Tops Markets will replace its entire 55-truck delivery fleet with more efficient vehicles powered by compressed natural gas. The move is expected to reduce Tops’ fuel costs by more than 50 percent and conserve more than 1.2 million gallons of diesel fuel per year.
Tops also plans to build a $2 million on-site compressed natural gas fueling station at its Lancaster distribution center. The three-pump facility, which has yet to be approved by the town, would be built by Saratoga Springs-based company American Natural Gas.
At first, Tops planned to experiment by swapping out just a couple of trucks but quickly decided to convert entirely to compressed natural gas.
“As we got into the economics of it, we said if we’re going to do this, let’s convert the entire fleet because that’s where you’re able to leverage the scale of the project,” said Ronald J. Ferri, Tops’ senior vice president of distribution and logistics.
That way, Tops is able to get volume discounts on the new trucks as well as the fuel it buys.
Each truck will be able to travel 500 miles per tank of gas, allowing Tops trucks to fill up at the Lancaster facility and travel round-trip without refueling. In cases of heavy traffic or bad weather, when trucks might be stuck on the road longer than anticipated, trucks can stop and refuel at any of American Natural Gas’ other public and private fueling stations throughout New York State.
Several other companies use compressed natural gas to fuel their fleets of trucks, including beverage distributor Try-It and garbage-collection company Waste Management. National Fuel has seen a 600 percent increase in compressed natural gas usage since 2012.
Tops is seeking sales tax abatements and an extension of its payment-in-lieu-of-taxes agreement from the Lancaster Industrial Development Agency. National Fuel lent Tops $375,000 to buy down upfront costs. The trucks, leased through Ryder, will cost $14 million. The new fleet and fueling station are expected to be operational by May.
Though the trucks are pricier than traditional diesel trucks, compressed natural gas costs roughly half as much as diesel fuel. Tops will be able to secure fuel at a rate from $1.60 to $2 per gallon equivalent, which includes a federal tax of 18.3 cents per gallon and fees paid to American Natural Gas. Diesel fuel is currently priced at around $3.70 and has fallen over the last several months. Tops’ trucks, which get fuel mileage of about 6 miles per gallon, travel a total of 6.6 million miles per year.
By converting its fleet, Tops will cut its greenhouse gas emissions by 6.2 million pounds of carbon dioxide per year. Compressed natural gas reduces carbon monoxide by 75 percent, nitrogen oxides by 50 percent, and carbon dioxide by 25 percent. Natural gas engines are also about half as loud as diesel engines.
“What we’re seeing with some of our fleet users is they’re actually seeing some pressure from their customers to demonstrate sustainable practices,” said Clifford J. Mason, a senior manager of energy services at National Fuel. “This is one of the ways they can accomplish that and promote that they’re using a green fuel, and, at the same time, it’s economically viable.”
Natural gas, which is a vapor, has to be compressed to about 4,000 pounds per square inch in order to load enough fuel into a gas tank to make a natural gas vehicle practical. Once compressed, the gas is stored in horizontal steel tubes and dispensed from pumps that looks much like a traditional gasoline pumps.
Compressed natural gas vehicles have a heavier-duty cylinder than a diesel engine so it can handle the higher pressure. Aside from modifications to the fuel intake system and fuel tank, the rest of the vehicle works the same as a diesel-fueled vehicle.
Consumer vehicles that use compressed natural gas are coming to market more slowly than large fleet vehicles. A Honda Civic model has been released, while a Chevrolet Impala and Chevrolet Silverado pickup truck are scheduled to roll out next year.