## Appendix K

School Bus Cost MethodologyK-1



### School Bus Cost Methodology

This appendix describes the methodology and staff a ssumptions made when determining the associated costs to both public and private school bus fleets for compliance with the proposed regulation. The regul atory cost of the proposed regulation on school bus fleets was estimated to be $69 million, with $27 million in costs attributed to the public school bus fleet and $42 m illion in regulatory costs to be incurred by the private school bus fleets, based on the cost value of money analysis in 2008 dollars. The capitol costs associated with the pro posed regulation on school bus fleets is estimated at $190 million, with $119 million bei ng associated with public school bus fleet compliance and $72 million in capitol outlays for the private school bus fleet.

A. Methodology

Costs of regulatory compliance are divided between publically owned fleets and privately owned school bus fleets based on the cost associated with retrofit of existing buses and the replacement of school buses that are not retrofittable with a VDECS. The regulatory cost for school bus replacement was estimated by multiplying the number of school buses that need to be replaced by the fraction of years remaining in the buses service life multiplied by the cost for a replacement school bus. It was

assumed that a school bus that does not have a retr ofittable engine would be replaced with a new bus, rather than purchasing a used bus o r repowering the school bus with a newer engine.

The regulatory cost for school bus retrofits was es timated by multiplying the number of school buses that need to be retrofitted by the cos t for the applicable retrofit device. The applicable retrofit device utilized (passive or active) varies by model year and is

detailed below as well as the associated costs.

1. Implementation Options

It is assumed that public school bus fleets will fo llow the BACT Schedule for School Bus Fleets as the preferred compliance option and priva te fleets will use the BACT Percentage Limit method for compliance, see Table 1 below. Public school bus fleets

tend to have a distribution of older school buses w hile their private counterparts tend to have newer school bus fleets. For the purpose of e stimating the cost of the proposed regulation on school bus fleets it is assumed that no fleet would utilize the Fleet Average method for compliance with the proposed reg ulation, although some school bus fleets with large numbers of alternative-fueled buses and relatively few older dieselfueled buses could find the fleet average complianc e option less expensive.K-2

Table 1: Compliance Options Used in School Bus Cost Methodology

Compliance Deadline, as of January 1 BACT Schedule, Model

Year Buses Retrofitted by Compliance Deadline Percentage of Fleet Method, Percentage of Fleet Retrofitted by Compliance Date

2011 2000 & newer 25%

2012 1994 - 1999 50%

2013 1987 - 1993 75%

2014 Pre-1987 100%

2. School Bus Population

School buses are required to be inspected by the Ca lifornia Highway Patrol (CHP) every 13 months to insure that they are in good wor king order and meet all state and federal safety requirements. The CHP issues a CHP form 292 to indicate that a school bus is in compliance with all school bus safety req uirements and the form is required to be posted within the bus to legally transport stude nts from home to school. In 2006, the

CHP created a one-time electronic database of all t he vehicles in 2005 that received a CHP form 292. In the fall of 2006, in support of t he 2008 Lower-Emission School Bus Program guidelines, the ARB conducted phone surveys of public school districts with the pre-1987 school bus in their fleet to verify da ta presented in the CHP database. This 2005 CHP database has been a very important to ol for the ARB in determining funding allocations to local air districts for impl ementation of the Lower-Emission School Bus Program. From the 2005 CHP Safety Certificatio n Database it has been estimated that in 2010 there will be approximately 15,500 die sel-fueled school buses that will be covered by the proposed regulation, of which nearly one-half are already compliant with the proposed regulation or will be in the near futu re due to available State or local funding.

The population of school buses that are estimated t o need either replacement or retrofit to comply with the proposed regulation can be found in Table 2.K-3

Table 2: School Bus Population Needing Action to Co mply with

Proposed Regulation in 2010

Model Year Group Applicable

Retrofit Device Buses Requiring

Retrofit Buses Requiring

Replacement

Pubic Private Public Private

Pre-1987 No Device

Available 0 0 1642* 0*

1987 2-
Strokes No Device

Available 0 0 127* 15*

1988 to 1993

2-strokes No Device

Available 0 0 688 170

1987 to 1993

4-strokes Active DPF 658 151 0 0

1994 to 2002 1⁄2 Active 1⁄2

Passive 394 2016 0 0

2003 to 2006 Passive DPF 678 1773 0 0

* No associated costs for replacement in 2017.

3. Public Fleets

Public school bus fleets are typically owned by pub lic school districts, a Joint Powers Authority (JPA, formed by several public school dis tricts), County Departments of Education, the California Department of Education, or by public charter schools. The vast majority of public school bus fleets are owned and operated by public school districts or JPA’s. Public school bus fleets typic ally operate their own maintenance shops able to perform most school bus maintenance o perations. Public fleet size can vary between the rural one-bus school districts to the thousands of buses operated by Los Angeles Unified School District. As a result, the composition of the fleet can consist of many different fuel types, such as gasoline, die sel, natural gas, and propane in many different weight categories. Only diesel-fueled sc hool buses over 14,000 GVWR are impacted by this proposed regulation.

4. Private Fleets

Private school bus fleets can be owned by companies , individuals, or private schools.

Private fleets can have their own maintenance facil ities or can utilize maintenance contracts with engine dealers or other maintenance facilities. Private school bus fleets can be as varied as their publicly owned counterpar ts, with fleets of one school bus to thousands of buses found in larger private school b us contractors.K-4

5. Past and Current School Bus Retrofits and Replac ements

In the cost calculation for school buses affected b y the proposed regulation it was assumed that all Proposition 1B funds have been ful ly expended. It is estimated that under the 2008 Lower-Emission School Bus Program th at approximately 1,100 pre1987 model year school buses will be replaced and 3 ,500 Level-3 Diesel Particulate Filters (DPF) will be installed on middle-aged scho ol buses. The estimated numbers of retrofit device installations from past and current funding sources are provided in Table 3 below. It was assumed that past retrofit fundin g was allocated equally toward the retrofit of model years 1994 to 2002 based on each model year’s representation in the school bus population. Current funding with Propos ition 1B funds was assumed to be allocated toward the retrofit of model year 1987 to 2006 bus engines based on that model years representation in the school bus popula tion. Staff assumed that 90% of past retrofit funds have been allocated to public f leets and that 60% of Proposition 1B retrofit funds will be used by public school bus fl eets, with the remaining retrofit funds going to private school bus fleets. It is importan t to note that retrofitted school buses with local funds have not been adequately captured. Therefore, the number of buses already retrofitted are slightly underestimated.

Table 3: School Bus Population Already Retrofitted with VDECS in 2010

MY Group Funding Source Public Private

1994 to 2002 State and Local 3304 367

1987 to 2006 Prop 1B 2100* 1400* *Anticipated, funds are currently being distribut ed.

School buses that have been replaced or will be rep laced with current funding have been removed from the population of school buses th at still need action to comply with the proposed regulation.

B. Costs

1. School Bus Replacement Cost

Currently, the Lower-Emission School Bus Program gu idelines estimate the cost for a replacement school bus to be $140,000. The replace ment school bus is assumed to be a transit-style diesel-fueled school bus, including tax. This same estimate is used as the cost associated with a school bus requiring rep lacement to be compliant with the proposed regulation.

The proposed regulation would require school buses manufactured before April 1, 1977 (pre-1977), before minimum federal safety standards , be removed from service by January 1, 2012. Currently, the Lower-Emission Sch ool Bus Program provides $140,000, without school district match, for the re placement of eligible pre-1977 public school buses. Therefore, no costs associated with the proposed regulation are attributed to the replacement of pre-1977 school bu ses under the proposed regulation.K-5

In March of 2008 the ARB approved guideline revisio ns to the Lower-Emission School Bus Program where it was determined that 74 pre-197 7 school buses were still in operation in public school bus fleets. All identif ied pre-1977 public school buses eligible for replacement are currently funded, with delivery of replacement buses expected by February 1, 2010. However, the existence of uniden tified pre-1977 school buses in the public school bus fleet is probable into the near f uture.

School buses that were manufactured before 1987, as well as those that utilize twostroke diesel engines are currently determined not to be retrofittable. Therefore, staff assumed these buses would be replaced in 2017. The service life of a school bus is estimated at 30 years, and by 2017 all 1987 and old er buses are at or beyond their service life. Therefore, staff assumed that there is no associated regulatory cost for the replacement of pre-1987 model year school buses due to natural school bus fleet

turnover.

It is estimated from the 2005 CHP safety certificat ion database that approximately 1,000 two-stroke diesel fueled school buses model year 19 87 to 1993 are still in use with

California school bus fleets. These buses tend to have large seating capacity, some upwards of 90 students, which public school distric ts are reluctant to replace due to operational budgetary constraints. The estimated 1 000, 1987 to 1993 two-stroke school buses will require replacement in 2017, in most cas es before the end of their service life. The regulatory costs associated with school bus replacement are prorated to the remaining service life of the school bus.

Using the described school bus replacement costs an d the school bus population requiring replacement described in Table 2, it was calculated that the replacement cost to public fleets would be $8.8 million and the cost to private fleets would be $2.6 million, based on the cost value of money analysis in 2008 d ollars.

It is estimated that the remaining, 5670 school bus es shown in Table 2, subject to the proposed regulation would meet the requirements by installing a VDECS as defined in the proposed regulation.

2. School Bus Retrofit Costs

It is estimated that a passive-style DPF cost about $11,000 and an active-style DPF will cost approximately $15,000. The only active-style VDECS currently available for school buses requires the installation of electrical infra structure to allow for the DPF to be regenerated. Both active and passive-style DPFs ha ve seen extensively use in the

statewide school bus fleet.

School buses with four-stroke engines were assumed to be retrofittable with active or passive-style DPFs according to Table 4 below. Sch ool buses with 2007 and newer model year engines are already equipped with partic ulate filters that meet the requirements of the proposed regulation.K-6

Table 4: Applicable Retrofit Devices for Model Year Groups

My Group Applicable Retrofit Device for Applicable MY Group

Pre-1987 No Retrofit Device Available

1987 to 1993 Active-Style DPF

1994 to 2002 1⁄2 Active-Style 1⁄2 Passive-Style

2003 to 2006 Passive-Style

Using the described school bus retrofit costs and t he school bus population needing retrofit to meet the requirements of the proposed r egulation, it was calculated that the retrofit costs to public fleets would be $18 millio n and the cost to private fleets would be $39 million, based on the cost value of money analy sis in 2008 dollars.

3. Maintenance and Electrical Costs

Public and private school bus fleets costs associat ed with filter maintenance and electrical costs are accounted for in Appendix I. Costs associated with reporting requirements to public or private school bus fleets are considered in Appendix I. The costs to public school districts that contract with private entities which would see additional operational costs due to the proposed re gulation are not considered as a cost to the public school district but are attributed to the costs for private school bus fleets to comply with the proposed regulation.