New York school districts face a multi-billion dollar unfunded mandate to convert to electric school buses. While the transition will cost between $8 and $15 billion above the cost of buying traditional buses, less than $1 billion in state and federal aid is likely to be available to help schools cover the cost. School districts may have to cut educational and athletic programs to cover the cost.
Unfortunately, the “roadmap” released by the New York State Energy Research and Development Agency (NYSERDA) to help guide school districts navigate this financially challenging mandate only takes them to the starting point, and no farther.
State law requires beginning in 2027 all new school bus purchases must be of emissions-free vehicles, and by 2035 all school buses must be emissions-free. But the “roadmap” only looks toward 2027, the law’s starting date. As to the years when the law actually mandates school district action, NYSERDA expresses hope that sometime in the future the agency “will have substantially more information about costs, best practices, and vehicle availability” than it does now.
“Act now, plan later” is no way to manage public policy, but that‘s where we are now.
A close reading of the roadmap reveals how little real guidance it provides, and the extent to which NYSERDA has produced a document that provides more cheerleading for electric buses than actual guidance for school districts. Although the Empire Center addressed some of these problems last year, NYSERDA has found no answers.
The Rate of Transition
Whether the state can realistically buy enough emissions-free electric buses by 2035 remains an open question. It’s not even clear how many school buses operate in New York state. NYSERDA’s roadmap says 45,000, but the state Department of Motor Vehicles claims more than 50,000. Even if NYSERDA’s lower number is right, it’s a steep climb to reach the goal.
The roadmap claims New York currently has just 310 electric school buses but is optimistic that the state can get to 3,000 by 2027, when the mandate on purchases takes effect. That target will require districts to purchase around 675 electric buses per year each year for the next four years. That’s twice as many each year as have been purchased in total so far.
That number, as low as it seems, may pose challenges for the electric school bus industry, which is in its infancy. Data from the World Resources Institute suggests that as of December 2022, only 1,300 electric school buses had been delivered to school districts nationwide. New York’s demand each year for the next several years will apparently be almost half as much as total production to date. Certainly, school districts can place orders for these buses, but whether manufacturers can supply them in that time frame remains to be seen.
But 675 per year is just a trickle compared to the number of buses school district will have to purchase between 2027 and 2035 to electrify the state’s fleets. To then get to 45,000 or 50,000 electric buses in that eight-year span will require buying an average of 5,250 to 6,250 buses annually, an 800 to 900 percent increase in the annual purchase rate.
More realistically, the number purchased each year would have to increase at a growing rate year over year, as suggested in figure 1. While manufacturers are making plans to increase production, whether they can satisfy this high growth rate of demand—while also meeting growing demand from other states—is unknown, and NYSERDA fails to seriously address that problem. It is not unlikely that school districts will face multi-year delays in receiving ordered buses. The 2035 mandate, if met at all, may only be met only on paper, not on the road.
NYSERDA avoids addressing the total cost of this policy, although it attempts to persuade school districts it will be affordable.
The roadmap accurately notes that electric buses cost up to three times as much as diesel or propane buses. With diesel buses costing between $130,000 and $140,000, and electric buses going for $350,000 to $400,000, the price premium for an electric bus is between $210,000 and $270,000. In addition, each bus will need tens of thousands of dollars of electrical infrastructure. The Empire Center estimated infrastructure requirements of $10,000-$30,000 per bus. The roadmap notes potentially higher costs, reporting that a single Level 3 fast charger could cost up to $100,000. In addition, some districts will require distribution line upgrades because they are not located close to a large enough power distribution line.
The numbers above are from the roadmap, which may overestimate the price of fueled buses. Another source indicates that diesel and propane buses may cost under $100,000, which would make the premium for electric buses even greater.
Last year the Empire Center estimated the total cost of the transition—above the cost of simply buying modern clean diesel or propane buses—at between $8 and $15.25 billion. NYSERDA chose not to provide a total cost, but a back of the envelope calculation using their numbers puts their unstated calculation solidly within that range.
NYSERDA details the various sources of funding to help school districts purchase these buses, but they do not openly state what the Empire Center revealed in its report: the various sources of funding likely add up to less than $1 billion in aid to the state’s school districts, only 10 to 12 percent of the cost premium that school districts will have to pay.
The roadmap also makes a superficial stab at suggesting that the lower operating and maintenance (O&M) costs of electric school buses will make the total cost of ownership affordable for school districts, but the numbers just don’t work.
NYSERDA estimates O&M savings “at between $4,000 and $11,000 annually per bus.” But because the upfront cost premium is $210,000 to $270,000, it would take between 19 and 67 years to recover the higher price of an electric bus through its O&M savings. But the roadmap notes that school buses are replaced on average every 8.9 years. Even if we apply the longer Vermont target of replacing electric buses every 12 years, it’s obvious that school districts can never recoup the higher upfront cost through lower operating and maintenance costs.
NYSERDA also suggests that electric school buses are likely to come down in price. This remains unknown. While an increase in production could itself reduce the cost per vehicle, there are global concerns about the ability of the lithium mining industry to meet demand as sales of electric vehicles expands and the development of grid-scale battery storage increases. This could keep battery prices—the primary cause of electric buses’ higher cost—high for the foreseeable future.
Finally, the roadmap also claims in passing that electric school buses will have higher residual (resale) value at the end of their useful life than diesel buses. While this may be possible, the agency neither cites to a source to support the claim nor attempts to estimate how much that residual value would offset the higher total cost of ownership.
School Bus Range
A critical question for every school transportation provider is whether electric buses have the range needed in real-world conditions to meet school districts’ transportation needs. Transportation managers will find little guidance here that isn’t available through a brief web search.
The roadmap indicates that the median range of electric school buses today is 120–135 miles, while bus manufacturer Thomas claims their “industry leading” technology has a range of 138 miles. NYSERDA claims that most current school bus routes are short enough to be effectively electrified, but admits that districts with longer routes, hillier terrain, and colder weather “present challenges.”
In addition to terrain and weather, there are several other factors that affect range. One obvious factor is load. A less obvious factor is that best-practice for charging/discharging the batteries of electric vehicles is to not charge above 90 percent or discharge below 10 percent. Finally, the roadmap notes that bus manufacturer Thomas expects batteries to degrade to 80 percent of capacity within eight years, further limiting range.
So the range estimates school districts really need is not the tested range of a brand new school bus, but the range of a fully loaded eight-year-old bus on hilly terrain in cold weather that can use only 62 percent of its original battery capacity (beginning the day with a 90 percent charge on a battery that’s degraded to 80 percent capacity and leaving at least a 10 percent charge when returned to the bus barn).
School districts and other transportation providers will not find that critical information in this roadmap. NYSERDA could provide a real service to transportation providers if it worked with bus manufacturers to determine this real-world expected range.
If the reality for some school districts is that they have to run shorter routes to accommodate electric buses, they will not only have to buy additional buses, but also hire additional drivers. This would impose further costs on school districts, and many are already struggling with a shortage of drivers.
But in addition to the task of transporting children to and from school on a daily basis, buses are also used for other educational and athletic activities. NYSERDA makes no attempt to consider the possible negative effect of short-range high-charging time buses on these other valuable activities.
The report optimistically hopes that continued improvements in batteries over the next decade and a half will make electric buses suitable for all school districts. This indicates the risk of setting an artificial mandate before knowing if the technology is available. It would be wiser to let the technology prove itself and allow each school district to determine if or when it has become suitable and cost-effective for it.
Electric Buses as Grid Batteries
The roadmap also suggests that electric buses can offset their higher costs by functioning as batteries, using bidirectional charging and getting paid to deliver power to the grid during high demand times. However, it fails to provide any analysis of the practicality of the idea.
The likelihood that school districts can benefit from this during the school year appears small, because buses will generally be charging or operating during the high electricity demand times when discharge to the grid would be most valuable.
At night, not only is the buses’ potential contribution to the grid least needed, but that is when they will normally be charging (drawing electricity from the grid rather than feeding back into it).
As electricity demand increases during the morning, buses will be moving off chargers and using their accumulated charge to transport children to school. During midday, they will mostly be idle, but will either be conserving their remaining charge for the afternoon routes or even recharging so they can complete those routes, so they will be unable to contribute to the grid then.
And during late afternoon and early evening, during the daily peak electricity demand where their contribution would be most beneficial, they will either be off their chargers taking children home or will have been put back on the chargers for their overnight charging, and will likely have too little remaining charge to provide a significant contribution to the grid.
This leaves primarily the summer months and holidays as times buses might function as grid-based batteries. But while this is no doubt theoretically possible, it would also dramatically increase the number of charge/discharge cycles, degrading batteries far more quickly than using them solely for transportation would. The degradation to 80 percent that Thomas specifies as occurring by year eight could occur more quickly, and as the bus nears the end of its useful life it could be substantially further degraded, potentially to the extent it would have to be retired early.
Excessive battery degradation would also reduce the residual value of the bus, another point not noted in the NYSERDA report.
Rather than merely point to this theoretical potential, NYSERDA owes school districts a serious economic analysis of the net value of using electric buses as batteries, counting not only potential revenues from delivering electricity to the grid but also the cost of faster degradation that reduces a bus’s useful lifetime and residual value.
NYSERDA has missed an important opportunity to provide a thorough analysis of the challenges the state’s school districts face in transitioning to electric buses, particularly upstate school districts. Their “roadmap” provides more cheerleading than it does guidance, and what guidance is provided only looks to 2027, when the policy first takes effect, with a blank map for 2027-2035.
There are multiple specific issues NYSERDA—the state’s energy research agency—needs to study in-depth, from the real logistical challenge of purchasing enough electric school buses to meet the state’s 2035 deadline, to a hard-nosed look at the net costs to school districts, and the range of aging electric buses in real-world conditions. Absent answers to these questions, their “road map” is in reality only a tourist brochure.