POST OFFICE CAN GO ELECTRIC – STUDY

U.S. Postal Service; Electrification of Delivery Vehicles
August 28, 2009 (U.S. Postal Service Office of the Inspector General)

"…With a large geographically dispersed vehicle fleet and short delivery routes, the Postal Service makes a particularly interesting national laboratory for testing technological advancements of electric vehicles (EVs) sought by the President through the Department of Energy (DOE). The Office of the Inspector General (OIG) [studied the feasibility of using EVs] in the Postal Service in response to a request from Congressman José E. Serrano, Chairman, Subcommittee on Financial Services and General Government, Committee on Appropriations…In summary, use of electric vehicles for Postal Service deliveries is operationally feasible and could provide a valuable opportunity for the nation to test EV technology. Due to the Postal Service’s current financial distress, government funds and vehicle to grid (V2G) revenue would likely be needed to make this transition economically feasible…

"…[The] broad use of EVs in the Postal Service delivery fleet would be operationally feasible. Current EV technology would work well with the average mail delivery driving distance of approximately 18 miles per day. Previous delivery operations tests…[showed] EV performance levels were adequate for mail delivery ranges of up to 40 miles a day and battery technology has advanced considerably since then…Only about 3 percent of the delivery fleet has driving distances that exceed that daily distance…[Because battery technology is still evolving]…we suggest the Postal Service phase in any electrification of its fleet…One area that should be further explored is how effectively EVs operate under adverse environmental conditions, such as very low winter temperatures…"

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"V2G technology establishes a system in which battery stored electricity or capacity can be sold to power wholesalers when electric vehicles are ― plugged-in or not in use for mail delivery. Alternatively, when vehicle batteries need to be fully charged, electricity from the power grid can charge the battery. Since most of the Postal Service’s 146,000 delivery vehicles are parked from approximately 5:00 p.m. to 8:00 a.m., the agency could use [plugged in] batteries as grid regulators…This would stabilize the electrical grid and, as a result, wholesalers who coordinate the movement of electricity would be willing to pay fees for regulation services…Currently, about 20 percent of the Postal Service delivery fleet is in an area which offers V2G…[I]n the next 2 to 5 years, there will be additional opportunities for V2G in other areas…as stimulus funding encourages… smart grid application…[T]he Postal Service should test and deploy EVs in geographical areas that offer V2G…"

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"The Postal Service’s difficult financial condition requires it to prioritize limited capital funds…[C]apital investments [must] generate a high return and have a short payback period – at least thirty percent and fewer than three years…We measured four economic scenarios for using electric vehicles in delivery operations. One of the four scenarios offers an opportunity to generate a high return in a short period. In this scenario, electrification of the Postal Service delivery vehicles can occur if the agency obtains significant federal government funds. The other scenarios become economically attractive if technology costs decline, additional funds are obtained, or the Postal Service’s financial situation improves.

"…[F]or purchasing 3,000 delivery vehicles...without assistance or V2G revenue the Postal Service would not realize its required rate of return. If, however, the upfront capital cost is overcome by participation in DOE-funded demonstration programs and V2G revenue is captured, the return increases to 63.2 percent with the agency breaking even within the first 2 years…Funding specifically targeting Postal Service mail delivery vehicles would likely be necessary to create an economic environment that provides incentives for the Postal Service to move into a leadership position with EV technology…"