehicle fleet infrastructure incentive project.
There are several key pieces of policy which provide the overall framework and funding to support the EnergIIZE Project. In September 2020, Governor Newsom signed Executive Order N-79-204 mandating the transition of all MD/HD vehicles in California to zero-emission by 2045, and 2035 where possible for drayage trucks. Additionally, California Air Resources Board (CARB) adopted rules for a phased adoption of zero-emission trucks and public transit. Ultimately, these rules mandate a complete transition to zero-emission transit buses by 2040 and an increase to at least 40 percent ZEV sales by 2035 for various truck classes.
In addition, CARB passed the Advanced Clean Fleets (ACF) rule with the goal of achieving a zero-emission truck and bus California fleet by 2045. The ACF regulation applies to fleets owned by state and local government agencies. The regulation affects MD/HD on-road vehicles with a gross vehicle weight rating greater than 8,500 pounds, off-road yard tractors, and light-duty mail and package delivery vehicles.
The ACF regulation also requires public fleet purchases to equal 50 percent ZEVs by January 1, 2024, and 100 percent of ZEVs by January 1, 2027. These state guidelines emphasize the growing market for MD/HD ZEVs and the necessity of further incentives to support this transition.
DISCUSSION
Silicon Valley Power (SVP) applied for grant funding through the EnergIIZE Project website during the EV Fast Track application window. Applications were reviewed on a first come, first served basis. In its application, SVP’s requested funds to install two dual-port DC Fast Chargers at the City’s Street Corporation Yard/Utility Yard at 1715 Martin Avenue. SVP is required to select pre-approved electric vehicle (EV) charging technology from the EnergIIZE Project Approved Technology catalog. The total cost of this project is anticipated not to exceed $350,000.
SVP has been conditionally awarded $177,487 for an EV charging infrastructure project to support the City’s MD/HD ZEV fleet. Due to the site location being in a designated Disadvantaged Community (DAC), SVP qualified for additional funding. The funding will be used for EV equipment, charge management software and electrical infrastructure (such as switchgears, wiring and conduit). The difference between the project costs and the grant funds will be paid from Greenhouse Gas Reduction Funds (Fund 191) that were transferred to support the EV Charging capital project.
At this time, the grant is conditionally approved subject to the City issuing a purchase order for equipment. After the City issues a purchase order, CALSTART will send a draft agreement to the City. CALSTART has provided sample terms and conditions. Those sample terms and conditions are attached to this Report to Council. The City will make the purchases and then request and receive reimbursement from CALSTART. Generally, funds need to be spent within twenty-four months, but extensions may be granted. SVP anticipates completing this project in a twenty-four-month timeframe.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to section 15378(b)(5) of Title 14 of the California Code of Regulations in that it is a governmental administrative activity that will not result in direct or indirect changes in the environment.
FISCAL IMPACT
Funding for this project is budgeted in the FY23/24 Operating Budget and in the Capital Budget in the Electric Vehicle [EV] Charging project (project 2441). The grant reimbursement of $177,487 will offset a portion of the costs SVP anticipated to spend on this project in FY 2023/24. This reimbursement will be recognized once the funds are received.
Funding for operating costs associated with this equipment is included in the department operating budget using Greenhouse Gas Reduction Funds. Green House Gas Reduction funds 191-1325-87940-92300).
COORDINATION
This report has been coordinated with the Finance Department and the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov>or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Accept EnergIIZE Project grant funds for an amount of $177,487 (EnergIIze Grant) or such additional amount as may be awarded from the EnergIIZE Project to fund medium-duty and heavy-duty zero-emission vehicles charging infrastructure at the City’s Street Corporation Yard/Utility Yard at 1715 Martin Avenue or other eligible locations with required matching funds from Greenhouse Gas Reduction Funds (Fund 191); and
2. Authorize the City Manager, or designee, to negotiate and execute an agreement (Agreement) with CALSTART for the EnergIIze Grant and related documents, subject to the review and approval as to form by the City Attorney, and to take all actions necessary to administer and implement the EnergIIze Grant and Agreement.
Staff
Reviewed by: Manuel Pineda, Chief Electric Utility Officer
Approved by: Jōvan D. Grogan, City Manager
ATTACHMENTS
1. EV Jump Start Funding Lane Fact Sheet
2. EnergIIZE Terms and Conditions
3. Summary of the Advanced Clean Fleets Rule