Inspector General Gives Postal Electric Vehicles Stamp of Approval

By Bill Moore

Posted: 01 Sep 2009

"Our evaluation determined that broad use of EVs in the Postal Service delivery fleet would be operationally feasible."

So concludes the U. S. Postal Service Office of the Inspector General in an August 28, 2009 report. The trouble is, given the Service's current financial condition, it hasn't the resources to pursue the introduction of electric vehicles without federal funds, which is the point of the above chart taken from the report, and the less-than-two-year payback also hinges on the existence of Vehicle-to-Grid revenue generating opportunities, itself largely a theoretical construct at the moment.

It has long been argued that Post Office's 146,566 delivery vehicles -- those boxy, little white trucks seen in neighorhoods around the country -- are ideal candidates for conversion to electric drive. 82.9% of the fleet is driven less than 24 miles a day; and the fleetwide average is just 18 miles. The Inspector General report noted that only 4% of the fleet drove more than 40 miles a day. The report also noted concerns about cold winter operating conditions and the vehicle's ability to handle grades with a full payload. Tests in late 1990s indicated they could.

The Inspector General's office recommended that the service -- assuming funds can be found -- gradually phase in electric vehicles to replace the more than 6,800 conventional Grumman-built vehicles now reaching the end of their service life starting with an initial order of 3,000 electric models. The Service has gone so far as to receive price quotations from prospective vendors; and the average price being quoted is $40,000, of which the OIG estimates $15,500 could come from DOE grants. The net cost of the 3,000 electric postal vans is thus estimated to be $73.5 million. The report also takes into account an estimated 50% reduction in maintenance costs, some $19.1 million in battery replacement costs after 5 years, projected fuel savings of 28¢ a mile and $16 million in charging station installation costs.

Offsetting some of this could someday be revenues generated from providing V2G services, which for the 3,000 electric postal vans would be upwards of $76.1 million based on estimates provided by PJM Interconnection, the ISO that services the upper Mid-Atlantic and Midwest electric power grid. If all of the 30,060 postal vans in the PJM Interconnection pool were V2G-capable they would represent 451MWh of electric service regulation capacity, with each vehicle providing an estimated $2308 in annual revenue. However, the report also acknowledges that V2G implementation is at least two years away; leaving the report to recommend the service deploy any future EVs it may acquire in areas where V2G is in early deployment and to negotiate with system operators contacts accordingly.

As to funding the introduction/conversion to EVs, it notes that the DOE's Office of Electricity Delivery and Energy Reliability has issued competitive funding opportunities for smart grid demonstrations to the tune of $100 million and $50 million for utility load shifting, with 50% cost sharing. It also points out the possibility of funding at the state level from California, New York and others.

Short of finding a way to generate more revenue, reduce costs or receive a massive federal bailout like the banks and auto industry, the U.S. Postal Service isn't likely to begin the much-needed process of shifting to electric drive. Maybe it's time to consider offering the 21st century equivalent of World War Two war bonds to fund the program. In the end, the grid will benefit, the post office will benefit and America will be a bit less dependent on imported oil.

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