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Fleet Electrification Guidance & Cost of CarbonCity of Dubuque Consent Items # 06. City Council Meeting ITEM TITLE: Fleet Electrification Guidance & Cost of Carbon SUMMARY: SUGGESTED DISPOSITION: ATTACHMENTS: Description Copyrighted January 3, 2023 City Manager recommending City Council approval of the Fleet Electrification— Rationale and Implementation Guidance. Suggested Disposition: Receive and File; Approve Electric Vehicle Guidance-MVM Memo Staff Memo Fleet Guidance and Implementation Strategy Example of Cost of Carbon in Vehicle Purchases Type City Manager Memo Staff Memo Supporting Documentation Supporting Documentation THE C DUjIBQTE Masterpiece on the Mississippi TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Fleet Electrification Guidance & Cost of Carbon DATE: December 21, 2022 Dubuque WAWca 914 ii 2007-2012.2013 2017*2019 Sustainable Community Coordinator Gina Bell is recommending City Council approval of the Fleet Electrification — Rationale and Implementation Guidance which sets the value for the social cost of carbon to $30 per metric tons of carbon dioxide equivalent (MtCO2e) to be used in total cost of ownership calculations for City vehicle purchases and in accordance with the 50% by 2030 Community Climate Action & Resiliency Plan. I concur with the recommendation and respectfully request Mayor and City Council approval. v Mic ael C. Van Milligen MCVM:sv Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Gina Bell, Sustainable Community Coordinator THE COF DtUB E Masterpiece on the Mississippi MEMORANDUM TO: Michael Van Milligen, City Manager FROM: Gina Bell, Sustainable Community Coordinator SUBJECT: Fleet Electrification Guidance & Cost of Carbon DATE: December 19, 2022 INTRODUCTION Dubuque 111•1meriea City II 2007-2012.2013 2017*2019 This memo is to request City Council approval of the Fleet Electrification — Rationale and Implementation Guidance which sets the value for the social cost of carbon to $30 per metric tons of carbon dioxide equivalent (MtCO2e) in accordance with the 50% by 2030 Community Climate Action & Resiliency Plan. BACKGROUND The 50% by 2030 Community Climate Action & Resiliency Plan (50% by 2030 Plan), adopted in 2013 and updated in 2020, is a non -binding, voluntary effort to identify opportunities to reduce Dubuque's community greenhouse gas emissions and serves as an integral step in moving towards our Sustainable Dubuque vision. The 50% by 2030 Plan calls for an update to the City vehicle purchasing policy (including The Jule transit) and budget process to default to electric vehicles (EVs) and alternative fuels, with traditional internal combustion engine (ICE) vehicles as optional, requiring proof of need. The goal as outlined in the 50% by 2030 Plan is to achieve 50% EVs within City Fleet by 2030 and maximize utilization of other clean technologies for fleet. City staff worked closely with a team of consultants, with expertise in facilitating and developing an update to our fleet electrification feasibility in 2020 and has spent the past two years working on various projects including two successful VW settlement grants for EV chargers which will be installed by spring of 2023. We have been assessing various city owned properties for additional charging capacity and infrastructure as well. On December 21, 2020, City Council heard a presentation about plans to electrify the city - owned fleet. The Council voted unanimously to consider a valuation to apply to the vehicle total cost of ownership. The social cost of carbon metric is proposed to be used in vehicle purchasing decisions to calculate economic damages associated with a rise in greenhouse gas emissions from burning fossil fuels and other activities. We have since developed guidance and propose $30/MtCO2e which, while conservative by global standards, it is a relevant place to begin our efforts in Dubuque. DISCUSSION The updated fleet guidance is the mechanism by which City departments can begin implementation of climate action in major investments (vehicles) and select high -carbon - impact decisions. "Social cost of carbon" is a term used to place value on the environmental impact of greenhouse gas emissions, for our purposes, emissions associated with City vehicle purchases. The value is then factored into vehicle total cost of ownership calculations to compare the full cost of conventional and electric vehicles purchases and lifecycle costs. The intent of the City's internal cost of carbon calculation is to normalize the inclusion of climate impacts into projects, planning and policy decision -making. This practice establishes a framework that makes the cost of carbon much more visible in decision -making and creates a consistent mechanism for City staff to quantify actual or modeled costs associated with fleet vehicles. While much debate can be made as to the actual valuation of carbon, for our purposes, a modest $30/MtCO2e is proposed. The Biden administration raised the social cost of carbon to about $51 per metric ton. As we continue to address climate risk, environmental justice, and equity, the social cost of greenhouse gases needs to be considered. In addition to climate benefits, the expansion of clean transportation choices is also critical to improving air quality in Dubuque. Exhaust from vehicles creates pollution such as ozone and particulate matter. The impacts of high pollution levels are numerous, such as increased levels of cardiovascular and respiratory illness, damage to respiratory systems, and even shortened life spans. BUDGETIMPACT This valuation and guidance will be a case -by -case basis and only applied to vehicle purchases at this time. With Inflation Reduction Act funding to assist with municipal fleet electrification, there may be no budget implications outside of normal replacement cycle costs. REQUESTED ACTION The requested action is for City Council to review and approve the Fleet Electrification — Rationale and Implementation Guidance and set the social valuation for the cost of carbon to $30/MtCO2e to be used in total cost of ownership calculations for City vehicle purchases. Enclosure City of Dubuque Fleet Electrification — Rationale and Implementation Guidance Overview Dubuque's 50% by 2030 Community Climate Action and Resiliency Plan (50% by 2030 Plan) calls for an update to the City vehicle purchasing policy and budget process to increase adoption of Electric Vehicles (EVs) and other clean vehicles and establish minimum fuel efficiency requirements for continue use Internal Combustion Engine (ICE) vehicles. In 2018, the transportation sector represented approximately 20% of local community greenhouse gas emissions. As the recently updated 50% by 2030 Plan states, prioritizing the use and purchase of low- and no -emission vehicles, such as EVs, demonstrates the City's leadership in transitioning to a cleaner fleet and reducing municipal vehicle emissions, setting an example for the larger community to join in decreasing greenhouse gas emissions and costs. A clean fleet has two main objectives — reducing carbon emissions and improving operational efficiency. Part 1 of this document provides a rationale for purchasing clean vehicles, and Part 2 outlines an implementation strategy. The City's non -transit fleet is comprised of 233 vehicles and accounts for just over 50% of all emissions produced by the city's fleet. At this time, the Administrative Policy 3.09 Purchase of City Vehicles has been updated to focus on fleet electrification and will initially apply to light -duty vehicles only. The terms will expand to cover medium and heavy-duty fleet vehicles as electric models become commercially available and cost competitive. Electrification will be coupled with other sustainable fleet strategies including idle reduction, route optimization (as possible), review of fleet usage and rightsizing the fleet. Part 1: Electric Vehicle (EV) and Other Clean Vehicle Purchase Rationale Rationale for Municipal Fleet Electrification Policy Recommendations There are numerous potential benefits that support development of a City Fleet & Vehicle Electrification policy, in conjunction with the existing City Vehicle Purchasing Policy. Some of the primary reasons include: Greenhouse gas emission reduction: Dubuque's Community Climate Action, Adaptation and Resiliency Plan (50% by 2030 Plan) includes a target for the city to reduce total greenhouse gas emissions by 50% of 2003 levels by 2030, and in 2020, City Council set a target of being the first city in the State of Iowa achieving carbon neutrality as recommended in the 50% by 2030 Plan. The 50% by 2030 Plan outlines several municipal and community -wide strategies to achieve the City's climate protection goals, such as the adoption of electric vehicles. On -road vehicle travel accounted for 15% of our 2003 baseline emissions and in the most recent update accounted for 17%. • Air quality, health & equity: Mobile sources contribute substantially to criteria pollutant emissions in Dubuque, both carbon monoxide (CO) emissions, and nitrogen oxides (NOx) emissions. These criteria pollutants contribute to respiratory, cardiovascular, and other health issues. Minority and underserved communities are frequently disproportionately impacted by air pollution, and in Dubuque suffer from related health impacts - such as asthma - in greater numbers. • Strategic electrification: As more solar and wind power is used as a source for regional energy, the electricity used to power EVs will become cleaner. In its 2020 Clean Energy Blueprint, Alliant Energy pledged to eliminate all coal from their generation fleet by 2040 and aspiring to achieve net -zero carbon dioxide emissions from the electricity generated by 2050. • Cost-effective: Declining upfront costs for EVs means that transitioning to electric fleets is becoming affordable, particularly for light -duty vehicles. Additionally, incentives, such as offered by dealers and Alliant Energy, plus awards from the State of Iowa Department of Transportation Volkswagen Clean Air Act Settlement program, are increasingly available to help offset the upfront costs of fleet electrification. Recent federal legislation has made the transition to EVs even more affordable for municipalities. • Total cost of ownership savings: Due to lower fuel costs and fewer maintenance needs, electric vehicles are estimated to provide savings on a total cost of ownership basis, particularly when replacing high mileage, low fuel efficiency vehicles. Fleets across the country have documented maintenance costs for EVs that are less than half that for conventional vehicles. • Leading by example: Incorporating EVs into the City fleet helps raise awareness among employees, auto dealerships and local auto industry stakeholders, and the general public, in turn enabling greater adoption of EVs. • Best in class: Dubuque joins other cities that have set goals or created purchasing policies designed to accelerate vehicle electrification and desires to continue to lead small to midsized cities. Clean Vehicle Policy Terms The changes to the existing City Administrative Policy 3.09 (Purchase of City Vehicles) require departments to prioritize electric vehicles when procuring new vehicles for the City fleet, except when there is no electric model to suit the operating needs for the vehicle being replaced, or there is no cost- effective electric alternative. In those cases, departments are required to prioritize purchase of a clean vehicle pursuant to the following structure: (1) plug-in hybrid electric vehicle (PHEV), (2) hybrid -electric vehicle (HEV), (3) alternative fuel or another vehicle with demonstrated lowered emissions than the vehicle eligible for replacement. The city will continue to explore charging capabilities and options to support fleet transition. Definitions: Cost-effective: An electric vehicle will be considered cost-effective if its estimated lifecycle cost is within 10% of a comparable conventional vehicle's lifecycle cost. This threshold helps provide a buffer for small variances in the lifecycle cost analysis due to assumptions that are subject to fluctuation (e.g., future fuel prices). It also accounts for additional indirect social and 2 environmental benefits, such as air pollution reduction and local jobs benefits from EVSE installation, not captured explicitly in the lifecycle cost analysis. The cost of carbon for vehicle purchases is proposed to be set to $30/MCO2e (Metric tons of carbon dioxide equivalent) and shall be factored into lifecycle cost equation. Lifecycle cost: The lifecycle cost consists of (1) all capital acquisition costs - including vehicle purchase and any associated charging infrastructure — (2) operating costs over the expected life of the vehicle - including fuel/energy and maintenance costs- and (3) estimated environmental benefits of avoided greenhouse gas emissions. Estimated Clean Vehicle Policy Impact: Based on projected EV model availability and costs, the analysis projects a policy update as recommended is expected to result in 9% of total new non -transit purchases being electric vehicles by 2025, and 58% by 2032 (Table 2). Table 1: Vehicles in City Fleet Vehicle Type Current Fleet Breakdown Cars and SUVs 48 Pick-ups and Vans 109 Transit Bus 26 Short Haul Truck 61 TOTAL 244 Table 2: Percent Electric Vehicles of Fleet Vehicles by 2045 Vehicle Type 2025 2032 2045 Cars and SUVs 26% 58% 97% Pick-ups and Vans 9% 12% 97% Transit Bus 29% 36% 100% Short Haul Truck 30 Percent of total 16% 46% 100*% *Refer to page 2-5 of Fleet Electrification Feasibility Study Report, 2020 or pg. 36 By 2045, this policy shift is expected to result in an estimated 97% of the City's fleet being electric. The procurement trajectory above is estimated to result in emissions reductions by 2032 summarized in Table 3. Table 3: Projected Emissions Impact of Light -duty Electric Vehicle Purchases, 2022-2032 Description Cost/Emissions Impact Vehicles Converted to Electric by 2032 136 (58% of light -duty fleet) Total Vehicle Annual GHG Emission Savings 730 metric tons Table 3: Projected Emissions Impact of Transit Electric Vehicle Purchases, 2022-2032 Description Cost/Emissions Impact Vehicles Converted to Electric by 2032 9 Total Vehicle Annual GHG Emission Savings 490 metric tons annually 3 Part 2: Implementation Strategy Guidance to Departments: City Fleet & Vehicle Electrification While there are many cost -competitive electric light -duty sedan options in 2022, electric pickup, SUV, and van models are becoming more readily available, though still difficult to obtain. To respond to this evolving market, this offers guidance to support departments to make every effort to comply with the policy and support the City's climate goals, while the policy provisions also offer flexibility for compliance where needed. The Fleet Supervisor will assist departments to determine the best model based on operational needs or cost-effectiveness. We recognize that extreme temperatures as well as hilly terrain can affect the performance of EVs, contributing to range anxiety. In cold weather, for example, it is recommended to warm up the vehicle cabin while the EV is still plugged in to avoid using the battery. Extreme heat can also reduce range, and it is always recommended to keep the batter as cool as possible and park in the shade on hot days. EV manufacturers are constantly improving battery insulating or ventilation. In heavy duty vehicles, auxiliary heating/cooling systems running on fuel or using heat pump technologies are also common. Definitions of Clean Vehicles • Battery -electric vehicle (BEV) - EVs stand out from most cars on the market in that they don't have internal combustion engines. Instead of gasoline, these vehicles run solely on battery power. • Plug-in hybrid electric vehicle (PHEV) - PHEVs expand on the concept of the standard hybrid vehicle. They have both an internal combustion engine and a battery -powered electric motor. This allows the battery to store enough power to feed the electric motor and in turn decrease your gas usage by as much as 60 percent. • Hybrid vehicle (HEV) - HEVs run on both an internal combustion engine and an electric motor that uses energy stored in a battery. Hierarchy of Replacement Vehicles 1. Battery -electric vehicle (BEV) 2. Plug-in hybrid electric vehicle (PHEV) 3. Hybrid vehicle (HEV) 4. Conventional vehicle (gasoline or diesel -powered vehicle) Decision Tree for Complying with City Fleet & Vehicle Electrification Provision 4 *Same as current replacement process ** Estimated miles driven/shared vehicle to reach mileage needed for cost savings, less vehicles but shared within department, fleet to assist *** Expected savings/cost of future maintenance. (Fleet can assist with life cycle cost numbers and estimates of ICE and electric past and future.) Steps for Implementation 1. Identify potential clean vehicle replacement options: Available BEV, PHEV, HEV, and conventional vehicles can be researched and compared using the following sites (including light - duty, as well as medium- and heavy-duty vehicles): • Alternative Fuels Data Center at D.O.E. https://afdc.energy.gov/vehicles/search/ • Fuel Economy Information at D.O.E. www.fueleconomy.gov 2. Evaluate: Do clean vehicle models meet operational needs? As battery technology improves and costs decline, electric vehicle ranges have been increasing, and are now frequently more than 200 miles on a single charge. This is likely sufficient for many City vehicles' needs but should be considered if the vehicle in question is regularly driven longer distances than available vehicles' ranges. Vehicle ranges can be researched on www.fueleconomy.gov. Other operational needs to consider may include public safety vehicle capabilities, emergency response functions, and other operating requirements for specialized vehicles. If long distance travel is only occasionally necessary, please consider borrowing or use of personal vehicle instead of using long distance travel as the exception. 3. Review Funding: Are there available incentives or other funds to cover incremental cost? Departments are encouraged to work with the Sustainable Community Coordinator to pursue available incentives or to cover the incremental cost of a clean vehicle. Incentives may be available from dealers, Alliant Energy, the Iowa Department of Natural Resources Volkswagen Mitigation Settlement Trust program, the Inflation Reduction Act EV Light Duty Tax Credit, and other sources to help offset the upfront costs of fleet electrification. 4. Evaluate Cost: Are clean vehicle models cost-effective? The remainder of this document offers guidance for conducting a lifecycle cost analysis as defined by the City Vehicle Purchasing Policy to determine whether a suitable BEV, PHEV, or HEV replacement vehicle is cost-effective relative to the baseline conventional model. Departments should procure the lowest -emission cost- effective clean vehicle, according to the hierarchy of replacement vehicles above. Generally, vehicles most likely to see cost savings from switching to electric are likely to be driven at least 10,000 miles per year, though this will change as electric vehicle prices continue to decline. Lifecycle Cost Evaluation Guidance Departments seeking an exemption on a lifecycle cost basis are encouraged to develop an analysis utilizing the following equation. The following sources and inputs can be utilized to analyze the lifecycle cost of an electric vehicle compared with other vehicle types. Lifecycle cost is calculated as follows: Capital Costs (acquisition and infrastructure, less incentives received) + Lifetime Operating Costs (maintenance costs, fuel and/or energy costs, and other annual costs) + Lifetime Environmental Costs (cost of carbon associated with vehicle emissions) Total Lifecycle Cost of the vehicle 5 Individual components under lifetime operating costs and lifetime estimated environmental benefits of avoided GHG emissions can be calculated using the following equations. Recommended sources and inputs for these equations are explained further below. A template is available for departments to utilize using the following inputs and equations. Component Equation to calculate Lifetime Maintenance Costs = maintenance cost per mile * miles driven per year * vehicle lifetime Lifetime Fuel/Energy Costs = miles driven per year * vehicle lifetime _ fuel economy * fuel price Other Annual Costs = (annual insurance + annual registration) * vehicle lifetime Lifetime Cost of Carbon = miles driven per year * vehicle lifetime _ fuel economy * emissions factor * scaling factor * social cost of carbon Recommended Sources, Inputs, and Assumptions The remaining elements of this guidance cover recommended sources, assumptions, and inputs for use in conducting a lifecycle cost evaluation, as well as example calculations. Step 1: calculate Vehicle Capital Costs. Step 2: Calculate Vehicle Operating Costs. Step 3: calculate Environmental Impact. 1. Vehicle Capital Costs (Acquisition Costs, Infrastructure Costs, and Incentives) To calculate Vehicle Acquisition Costs: visit www.fueleconomy.gov Description Vehicle type Input Unit Source(s) and Notes Vehicle Acquisition Cost BEV (Look up for each vehicle type) $ Source: Look up MSRP range at www.fueleconomV.gov and use lower end of range. Departments are also encouraged to review prices through the state contract. PHEV $ HEV $ Conventional $ To calculate Vehicle Infrastructure Costs: utilize the following inputs: Description Vehicle type Input Unit Source(s) and Notes Fueling Infrastructure BEV $4178 $ Source: AFLEET, Argonne National Laboratory (Level 2 parking garage cost per charger). Assumes $8,356 cost per Level 2 charging plug, assumes one charging plug can be shared between 2 fleet vehicles. PHEV $0 $ HEV $0 $ Conventional $0 $ To calculate Vehicle Incentives: Incentives vary over time. They may be available from utilities, agencies, or other sources. Departments are encouraged to work with the Sustainability Coordinator, Purchasing Coordinator or Fleet Supervisor to pursue available incentives and factor those into any lifecycle cost analysis. 2. Vehicle Operating Costs (Maintenance Costs, Fuel/Energy Costs, Other Annual Costs) 0 To calculate Lifetime Maintenance Cost, use this equation: (maintenance cost per mile) * (miles driven per year) * (years of vehicle lifetime) Description Vehicle type Input Unit Source(s) and Notes Maintenance cost per mile BEV $0.05 $/mile Source: U.S. DOE -funded Atlas Public Policy Fleet Procurement Analysis Tool (https://atlaspoIicy.com/rand/fleetprocu rem ent-analysis-too l/) PHEV $0.08 $/mile HEV $0.09 $/mile Conventional $0.09 $/mile To calculate Lifetime Fuel Costs + Surcharges, use this equation: (miles driven per year) x (years of vehicle lifetime) - (fuel economy) x (fuel price) Description Vehicle type Input Unit Source(s) and Notes Fuel Economy BEV (Look up for relevant fuels) MPGe Source: Look up at www.fueleconomy.gov PHEV MPG PHEV MPG HEV MPG Conventional MPG Description Vehicle type Input Unit Source(s) and Notes Fuel Price Electricity (Look up for $/kWh Source: $/kWh Source: Look up EIA average relevantfuels) statewide retail electricity price for previous year for all sectors. Gasoline $/gallon Source: Look up EIA regional retail gasoline prices for previous year (Midwest (PADD 2)) To calculate Other Annual Costs, use this equation: (annual insurance cost + annual registration cost) * (years of vehicle lifetime) Description Vehicle type Input Unit Source(s) and Notes Insurance All $TBD $/year Source: City Purchasing Registration All Weight x .40% + $496/year Source: Estimated annual List Price x 1% + registration fee, Iowa Department Supplemental Fee of Revenue or Department of ($130) = cost Transportation 7 3. Lifetime Cost of Carbon Emissions factors and approaches are informed by the U.S. Community Protocol for Accounting and Reporting of Greenhouse Gas Emissions utilized by the City of Dubuque in their 2019 Greenhouse Gas Inventory Report. To calculate the Lifetime Cost of Carbon, use this equation: (miles driven per year) * (years of vehicle lifetime) - (fuel economy) * (emissions factor) * (scaling factor) * (social cost of carbon) To calculate social cost of carbon: utilize the following recommended inputs and sources: Description Input Year Unit Source(s) and Notes Social Cost of Carbon $30 2023 $ per metric ton of CO2 equivalent emitted Source: U.S. EPA. Uses 3% average discount rate values in 2007 dollars, adjusted to 2019 dollars using BLS CPI Inflation Calculator. $30 2024 $31 2025 $33 2026 $34 2027 $35 2028 $36 2029 TBD 2030 Description Fuel Input Unit Source(s) and Notes Scaling factors for full Gasoline 1.26 N/A Source: U.S. Community Protocol for Accounting fuel cycle emissions and Reporting of Greenhouse Gas Emissions, Electricity 1.10 N/A (converting direct Transportation and Other Mobile Emission GHG emissions to full Activities and Sources fuel cycle) (https://icleiusa.org/publications/uscommunity- rotocol ) Description Fuel Input Unit Source Emissions Gasoline 0.011063 Metric tons Source: U.S. Community Protocol for Accounting factors (full CO2e per and Reporting of Greenhouse Gas Emissions fuel cycle gallon (https://icleiusa.org/publications/uscommunity- ffotocol ) 0O2e) Electricity .0000837 Metric tons Source: U.S. EPA eGRID 2018 CO2e per (https://www.epa.gov/energy/emissionsgeneration- resource -integrated data base-egrid). Utilize most kWh recently available eGRID figure for SRMW region. General Inputs and Assumptions for Use in Equations Description Vehicle Input Unit Source(s) and Notes type Vehicle All 12 Years Source: City of Dubuque Fleet data - typical useful lifetime life. Some Dubuque fleet vehicles have a —6-year primary life in one use, and then can be transferred w to another use or kept in continued use until finishing usable life cycle. Miles All 10,500 Miles Source: City of Dubuque mileage data — average driven annual mileage for light duty vehicles. per year Departments are also encouraged to utilize the average annual mileage for the specific vehicle use they are replacing. Gallon BEV, PHEV 33.7 kWh/mi in Source: U.S. DOE AFDC gasoline to a gallon (https://afdc.energy.gov/fuels/properties) kWh gas conversion factor Pounds to All 2,204.6 Pounds per Source: U.S. Community Protocol for Accounting and metric tons metric ton Reporting of Greenhouse Gas Emissions conversion (https://icleiusa.org/publications/uscommunity- protocol ) factor Electricity BEV, PHEV 2.8% % Source: EIA Form 861 - 2018 estimate losses for Alliant/Interstate Power Co. (https://www.eia.gov/electricity/data/eia861/) Portion PHEV 55% % Source: U.S. DOE AFDC driven on (https://afdc.energy.gov/vehicles/electric emissions sources.html) electricity for PHEV Additional Tools The American Cities Climate Challenge has provided a basic spreadsheet template for departments to utilize in conducting lifecycle cost analyses, or recommends utilizing readily available fleet electrification analysis tools, such as Argonne Labs' Alternative Fuel Life -Cycle Environmental and Economic Transportation tool (AFLEET), U.S. DOE Alternative Fuel Data Center's Vehicle Cost Calculator or Atlas Public Policy's Fleet Procurement Analysis Tool 1I Example of How Cost of Carbon Factors in Vehicle Purchases The City of Dubuque currently has on order an AWD Ford Escape base model. The chart below shows a traditional internal combustion engine AWD Ford Escape, an AWD Ford Escape HEV (HEV is a traditional hybrid electric vehicle which runs a petrol engine which charges a battery which drives an electric drivetrain) and a FWD Ford Escape PHEV (A PHEV is a plug-in hybrid electric vehicle. It has petrol and an electric drivetrain, and its battery is higher capacity than HEV batteries.) Vehicle 2022 Ford Escape AWD Gasoline 2022 Ford Escape AWD HEV Hybrid 2022 Ford Escape FWD PHEV Plug-in Hybrid Annual Annual Annual Annual Annual Electricity FuellElec Operating Cost Per Emissions Fuel Use ra Use Qo Cost 0, Cost a Mile t)j fibs CO2) -u, 443 gal 0 kWh $1,197 $3,350 $0.34 10,640 235 gal 0 kWh $635 $2,788 $0.23 5,641 8 gal 2,040 kWh $384 $2,537 $025 2,053 Source: U.S. Department of Energy— Alternative Fuels Data Center The table below shows an example of how cost of carbon might factor into the purchase of vehicles at the city. There are many variables, and we can get exact data. However, this item is time sensitive, so we used a feasible example (based on current ordered vehicle and EV comparable) using industry -accepted assumptions and methodology from the US Department of Energy. Vehicle Annual Lifecycle Life cycle Costs Infrastructure Incentives/ TOTAL Emissions Cost of (Acquisition, Costs Rebates (lbs. Carbon Maintenance, (—$4178/unit) CO2) Fuel, etc.) 2022 Ford 10,640 $1,735 $50,493 N/A $0 $1735+$50,493= Escape AWD $52,228 Gasoline 2022 Ford 5,641 $918 $49,493 N/A $0 $918+$49493= Escape AWD $50,411 HEV Hybrid 2022 Ford 2,853 $465.84 $50,500 $4,178 TED (est. $465.84+$50,500+ Escape FWD —$7500for vehicle+$1000 $4178= PHEV Plug-in for charging $55,143 Hybrid infrastructure) (-$8500 federal incentives = $46,643.84) This puts the Plug in Hybrid Electric Vehicle option within a 10% total lifecycle cost of the traditional ICE vehicle (and with federal incentives, below the cost of the traditional vehicle) and the Hybrid Electric Vehicle as the most cost effective. If we based decision solely on purchase price the PHEV and the HEV would not meet the threshold.