As we discussed in our previous article, the California Air Resources Board (CARB) is near to codifying the Advanced Clean Fleets (ACF) Regulation, which will require public agencies to begin electrifying their vehicle fleets in 2024. On February 13, 2023, CARB hosted a workshop (CARB presentation) to discuss the latest updates to the proposed regulation. The following article provides some of the most relevant updates and discussion points from the workshop as it pertains to water agencies.

Summary of Public Comments

Patterns in the variety of comments made during the workshop reveal the following categories of commentors:

• Environmental and social justice groups with concern for cleaner air in disadvantaged communities, in favor of the proposed regulation and incremental expansion to include smaller fleets
• Small fleet owners concerned about the financial and operational feasibility of continuing operations within the state, considering the expected net cost of Zero-Emission Vehicles (ZEV) and charging infrastructure.
• Larger fleet owners concerned about being able to comply with regulatory requirements while maintaining current levels of operational reliability, recognizing limited ZEV operational history and the precise definition of commercial “availability.”
• Vehicle Manufacturers (OEMs) concerned about being able to scale production quickly enough following the ratification of proposed regulation.

ZEV Availability

During the workshop there was significant emphasis on heavier Class 8 trucks used for drayage in ports and rail yards. Although these heaviest-duty class of vehicles represent a relatively small portion of the water agency fleet, the amount of discussion about them is notable because the use of electric ZEVs in this function has more operational history^[1] than nearly any other commercial use of ZEVs. Commentary and discussion during the ACF workshop reveal that concerns related to availability, reliability and net cost still exist. And these same concerns continue exist in all GVWR classes between Class 1 and Class 8, where the majority of water agency fleet vehicles exist and where there is less commercial operating history.

That said, it’s also important to note that CARB makes no distinction between a $27B market-cap company with 100-plus years of commercial history and 7 year-old company that’s still working to generate its first-ever profit.

From CARB’s point of view, a ZEV is “available” if it is “available for order”, “is available within the next 2 model years”, and “does not include demonstration/test/experimental vehicles”^[2].  Understanding the precise definition of demonstration, test and/or experimentalwill be critical to ensuring that current operational reliability standards will continue to be met, especially for heavier, more complex vehicles like vacuum (vac) and leak trucks, boom trucks and snow plows^[3]. During the workshop, several comments either directly or indirectly expressed concern about what defines available, and it appears clear that the precise definition is not yet shared between the regulator and fleet owners.

As per some public comments, requiring a ZEV purchase from any OEM will be challenging for fleet owners (and their mechanics) that have long-standing commitments to particular long-established vehicle brands. And commentary made it clear that even the long-established OEMs will need time to expand production. As one public comment emphasized, orders placed more than two years ago – with a major OEM – are still on the “wait list.” Workshop commentary and discussion makes it clear that even the long-established OEMs anticipate challenges in filling orders at the scale required for state-wide compliance with the proposed regulation.

Workshop discussion confirms that fleet owners will be required to consider unfamiliar and new OEMs, and which raises concerns about the availability of parts and service.  Even ignoring the transition to electric drivetrains, substantial preparation and adjustments in ongoing fleet operations will need to be made in order to effectively maintain the reliable operation of ZEVs, particularly those from OEMs with little operating history.

The ZEV Milestone Option

During the meeting there was significant commentary and discussion about the newly proposed Milestone Option. In summary, this option allows a fleet manager to commit to electrifying specified portions of the fleet within different vehicle classifications, by certain dates^[4]. Before reporting your intent to choose the Milestone Option it is important to consider that – as was pointed out during the workshop – CARB does not require replacing conventional vehicles with ZEVs before the end of a vehicle’s useful life^[5] and, you can continue to buy conventional vehicles beyond 2027 so long as specified target ZEV-percentages are met. This alternative compliance option will be available until January 1, 2030. Electing this alternative option would be “permanent”, you ”may not switch back”. Fleet owners must report their intention to use this option to CARB.

A key distinction between the ACF Requirements for State & Local Government Fleets and the ZEV Milestone Option:

• ACF Requirements for State & Local Government Fleets: requires a specified percentage of new purchases to be zero-emission vehicles
• ACF ZEV Milestone Option: requires a percentage of the fleet that must be zero-emission

ACF For State & Local Governments

ZEV Milestone Option

Dispersed Funding

Concerns were expressed about the broad array of funding options. Of course, funding opportunities – for vehicles and charging infrastructure – are appreciated by all. However, the opportunities are spread across Federal, State and local sources, all of which have different qualification and participation criteria.  One example was cited indicating that roughly 30% of the initial rough-order-of-magnitude (RoM) ZEV-conversion budget had been identified following a comprehensive review of available programs and, that filtering through various programs required an additional (FTE) full-time equivalent. Although it was suggested that aggregation of funding programs would reduce fleet-owner administrative overhead, there is no evidence that such aggregation is feasible.

Infrastructure Delays

Following CARB’s prior public ACF meeting, dialog continued during the workshop regarding charging infrastructure challenges. Currently, the majority of publicly accessible charging was located and installed in consideration of privately owned, light duty vehicles.  The reliability of charging service providers, access methods and pricing vary widely. Considering these limitations, most fleets will require the installation of depot charging. With respect to such construction projects, the Air Resources Board recognizes that several factors like unexpected safety issues, discovery of archeological resources, equipment shipping delays – outside the realm of control of the fleet owner – impact when a project can commence or complete.  To account for such factors, CARB reiterated that extensions under certain conditions can be granted for up to two years, for a total project time of up to three years.  Considerable commentary during the meeting expressed concerns that these two and three-year limits may not be sufficient given limitations of the local utility’s existing infrastructure and process.

Digester Gas and SB1383

For waste water agencies that have made financial commitments related SB1383 (SLCP and the gas-conversion of biosolids) there is the additional challenge of determining how to redirect generated methane from digesters, noting the limitation that such gas is not “pipeline quality”; it generally cannot be injected into any natural gas pipeline. Some workshop commentary emphasized the need for guidance or direction regarding what agencies should or must be planning with respect to alternative uses of digester methane that may be prohibited under new, potentially contradictory regulation^[6].

Daily Use Exemption

Of particular importance for heavier vehicles and those with power take-off (PTO) equipment, like compressors and pumps – are the provisions and criteria associated with the Daily Usage Exemption. During the workshop CARB emphasized that, “10% of [the] fleet must be ZEV to apply.”^[7] When this condition is met, and appropriate physics based math (e.g, ½ mv^2) is used to account vehicle weight and average speed, PTO energy usage, and well-known data-backed relationships between ambient temperature and varying energy consumption, CARB made it clear that they will consider such exemptions in accordance with specific types of fleet-operations data when accompanied by submission of “the calculation and results.”^[8] Several comments were made expressing concern about the precise data, methods and criteria deemed appropriate. It appears clear – based on the proposed regulation and workshop discussion – that such exemption requests will need to be comprehensively documented.

Next Steps

As proceedings continue, CARB is expected to post a “15-Day Change Package” in March which will open up a formal comment period. A Second Board Hearing is planned for April 27-28.

TerraVerde Can Help

TerraVerde Energy is an independent energy consulting firm proudly supporting California public agencies since 2009 and serves as ACWA’s Preferred Provider for fleet electrification planning services. As your agency looks to identify the path forward, TerraVerde can provide your agency with a clear, actionable assessment of your options, costs, challenges, and opportunities; enabling your team to take an intelligent, risk-mitigated approach to fleet electrification. We would welcome the opportunity to meet with your team and discuss your fleet electrification planning needs. Write to us at hello@terraverde.energy to get started today.

[1] https://ww2.arb.ca.gov/lcti-california-collaborative-advanced-technology-drayage-truck-demonstration-project

[2] CARB ACF Workshop, slide 60

[3] “…snow removal vehicles” Appendix A-2, Preliminary Draft Regulation Order, High Priority and Federal Fleets Requirements

[4] See ACF Workshop slide 73

[5] See Appendix A-2, Preliminary Draft Regulation Order, High Priority and Federal Fleets Requirements 2015.2(b) and ACF Workshop slide 26

[6] Appendix A-2, Preliminary Draft Regulation Order, High Priority and Federal Fleets Requirements 2015.2(e)

[7] See CARB ACF Workshop slide 66

[8] See recently redlined Appendix A-1, Preliminary Draft Regulation Order, State and Local Government Agency Fleet Requirements 2013.1(b)(3) and 2013.1(b)(6)