SECTION 20.437. Waiver of Vehicles to Meet Required Fleet Percentages

(a) Any state agency operating a fleet of more than 15 motor vehicles, excluding law enforcement and emergency vehicles, shall have a fleet percentage of alternative fuel vehicles equal to or greater than 30% of the total number of such vehicles operated by September 1, 1994, and a percent equal to or greater than 50% by September 1, 1996.

(b) A state agency desiring a waiver from subsection (a) of this section shall submit a certification to the Office of Vehicle Fleet Management of the comptroller that meets one or more of the following conditions:

(1) the vehicles will be operating primarily in an area in which neither the agency nor a supplier has or can reasonably be expected to establish a central refueling station for alternative fuels;

(2) the agency is unable to acquire or be provided equipment or refueling facilities necessary to operate vehicles using an alternative fuel at a projected cost that is reasonably expected to result in no greater net costs than the continued use of traditional gasoline or diesel fuels measured over the expected useful life of the equipment or facilities supplied; or

(3) the agency is unable to acquire or be provided any alternative fuel vehicles or equipment necessary for such vehicles.

(c) The subsection (b) of this section certification must be sent to the Office of Vehicle Fleet Management of the comptroller and must be accompanied by the information described in either subsection (d) or (e) of this section.

(d) A subsection (b)(1) of this section certification shall also contain the:

(1) total number of vehicles in the fleet subject to these rules;

(2) total number of vehicles currently operating on an approved alternative fuel;

(3) percentage of the fleet subject to these rules that is impacted by the requested waiver;

(4) vehicle license plate number of each vehicle to be waived;

(5) city or town nearest to where each vehicle identified in paragraph (4) of this subsection is normally garaged;

(6) name of any alternative fuels vendor or supplier with a stationary supply of fuel within a 10-mile radius, or mobile fuel suppliers within a 30-mile radius of where each vehicle identified in paragraph (4) of this subsection is normally garaged; and

(7) correspondence or other documentation relevant to the request for waiver or reduction.

(e) A subsection (b)(2) of this section certification must be accompanied and supported by a state agency prepared cost benefit analysis for each alternative fuel which includes the following:

(1) total initial cost of providing the entire alternative fuel facility, or a portion thereof, including, but not limited to, the following (if the equipment is provided at no initial cost to the agency and the fuel vendor plans to recoup the initial cost through increased fuel costs, then only those items furnished by the agency such as land shall be included in the total initial cost):

(A) cost of land at current market value, on which to install any compressor station, tanks, and refueling facilities;

(B) cost of compressor and related facilities, including cost of providing operating power, if not already available at the site, any engineering work for site preparation;

(C) cost of refueling and related facilities, including fast and slow refueling stations, refueling tanks;

(D) cost of providing alternative fuel to the site such as gas pipeline;

(E) cost of engine conversion kits and fuel cylinders and/or tanks, including installation costs;

(F) cost of initial training and certification of mechanics, and training of drivers to operate alternative fuel vehicles, if required;

(G) cost of future major overhauls of the compressor system according to the compressor manufacturer's recommended major overhaul schedule (see paragraph (7) of this subsection);

(H) cost of future major overhauls or replacement of the refueling stations if the expected life is less than 30 years;

(I) costs of future replacement of fuel conversion kits (see paragraph (7) of this subsection); and

(J) any other costs or expenditures necessary to provide a complete, turnkey facility;

(2) total annual mileage expected for the vehicle fleet or for those vehicles covered by the cost study;

(3) total annual fuel savings calculated from the difference between the fuel costs using gasoline/diesel and using alternative fuel for the total annual mileage in paragraph (2) of this subsection;

(4) an estimate of any additional savings such as reduced maintenance costs (e.g., extended oil change intervals, longer spark plug life, and other savings in maintenance);

(5) an estimate of the total annual operating costs, including, but not limited to, the following:

(A) compressor and refueling station maintenance, not replacement cost or cost of major overhaul (see paragraph (1) of this subsection);

(B) cost of labor for removing, testing, and reinstalling alternative fuel cylinders/tanks for inspection and testing;

(C) cost of maintenance and repair of engine conversion kits;

(D) cost of testing fuel cylinders/tanks;

(E) cost of training additional mechanics and labor cost differential, if any, for mechanics and other personnel servicing alternative fuel equipment;

(F) cost of electrical power to operate the compressors and refueling stations; and

(G) other annual costs uniquely associated with the operation of the alternative fuel program;

(6) determine the total annual savings from the difference between the total savings (sum of paragraphs (3) and (4) of this subsection), and the total annual operating costs, paragraph (5) of this subsection;

(7) estimate the expected life of the various components of the system. If accurate lifetimes are not available, the following shall be used:

(A) conversion kits = 15 years (if removed from old and reinstalled on new vehicles; if not reinstalled, use six years for conversion kits for automobiles and small buses, and 10 years for light and medium-duty trucks and large buses);

(B) fuel cylinders/tanks = 30 years (or less if lifetimes are not 30 years); and

(C) compressors = 30 years (or replacement at the time recommended by the compressor manufacturer for the third major overhaul. If not known or not listed by the manufacturer, use 10 years):

(8) determine the capitalized costs of the various components in subsection (e) of this section and then calculate the payback period by using the total capitalized costs; total annual savings, paragraph (6) of this subsection; and 10% cost of money (or the actual interest rate applicable at the time the calculation is made) in standard life cycle cost benefit analysis formulae; and

(9) the comptroller may assist state agencies and school districts in making these calculations.

(f) The director will review the request for waiver or reduction of the requirements of subsection (a) of this section and issue a written waiver or reduction to the state agency or school district. A waiver or reduction may be issued under this section for a period of up to two years, at the discretion of the director. A waiver will be granted on a certification under subsection (b)(2) of this section if the total capitalized cost, P, max. is more than 9.43 times the total annual savings, A, for an expected compressor or system lifetime of 30 years. If the compressor lifetime is less than 30 years, or if a compressor is not used, and the component in subsection (e)(1) of this section with the longest expected lifetime is less than 30 years, a waiver will be granted if the total capitalized costs are more than the following values (if other than 10% interest is used, adjust accordingly).

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(g) The comptroller keeps these waivers for up to two years for use in waiving the purchasing restrictions for state agencies in §20.235 of this title (relating to Purchase of Motor Vehicles).

Source Note: The provisions of this §20.437 adopted to be effective January 24, 2017, 42 TexReg 238