Pensacola Mayor Ashton Hayward announced today that Energy Services of Pensacola (ESP), the City-owned natural gas utility, would partner with the Emerald Coast Utilities Authority (ECUA) to transition City and ECUA vehicle fleets to natural gas-powered vehicles (NGVs).

The agreement provides for the construction of up to three compressed natural gas (CNG) fueling stations throughout the greater Pensacola area. Initially, the stations will be used to fuel ECUA and City of Pensacola vehicles, but ESP will market the fueling stations to private fleets that may be considering converting to NGVs.

“I’ve committed to finding new non-tax revenue sources for the City,” said Mayor Hayward. “Conversion to NGVs means lower fuel and maintenance costs for ECUA and City vehicles, and these fueling stations represent a new potential revenue stream for ESP. With this agreement, we’ll begin building the infrastructure of fueling stations that we can expand to other fleets and eventually, perhaps even residential vehicles.”

Natural gas-powered vehicles have a substantially lower fuel cost than vehicles using gasoline or diesel fuel. The national average for a gallon of diesel fuel is $3.84, while the average price for a diesel gallon equivalent of CNG is only $2.20. Additionally, CNG prices have remained stable over the past several years as gasoline and diesel prices have risen.

Mayor Hayward also pointed out the environmental benefits of using natural gas-powered vehicles. "Moving as many as 275 ECUA trucks from diesel to natural gas over the next ten years – plus all the NGVs the City will be converting – is going to make a huge impact on the overall air quality for the entire region," said Hayward, noting that he enjoys driving the natural gas-powered Honda Civic that the City of Pensacola has purchased.

ECUA plans to convert 10-15 vehicles in the first year of the agreement, with additional vehicles converted over the next eight years as part of normal vehicle replacement schedules. The move is expected to save ECUA in excess of $250,000 per year in maintenance costs alone, and over $1 million in annual fuel costs.

The first station will be constructed at ECUA’s facility at 3050 Godwin Lane, near Pine Forest Road. Locations for subsequent stations have not been finalized. Under the terms of the agreement, ECUA will pay ESP a monthly transportation charge as well as an indexed price per diesel gallon equivalent of CNG fuel used by ECUA vehicles.

Mayor Hayward has submitted the proposed agreement to the Pensacola City Council for approval. At its meeting Thursday night, the Council is scheduled to consider both the agreement with ECUA and a design-build contract with Zeit Energy of Dallas.