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CC - (1) Termination of an Existing Agreement with NRG for an Electric Vehicle Charging Station Subscription Program at City Hall; (2) Approval of an Agreement with NRG for the Purchase and Installation of Eight Electric Vehicle Charging Stations at City Hall for Employee Use in the Amount of $9,432; (3) Approval of a Flat Fee of $455 Annually for Employee Use of the Charging Stations; and (4) Approval of the Continuance of a $260 Annual Incentive from Non-General Funds for Employees who Charge their Electric Vehicles at Work as Part of the City’s Employee Commute Emissions Reduction Program.
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Contact Person/Dept: Joe Susca/Public Works
Phone Number: 310-253-5636
Fiscal Impact: Yes [X] No [] General Fund: Yes [X] No []
Public Hearing: [] Action Item: [] Attachments: Yes [] No [X]
Commission Action Required: Yes [] No [X] Date:
Commission Name:
Public Notification: (E-Mail) Meetings and Agendas - City Council (03/24/16); NRG (03/07/16); All City employees who responded to the 2015 Electric Vehicle Survey (03/23/16)
Department Approval: Charles D. Herbertson, Director of Public Works/City Engineer (03/18/16)
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RECOMMENDATION
Staff recommends the City Council: (1) terminate the existing agreement with NRG to provide a subscription program to employees who wish to charge their electric vehicles at work; (2) approve an agreement with NRG for the purchase and installation of eight electric vehicle charging stations at City Hall for employee use in the amount of $9,432; (3) establish a flat annual fee of $455 for their use, and (4) continue to provide a $260 annual incentive for employees who charge their electric vehicles at work from the City’s Employee Commute Emissions Reduction Program, CIP PF003 Electric Vehicle Charging Stations.
BACKGROUND:
On May 11, 2015, the City Council approved three agreements with NRG: one to install three Electric Vehicle (EV) charging stations at the Ince Parking Structure for public use; a second for the installation of one EV charging station at City Hall on P1 for public use; and a third to offer up to eight EV charging stations at City Hall on P2 for employee use through a subscription program. The public charging stations at the Ince Parking Structure and City Hall have been installed and are frequently used.
In addition to these three agreements, the City also implemented an in-house Plug-In Hybrid Electric Vehicle (PHEV) employee charge-at-work program comprised of six parking spaces on City Hall’s Level P2 parking area using standard 120-volt electrical outlets. Currently, four of the six spaces are occupied by employees who own or lease a PHEV.
Administrative Procedure No. 2015-AP001 (Procedure) was issued by the City Manager for employee use of PHEV and EV charging stations at City Hall. Among other things, the Procedure requires employees to subscribe to NRG to use one of their EV charging stations.
The City’s existing 18-month agreement with NRG to install up to eight EV charging stations through an employee subscription program at City Hall requires NRG to:
• Install the EV charging stations at no cost to the City.
• Own and maintain the EV charging stations at NRG expense.
• Invoice employees who subscribe to NRG for their use the EV charging station.
• Monitor employee use of electricity and subsequently remit 100% of the cost to the City as reimbursement.
• Indemnify and hold the City harmless from claims of property damage and personal injury stemming from use of the EV charging stations.
DISCUSSION:
NRG has completed installation of the electrical transformer, conduit, wiring, and metal framing (Stubs) necessary to mount up to eight EV charging stations on City Hall’s Level P2 parking area for employee use. However, no employee has yet subscribed to their services. NRG attributes this lack of employee participation to two main factors:
1. NRG’s business model requires employees to pay a $99 one-time installation fee plus a $30 per month subscription fee plus the cost of the electricity they use (which NRG estimates to be $20-$35 per month additional) for a total of $50-$65 per month. Employees pay a net cost of $30-$45/month after receiving the City’s $10 per pay period incentive from the City’s Employee Commute Emissions Reduction Program (Emissions Reduction Program).
2. Many businesses who want to attract customers and employees are providing EV charging stations at their facilities for little or no cost, and EV drivers have grown accustomed to receiving free or deeply discounted electricity.
NRG indicated that their existing business model only covers their capital and administrative costs and, as such, they are unable to reduce their subscription fees. Due to the lack of employee participation experienced by most of NRG’s clients, NRG has decided to discontinue the subscription program and has requested the City terminate the existing agreement with them. Pursuant to the terms of the agreement, upon termination the City takes ownership of the Stubs at no cost to the City.
To replace the previous employee subscription program provided under the current agreement, NRG has offered the City the following two options:
Option 1: City to Lease “Smart” EV Chargers from NRG
• A “Smart” Charger is a NRG networked EV charger that provides:
• Login authentication
• Electricity usage monitoring
• Subscriber billing
• City to pay an initial $3,495 installation fee per charger.
• City to pay $39.95 per month lease per charger.
• NRG monitors employee use of electricity and subsequently remits 100% of the cost to the City as reimbursement.
• EV charger maintenance and repairs provided by NRG at no additional cost.
Setting aside the initial capital outlay, if the City Council decided to pass the monthly cost of Option 1 on to the City’s employees, it would increase the existing net cost by $10 per month over the existing program. Such cost increase could be viewed as a further disincentive for use of the EV charging stations.
Option 2: City to Purchase “Basic” EV Chargers
• A “Basic” Charger is:
• Not hooked up to a network;
• Has no login screen; and
• Does not monitor the usage of electricity.
• City cost of $1,179 per EV charger, including installation.
• Because the charger is purchased by the City, the charger comes with a one-year manufacturer’s warranty.
Essentially, Option 2 is the equivalent of mounting an extension cord upon the existing Stubs and requires little or no maintenance. Staff researched the cost to purchase a 240-Volt EV charger with a 25’ power cord and found NRG’s offer of $1,179 per charger with installation to be reasonable. Staff recommends that if the City Council wishes to continue to offer the City’s employees the charge-at-work program, that NRG’s Option 2 be selected.
Employee EV Survey
In early 2015, an Employee EV Survey (Survey) was conducted, and 107 of the City’s 700 employees responded. Of those, two currently drive an EV and charge their vehicles at home. An additional 17 employees indicated they are considering the lease or purchase of an EV within the next three years. All 17 of the respondents indicated they were interested in charging at work. Of those, six were willing to pay the associated NRG subscription fee to do so provided they received an incentive to offset their subscription cost. Generally speaking, the Survey revealed that those employees with longer commuting distances were interested in charging at work and were willing to pay the associated fee to do so.
Conclusions
• As more public and workplace EV charging stations become available, their presence will reduce EV “range anxiety” and, as a consequence, the number of EV sales and leases will increase.
• According to the Survey and the US Department of Transportation, nearly all employees travel less than 70 miles round trip to/from work, and all EV’s on the market have a range that exceeds 70 miles (an average of 89 miles, if you exclude Tesla vehicles). Thus, EV drivers do not have to charge at work before driving home.
• 78% of employees travel 40 miles or less roundtrip to/from work.
• Employees who own or lease an EV typically charge their vehicle at home. If the City Council wishes to continue to offer a charge-at-work program, the employee cost to participate should be equivalent to, or less than, their cost to charge at home.
Fee for Employee EV Charging
Based on the capacity of the average battery of a PHEV and the cost of electricity to recharge it, the City currently charges PHEV drivers a flat fee of $325 annually. Eligible employees receive a $260 incentive through the City’s Emission Reduction Program for a net cost of $65 annually per employee.
Based on a 40-mile roundtrip to/from work (which is the maximum distance 78% of drivers travel) and the associated cost of electricity to recharge a battery for that range, staff recommends that the City Council continue to offer an employee charge-at-work program and a flat annual fee of $455 be established for the charging station’s use. Staff also recommends that the existing $260 annual incentive provided through the City’s Emission Reduction Program be continued, resulting in a net cost of $195 annually per employee. For nearly all employees, the $195 net annual cost will be less than their cost to charge at home. Additionally, for employees that do not have access to charging at home, the City’s charging stations may act as an incentive for those employees to purchase an EV.
Should the City Council take the recommended actions, the City Manager would revise the Administrative Procedure consistent with the City Council’s actions.
FISCAL IMPACT
The City Council Adopted Budget for Fiscal Year 2015/2016 includes CIP No. PO003 Electric Vehicle Charging Stations. Sufficient funds remain to cover the $9,432 cost of the proposed new NRG agreement.
Incentives provided to employees as part of the City’s Emission Reduction Program are funded by Prop C Local Return funds (no City General Funds are used) and sufficient funds exist in the City Council Adopted Budget for Fiscal Year 2015/2016 - Emission Reduction Program to continue to offer eligible PHEV and all EV driving employees a $260 annual incentive.
ATTACHMENTS
None.
RECOMMENDED MOTION(S)
That the City Council:
1. Terminate the existing agreement with NRG for an employee electric vehicle charging subscription program at City Hall; and,
2. Approve a new agreement with NRG for the purchase and installation of eight Basic EV Charging Stations at City Hall for employee use in the amount of $9,432; and,
3. Establish a $455 annual fee for employee use of the EV Charging Stations; and,
4. Continue to provide a $260 annual incentive per employee that is funded by the City’s Emission Reduction Program; and,
5. Authorize the City Attorney to review/prepare the necessary documents; and, and,
6. Authorize the City Manager to execute such documents on behalf of the City.