Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=206579
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exhaust

Rafael Bernal/Medill

Only a modest plume rises from a CTA bus exhaust pipe. Newer, cleaner buses have saved the CTA millions in fuel costs.


CTA financial statements reflect positive steps in efficiency and emissions

by Rafael Bernal
June 06, 2012


Hybrid

Rafael Bernal/Medill

Hybrid buses, part of a green initiative, have reduced fuel costs for the CTA.

The Chicago Transit Authority has benefitted both financially and environmentally from the Chicago Climate Action Plan.

 

CTA financial statements reflect that the initiative pressured the agency to modernize its fleet and apply public policy in a context of energy efficiency that, in the span of three years, resulted in more people being moved with less money and fewer emissions.

The Chicago Climate Action Plan was published by the City of Chicago in 2008. Its purpose was to provide a road map to decreasing the city’s role in global climate change. While some of the loftier, long-term goals have yet to be met, or even seriously engaged, the city has returned many positive, tangible results.

The increased focus on energy efficiency allowed city officials to concentrate on savings, which created a virtuous cycle whereby budgetary and green public policies influenced each other. As a result, it’s difficult to separate, in some cases, positive moves motivated by reduction of carbon emissions and those motivated by financial considerations.

One such case is the Chicago Transit Authority’s fuel expenditure savings in 2010, the latest figures available, compared with 2009. According to the CTA’s 2009 and 2010 financial statements, fuel expenditures fell by a whopping $48 million that year due mainly to favorable results from the city’s fuel hedging program, the tactic to protect against a rise in fuel prices. 

While this program is separate from CCAP, and entirely financial in nature, it responds to the same public policy structure engrained in the environmental program. According to Samantha Superstine, a local public policy expert affiliated with the University of Chicago, CCAP’s is “not only looking at emissions, but also energy efficiency.”

Superstine says CCAP is the first comprehensive plan to reduce emissions by a large city in America. Many of its provisions have already proven successful, including fleet efficiency, energy efficiency, the green taxi program, the bicycle trail program, the bicycle sharing program and the hybrid bus program.

 

A short-term goal that has not proven as successful is the city’s taxi driver ecodriving training program. It was intended to teach cab drivers to maximize fuel efficiency in their cars, whether gas powered or hybrid. It’s unclear whether the initiative has been successful because it hasn’t received much follow- through.

While it is difficult to gauge fleet efficiency in budgetary terms because of the hedging program and commodity price fluctuations-–although secondary to fuel, electric power is also a major budgetary consideration for the CTA--the bottom line reveals a positive trend. The CTA claims that emissions dropped 30 percent between 2007 and 2010, while ridership increased from 467.1 million to 512.2 million. In that time, fuel costs dropped from $71 million to $52 million, but not before spiking to $100 million in 2009.

Although fuel and electricity have a major impact on the CTA’s expenditures, they are not the largest segments. Materials and supplies historically have been roughly equivalent to fuel costs and have dropped over the years thanks to the acquisition of more hybrid buses--a direct benefit of CCAP. In 2007, the CTA spent $84 million on supplies compared with $80 million in 2010. These costs peaked in 2008, reaching $100 million.  

However, labor costs are by far the CTA’s largest expenditure. In 2010, the CTA spent $864 million on labor and fringe benefits, substantially less than the $1.1 billion it spent in 2007. Labor costs fluctuated over that three-year period, with higher wages more than offset by workforce reductions.

Although the CTA has not yet published its Final Financial Analysis for 2011, its proposed operating budget for that period estimated fuel expenditures of $54 million, 14.7 percent less than the 2010 budget. To meet these goals, the CTA plans to continue to rely upon its aggressive fuel hedging program.

Electricity costs were also expected to descend in 2011, by $8.1 million to $30.1 million, benefitting from a contract negotiated with utilities in 2010. The contract hedges power costs through a complex purchasing strategy that allows the CTA to buy electricity before it is used.  Before 2011 began, the CTA had already purchased 55 percent of the power it expected to use during the year.