New Jersey environmentalists are urging state authorities to move faster to replace existing diesel buses with electric ones, as the state’s mass transportation agency, NJ Transit, embarks on a pilot program that will be its first electric bus initiative.

The state would reap extensive health benefits and remove “significant environmental and public health costs” by accelerating the switch of its 2,183 diesel buses to electric, according to a report released last week by New Jersey Policy Perspective, a nonprofit think tank.

“Electrifying public buses also provides a reliable and cost-effective option to maintain and expand the state’s transit system through advances in electric bus technology and rapid declines in battery costs,” the report says.

The assessment follows a report last month co-produced by Environment New Jersey, an environmental advocacy group, that urged governments across the U.S. to immediately phase out diesel school buses. Although it would come with a hefty upfront price tag, transitioning school fleets to electric buses would save schools money over the lifetime of the bus, according to the report, which was produced with NJPIRG, a public interest advocacy group.

The report said that although the $312,000 price of a new electric bus is close to three times as much as a new diesel bus, the lower fuel and maintenance costs for an electric vehicle would mean that the district would save between $80,000 and $130,000 over the 16-year life of each school bus.

The two reports come as NJ Transit lays the ground work for a pilot program in Camden to assess the benefits and challenges of electric buses used in a public service setting. The agency is looking to buy eight battery-powered buses with $8 million awarded by Gov. Phil Murphy from the state’s Volkswagen settlement. In September, NJ Transit awarded a $3.235 million contract for a renovation of Camden’s Newton Avenue Bus Garage that will include EV charging stations and other associated infrastructure modifications. The target for completion is this summer.

In response to the report, NJ Transit says it has placed a priority on investing in environmentally friendly technology. The agency says its five-year capital plan “is geared towards getting to the 2032 goal of 100% of new bus purchases being zero-emission vehicles.” Included in the plan is $300 million for electric buses, spokesman Jim Smith said.

Yet environmentalists question whether the agency is moving fast enough.

“The pilot is a good place to start,” said Doug O’Malley, state director of Environment New Jersey. “But we need continual investment in electric buses by NJ Transit.”

One way to fund the purchase of electric buses and infrastructure would be for utilities to help finance the upfront costs of bus purchases and charging infrastructure installation, with the expenditures repaid through the purchaser’s utility bill, the organization’s report suggests.

O’Malley added that the New Jersey Board of Public Utilities is expected this year to offer a proposal on how best to stimulate the creation of heavy-duty charging stations, which can be used by buses.

The New Jersey Policy Perspective report is skeptical that NJ Transit is on track to meet its 2032 goal. It says that the agency’s capital plan, released in June 2020, contained a timeline that is “misaligned” with the goals set out by the New Jersey legislature. The plan wouldn’t enable NJ Transit to exclusively buy electric buses until 2040, the report says.

In addition, while NJ Transit estimates that the transition to a fully electric fleet will cost $5.7 billion, the report says there is “no clear funding source” in the agency’s capital budget to pay for that change.

That figure is high because the upfront costs are high, according to the report. It puts the cost of replacing the current diesel fleet at $1.96 billion, in large part because the price tag for a 40-foot electric bus with 450 kWh batteries is  $749,000, well above the $553,000 for a similarly sized diesel bus.

However, the cost of electric buses is falling, and the cost of batteries for the buses is dropping by about 5 to 10% per year, the report says. NJ Transit could save $81,500 per bus per year by using electric buses because of the removal of mechanical service, oil and filter changes needed on internal combustion engines, as well as fewer tire and brake pad replacements.