CO budget committee considers ban on new CNG vehicles after Watchdog.org story

By Arthur Kane | Watchdog.org

The Colorado Legislature’s powerful Joint Budget Committee questioned whether state purchases of compressed natural gas vehicles violate state law after a series of Watchdog.org stories exposed problems with the program.

“It is unclear that state agency actual usage of CNG fuel in CNG vehicles justifies the additional cost and meets the statutory requirements for the purchase of alternative fuel vehicles that life-cycle cost equal no more than base vehicle life-cycle costs plus 10 percent,” the JBC staff analysis said.

Staff recommended Wednesday the Legislature not appropriate additional money for CNG purchases for the governor’s office, Department of Transportation or Department of Natural Resources. Staff also recommended a policy that new purchases be made only for state agencies that use at least 50 percent of CNG in vehicles and the Department of Personnel & Administration submit life-cycle cost projections comparisons.

DPA was requesting the purchase of 301 CNG vehicles, which can also use gasoline, in the 2015-16 fiscal year, the JBC report said.

JBC chairman Sen. Kent Lambert, a Colorado Springs Republican, asked staff to do the analysis after learning about the issues from Watchdog.org. He said it probably doesn’t make sense to buy additional vehicles until the infrastructure is there to fuel them, and CNG only makes sense if petroleum prices increase enough that they’re not close to CNG fuel costs.

“There is a material violation of statute and (the program) is not making statutory criteria in the next five years,” he said after the hearing.

The administration “might be fudging (their estimates) a bit,” he added.

In September, Watchdog.org produced a series of stories showing state CNG vehicles used petroleum much more often than CNG, far-flung departments like DNR couldn’t find filling stations nearby, the vehicles didn’t fit the needs of some employees and the state was spending millions to fund new CNG pumps when a previous taxpayer-funded facility closed.

The stories also showed that Gov. John Hickenlooper, who has been criticized for close ties to the natural gas development industry, and his staff are directly pushing the purchase of the vehicles despite complaints from DNR fleet managers.

Administration officials maintain the cheaper CNG fuel would save taxpayers money and help create a market for the cleaner and locally produced fuel. DPA officials provided their analysis they say shows the vehicles — which the administration determined will have a higher resale value — can use as little as 15 percent CNG to stay within the state law that requires alternative-fuel vehicle purchases if they cost no more than 10 percent more than regular gas vehicles over the lifetime of the car or truck.

DPA spokeswoman Sabrina D’Agosta said DPA’s estimates were based on their best data at the time and staff continues to update their projections.

“We do not believe there was any determination that we did not meet statutory requirements,” she said in an email exchange. “In fact, there is no guidance on how much we can spend on a CNG vehicle. Statute simply requires us to purchase them if they are within 10% of the cost of a petroleum gas vehicle.”

Lambert said the JBC will question the DPA director, whose department oversees the state fleet, next week before making a final recommendation whether to ban future purchases.

“The market is not there, and there are a lot of assumptions in this thing,” he said.

Staff analysis shows “they’re not cost effective right now.”