REPORT TO THE CITY COUNCIL
FROM: GREGORY A. BARFIELD, M.A., Director
Department of Transportation
BY: JOANA GARCIA, Management Analyst II
Department of Transportation
SUBJECT
Title
Award a two-year Revenue Service Contract, with options for three one-year extensions to STX Commodities at no cost to the City (Bid File 12502230)
Body
RECOMMENDATION
Staff recommends that Council award a two-year Revenue Service Contract with options for three one-year extensions to STX Commodities at no cost to the City (Bid File 12502230).
EXECUTIVE SUMMARY
The Department of Transportation / Fresno Area Express (FAX) owns, operates, and maintains a Compressed Natural Gas (CNG) fueling facility. Delivery of uncompressed natural gas is currently being provided on-demand through PG&E's service lines to FAX's CNG station. The CNG station fuels FAX’s bus fleet of over 138 buses, most of which are CNG-powered. It also provides CNG fuel to other City departments and external customers. On average, FAX’s CNG fueling station dispenses 3.5 million therms annually into motor vehicles, contributing to the City’s efforts in promoting sustainable transportation.
California’s transition towards lower-carbon transportation fuels and technologies has provided economic incentives through the generation and trading of Low Carbon Fuel Standard (LCFS) credits. This has created a need for specialized expertise to navigate the rapidly evolving greenhouse gas market. As a CNG supplier, FAX generates LCFS credits by maintaining a Carbon Intensity (CI) that is lower than the established annual benchmark of California’s LCFS program. These credits generated are then sold to entities that have a CI deficiency within the LCFS program. Additionally, FAX also earns and sells Renewable Identification Number (RIN) credits through the nationwide Renewable Fuel Standard (RFS) program.
The proposed Service Contract is for two years with options for three one-year extensions and includes two additive alternates for the electric vehicle chargers and a future hydrogen fueling facility. A Request for Proposals (RFP) was issued on April 16, 2025, via Bid File Number 12502230 and responses were due May 22, 2025. The City received six (6) proposals in response to the solicitation. After careful evaluation of the proposals, the selection committee recommends awarding the contract to STX Commodities. The proposer meets the specifications outlined in the solicitation and also presents the best potential return on revenue for the LCFS and RIN management services.
BACKGROUND
The Service Contract is for the management of LCFS and RIN credits, utilizing a book-and-claim accounting methodology. Under the LCFS requirements, volume of Renewable Natural Gas (RNG) injected into the pipeline must match an equivalent amount of fuel dispensed as transportation fuel.
In response to the City’s solicitation, six (6) proposals were submitted for consideration. After careful evaluation, the selection committee recommends awarding to STX Commodities. The proposer meets the specifications of the solicitation and offers the most favorable potential market return for the LCFS and RIN credits produced.
The proposed Service Contract is for two years, the options for three one-year extensions are at the same rate as the base two-year period. Additionally, this includes two additive alternates for the electric vehicle chargers and a future hydrogen fueling facility with no fees charged for managing these credits.
ENVIRONMENTAL FINDINGS
By the definition provided in the California Environmental Quality Act (CEQA) Guidelines Section 15378, the rejection of this proposal does not qualify as a “project”, as defined by CEQA
LOCAL PREFERENCE
The local preference was not implemented because this is a revenue generating agreement.
FISCAL IMPACT
There is no fiscal impact to the General Fund from this request.
Attachments:
Selection Committee Report
Master Dispensing Agreement