Electric Shuttle Buses Come to Chicago

Fall 2017 Issue
By: Amanda Tran, a freelance real estate writer and researcher
JLL leases 10 electric buses like this one from Proterra to provide shuttle bus service for tenants of Aon Center and Prudential Plaza in Chicago’s East Loop. Tenants pay $2 for a ride to or from one of three local commuter rail stations. The buses are much less expensive to operate and maintain than diesel vehicles, and emit no carbon dioxide or greenhouse gases.

JLL and Proterra provide the nation’s first all-battery-powered commercial electric bus fleet.

IN DECEMBER 2016, the first privately operated zero-emission battery-electric commercial bus fleet began serving the tenants of Aon Center and the dual-tower Prudential Plaza, two of Chicago’s largest office properties. Located in the East Loop submarket, the three buildings total approximately 6 million square feet and accommodate 20,000 workers. JLL, the management company for both properties, is leasing 10 battery-powered electric Catalyst buses from Proterra, America’s leading manufacturer of battery-electric buses, replacing eight diesel buses it had been leasing.

The new buses cost tenants $2 a ride and make 82 trips each day between the properties and the Ogilvie, Union and LaSalle Street commuter rail stations, which serve 35,000 passengers every month. Proterra estimates that replacing the diesel buses with zero-emission vehicles will prevent the release of 9.8 million pounds of carbon dioxide and 120 million pounds of greenhouse gases over the next five years. They also provide riders with a more upscale experience as they offer leather-wrapped seats, Wi-Fi, USB ports and a mobile app that tracks wait times.

Why Electric?

The owner of Prudential Plaza and Aon Center, The 601W Companies, a private New York-based real estate investor, recently completed an $80 million renovation of Prudential Plaza and is currently renovating Aon Center. Bryan Oyster, senior vice president at JLL and general manager of the buildings, says “the old diesel buses that kind of clunked along no longer fit the image of the buildings.” He notes that the properties’ tenant base has evolved from one that attracted primarily traditional tenants such as law firms and a public utility to one that attracts more modern tenants such as financial, real estate, software and consulting firms. These new tenants and their millennial employees also prioritize sustainability.

Matt Horton, chief commercial officer at Proterra, hears the same story from other private property owners. “Beyond the LEED certification, there is a broad recognition that this [battery-electric transit] is a really important way to meet the sustainability objectives of property owners and corporate customers,” Horton says. “It is something that their riders or employees are absolutely looking for and expect. And, I think there is growing recognition that an office building’s environmental footprint goes far beyond its four walls.”

The five-year lease between JLL and Proterra is the first commercial agreement for an all battery-electric commuter bus fleet in the U.S. Incentives from Drive Clean Chicago, a federally funded incentive program aiming to grow the alternative fuel transportation network in the city, played a large role in the deal. Proterra, as owner of the vehicles, will receive incentives worth $1.5 million ($150,000 per bus) from Drive Clean Chicago and will pass those savings on to JLL in the form of lower lease payments for the buses. Horton asserts that the “partnership really made it possible for JLL to go all in on electric and not just electrify part of the fleet [serving these buildings], but to do the whole thing.”

Lower Costs

By mitigating the upfront costs of switching to battery-electric buses, JLL has found that the cost of fueling and maintaining the Catalyst buses is lower than that for diesel buses. Oyster says, “We’ve found that the maintenance is really nothing. We also don’t pay any fuel costs, and with the fuel costs eliminated, we’re actually saving money. The electric usage is so inexpensive compared to fuel.” For total cost of ownership, Proterra estimates replacing a diesel bus with its all-electric model will yield savings of approximately $450,000 ($300,000 in energy and $150,000 in maintenance costs) during the vehicle’s lifetime of up to 18 years.

Horton explains how Proterra reduces those costs for its customers. “An electric bus has almost no consumables,” he says. “You don’t have oil filters and oil changes and all the hydraulic fluids that you would have with a conventional bus. There are about 30 percent fewer moving parts on a battery-electric bus. We replace an incredibly complicated, very finicky diesel engine with a very simple electric drive train that basically only has two moving parts to it.”

Although Proterra’s primary focus is on the public sector, the company is seeing increased interest from the private sector, particularly office building owners. Horton advises potential commercial clients to fully understand how and where they plan to operate the buses. He explains that Proterra has “a very sophisticated simulation tool that allows us, based on their route profiles, to tell them exactly how the vehicles will perform. We would suggest the customer buy only as much energy storage as they need, so they’re not paying for batteries they never use.” Between the growing price competitiveness of battery-electric buses and consumer demand for greener transportation, Proterra expects the majority of U.S. bus sales to be electric by 2025.