SBaaS Model Brings Electric School Buses To More Districts

We write a lot about electric school buses, and why not? What parents want their children riding back and forth to school in a vehicle that spews copious amounts of carbon dioxide, nitrogen oxides, and fine particulate matter in its wake? FPMs has been shown to affect cognitive function in young people. Why would we send them to school to get smarter in transportation devices that make them dumber?

Today there are a half million school buses in America, and the vast majority of them are powered by diesel engines. Only 0.2% are currently electric, according to Canary Media. One of the big roadblocks to getting more electric school buses on the road is the high cost of purchasing them. At present, they can be two to three times as expensive as a conventional diesel school bus.

Overall, an electric bus may be less expensive to own over its useful life, thanks to the lower cost of fuel and maintenance, but school districts still have to pay the purchase cost up front. Then there are additional expenses associated with installing charging equipment and training service personnel in the techniques required to keep the electric buses on the road.

Highland Electric Fleets of Beverley, Massachusetts, and Thomas Built Buses of High Point, North Carolina, think they have the answer. They have signed a memorandum of understanding that will make electric school buses available on a subscription basis. Call it SBaaS — School Bus as a Service. The subscription fee covers the cost of the buses and the charging infrastructure needed to keep them operating. It also includes managing charging, providing fleet and driver training resources, and maintenance services to keep the buses up and running.

“School districts taking a long-term approach to electrifying their fleets can now do so today, affordably. This relationship allows school districts and fleet operators to go electric at the same cost as a diesel bus,” says Highland CEO  Duncan McIntyre. “Together with Thomas Built Buses, we have already fulfilled the nation’s largest school bus order. That experience and the quality of their all-electric Jouley school bus makes them a perfect partner to support customers’ long-term success and build cleaner communities.” The two companies will provide 326 electric school buses to Montgomery County, Maryland over the next several years — the largest order in the history of the United States.

“We are in the business of helping communities that want to complete a full fleet electrification effort,” McIntyre says.  ​“They don’t have to commit to that upfront — but there’s usually an interest in going beyond a few vehicles pilot.”

According to Canary Media, other companies are also pulling together private sector financing to tackle this public sector market. Nuvve has formed a joint venture with school bus manufacturer Blue Bird to offer similar electric bus leasing and infrastructure arrangements with school districts in California, Colorado, Illinois and other states.

Canada’s Lion Electric has teamed up with Zūm, a San Francisco-based startup offering transportation-as-a-service for a number of school districts, including a project aiming at replacing half of Oakland, California’s school buses with electric models in the coming year.

Driving Down Costs

Highland needs to manage a large number of cost and revenue opportunities to beat the price of diesel buses and still make money for themselves. Part of that is phasing the purchase and deployment of electric school buses to take advantage of expected declines in costs over the coming years. McIntyre says partnering with a major manufacturer like Thomas Built is a big part of that. ​​“We’re able to make much larger commitments, which offers [Thomas Built] more certainty to their order book,” while ​“passing on to us at least some of the benefit of EV buses getting cheaper.”

Then there are the operational savings to manage, he says. Buses with electric drivetrains and batteries should cost less to fuel and maintain than diesel buses with internal combustion engines. “We’re essentially betting on what those cash profiles look like over the life of an electric bus.”

Districts also need to work with their local utilities to ensure that their bus depots have enough grid capacity to handle the megawatt-scale charging needs of electric fleets, or phase the growth in charging needs to match utilities’ grid upgrade schedules. Once bus fleets are plugged in, their charging schedules need to be carefully managed to avoid overstressing the utility grid or racking up large electricity bills.

“Infrastructure, and the phasing of infrastructure, is really critical,” says Michelle Levinson, manager of eMobility Financial Solutions with the World Resources Institute. “It’s not a big deal when you’re talking about one or four buses,” but ​“it becomes a much more salient question when you’re talking about transitioning a fleet.”

Vehicle-To-Grid Opportunities

Image courtesy of Nuvve Corporation.

Nuvve CEO Gregory Poliasne cited V2G revenue as a major opportunity to drive down electrification costs for school districts. Since school buses are often parked in the late afternoon and early evening when utility grids must deal with the highest demand for electricity of the day, they are a prime target for V2G strategies. In Highland’s first project with the city of Beverly, Massachusetts, it is now earning roughly one-third of its revenue from V2G income. That, in turn, reduces costs and helps Highland be profitable while reducing the city’s school transportation expense.

Highland and other SBaaS companies are also able to leverage the plethora of federal and state incentives for electric school buses. Many states have launched electric school bus pilots through their share of funds from the Volkswagen Dieselgate settlement, which directed $3 billion to state agencies to spend on projects that reduce air pollution.

California leads the nation with more than $116 million in incentives awarded to date and $122 million set aside for 2022. Governor Gavin Newsom’s budget request calls for $1.5 billion in electric school bus funding over the next three years.

New York has pledged to convert its statewide school bus fleet to all-electric by 2035. Massachusetts has awarded grants to school districts to test electric school buses as grid assets and Colorado governor Jared Polis has proposed spending $150 million over six years on electrifying school bus fleets.

The federal infrastructure law passed last year includes $2.5 billion in grants for electric school buses and another $2.5 billion for ​“clean” school buses, which include electric and alternative fuel vehicles. The grants cover 100 percent of the upfront costs of buses and equipment.

Is all this money for electric school buses worth it? Only if we want our children to live long, healthy lives with all their mental faculties. Joe Manchin won’t approve but most parents will.