Stimulus Package Driving Hybrid Bus Orders

Talk about getting on board.

Transit systems across the country are using newly awarded stimulus funds to order hybrid buses.

Daimler Daimler Buses North America's Orion VII hybrid bus.

Those getting the biggest boost are smaller cities that couldn't previously afford to make the move to green.

In Lubbock, Texas, the transit authority ordered three new hybrids using $1.6 million from the American Recovery and Reinvestment Act.

Clermont County, Ohio will use part of its $1.4 million from the stimulus to buy four hybrids. And in Olympia, Wash., Intercity Transit ordered six hybrids, partly funded by the $2.3 million in stimulus funds it will be receiving.

“We would not be purchasing at this time if it wasn’t for the stimulus money,” says Meg Kester, the marketing and communications manager at Intercity Transit.

Kester says Intercity Transit had been planning to purchase hybrid buses for the past couple of years as a way to save money on fuel costs, but couldn't afford them.

A typical hybrid bus costs between $500,000-$600,000, about $200,000 more than a regular vehicle.

The stimulus is allowing smaller systems to catch up with larger cities like New York City, Chicago, Washington D.C. and San Francisco that have already been purchasing hybrids for the past couple of years.

“Even before the Obama stimulus there’s been a trend of transit systems purchasing the most fuel efficient technology, partly for saving fuel,” says Joel Makower, executive editor of GreenBiz.com, who adds the run up in gas costs last year prompted many unprepared transit systems to start seriously considering the alternatives.

Transit authorities say the hybrid buses cost less to operate because their dual electric and diesel engines use less fuel. Daimler Bus North America, which makes hybrids for New York City and San Francisco, says a hybrid bus can save 30,000 gallons of fuel compared to regular buses over a lifetime of use.

New York City already has 1,067 hybrid buses in its fleet. Another 850 that were ordered last year will hit the streets in 2010.

Washington D.C. has a contract to purchase 500 hybrid buses over five years. It already has 200 in its fleet already, and recently ordered 100 more.

San Francisco has 86 hybrids, while its entire fleet of 500 buses runs on biodiesel fuels.

Chicago recently announced it had signed a $49 million contract for 58 articulated hybrid buses, using some of the $241 million the CTA is scheduled to receive in stimulus funds.

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Several companies currently manufacture buses, but Daimler Buses North America and New Flyer are the largest producers. Daimler supplies buses for New York City and San Francisco among others, while New Flyer counts Washington D.C. and Chicago among its customers.

While green experts say it’s still to early call the stimulus package a boon to the hybrid bus industry, there are high hopes that the money will fuel the industry and create jobs.

In March, Vice President Joe Biden held a town hall forum at New Flyer’s St. Cloud, Minn. plant, highlighting its contribution to the green-jobs movement.

“In 2008, New Flyer hired more than 90 people at its St. Cloud plant and has operated around the clock to fulfill a two-year backlog of orders,” the VP noted.

But if you happen to live in one of the smaller cities ordering buses, don’t expect a hybrid to pick you up anytime soon; most hybrid bus orders made this year won’t hit the road until 2010 or 2011. Manufacturers say it can take a year to two years to build and deliver them.

© 2009 CNBC.com