Capital Metro's drive to electrify its entire fleet of buses is coming with some hard lessons about the high costs of early adoption.
The transit agency's battery-powered buses have been less reliable and harder to fix. Now, a company selling million-dollar electric vehicles to CapMetro has filed for Chapter 11 bankruptcy, throwing a new wrench into the gears.
Austin's transit agency has been a national leader in the switch to electric buses. The zero-emission vehicles are quieter. They don't blast diesel fumes in your face at the bus stop. The electric vehicles can provide a smoother ride than their diesel-powered cousins.
After the 2020 Project Connect election to expand public transit by raising city property taxes, Capital Metro's board of directors committed to buying almost 200 buses for more than a quarter billion dollars.
Proterra Inc. agreed to build 40 of those buses in a deal worth $46 million. CapMetro has already paid Proterra more than $17 million, but the California-based firm went belly up over the summer and is now chopping off pieces of the company and selling them to pay down debts.
Proterra's bus-building business was auctioned to Phoenix Motorcars, an Anaheim, California-based company with no experience building transit buses. Phoenix Motorcars has built smaller shuttle buses and school buses.
The sale still needs approval from a bankruptcy judge. Capital Metro has joined a long list of transit agencies, companies and even the U.S. Department of Justice in raising objections to the sale.
CapMetro has six of Proterra's 40-foot buses in service. Seventeen more have been built. But they're gathering dust at a factory in South Carolina because Proterra hasn't been able to deliver eight chargers to fuel them, a CapMetro filing said.
Austin's transit agency has been fining Proterra for each day the chargers are late. It's been more than 200 days. The fine is now over $500,000. Capital Metro says the sale to Phoenix Motorcars wouldn't include those fines, which continue to add up.
Capital Metro suggests in its filing that Proterra's sale of its transit business may be attempting to cut off potential warranty claims for buses, batteries, chargers and other items. Those warranties have been crucial for fixing the vehicles.
"The reliability of electric buses no matter the manufacturer is less than a diesel bus. I'm not going to tell you they operate as well as diesel bus," CapMetro chief operating officer Andrew Skabowski told KUT. "We're going to see some vehicles that are down a little bit longer than a diesel bus."
But other transit agencies single out Proterra's buses as being especially unreliable.
Attorneys representing Broward County, Florida say the first batch of Proterra's electric buses averaged 600 miles between failures. The second batch improved that average to 1,800 miles. But that was still far behind the county's aging fleet of diesel buses, which travel an average of 4,500 miles between failures.
Broward County bought 42 buses from Proterra for $54 million. Most were the 40-foot ZX5 buses, the same model CapMetro uses.
"On average, half of the first lot of Proterra buses and about one-third of the second lot are out of service at any given time," Broward County Attorney Andrew J. Meyers wrote in a filing.
Proterra did not respond to a request for comment.
Similar problems were reported by transit agencies in California and Canada.
Attorneys for the Santa Clara Valley Transportation Authority say the transit agency was forced to remove all 10 of its Proterra buses from service because they "continue to be plagued with problems." In one incident, a bus caught fire in a maintenance facility. Workers pushed the burning bus outside to prevent the building from catching fire. Some employees were treated for smoke inhalation.
The city of Edmonton, Canada said in a filing that at times more than half the buses are out of service for non-routine maintenance. The northern city claims it had to spend more than $1.3 million fixing the buses, including $206,000 for heated blankets to keep batteries warm so they maintain their range in the city's blistering cold winters.
"I think it's in the city's interest to divest these buses before they cause more trouble," Steve Bradshaw, president of the union representing Edmonton's bus drivers, told KUT. "Maybe they're going to sell them to Austin, I don't know."
Even if Capital Metro could get out of its contract to buy the 40 Proterra buses, it would still leave the transit agency in a difficult position, because of the parts, software and other support needed to keep the buses operating.
"They provide excellent service," Skabowski said of Proterra. But he said the problems with electric buses might force the agency to keep diesel vehicles around longer.
"It might affect our overall fleet size and the amount of vehicles that we might need to make sure that we can ensure the service," Skabowski said.
Proterra is one of two companies selling electric buses to Capital Metro. New Flyer — based in Winnipeg, Canada — has delivered seven of 52 buses. Delivery of the remaining buses is on schedule and expected in 2024, CapMetro said.
New Flyer has had problems, too, including many triggered by the same things that dragged down Proterra: the pandemic-related supply chain squeeze and rising inflation that hit hard after big contracts were signed.
Switching to electric buses will come with big challenges, but supporters say it's better than sticking with diesel vehicles, which pump tiny particles into the air that can go deep into the lungs and increase risk of asthma and cancer.
"Nobody promised that any change was going to be easy and without hiccups," said Dan Raudebaugh with the non-profit Center for Transportation and the Environment. "I do think the long-term repercussions of not doing it are far greater than the short-term issues we're having in the market today."
A bankruptcy judge in Delaware could rule as soon as this month on whether Phoenix Motorcars can buy Proterra's bus business. After any deal closes, Capital Metro would approach the buyer and make sure the terms of the deal were still favorable.
"Yeah, I mean we own 17 of the buses already," Skabowski said. "Even though we're actively engaged in the bankruptcy process, it's more of a watch and making sure our interests are covered."
