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Roam part of Proterra bankruptcy proceedings, supply chain issues remain

“From what we have been told so far, the purchase included all warranties for outstanding vehicles. … We’re watching for the closing of the sale and then we’ll get more firm timelines.”
Roam transit operations and training centre
Roam transit's operations and training centre in the Town of Banff. GREG COLGAN RMO PHOTO

BOW VALLEY – An ongoing bankruptcy proceeding with an American-based company for electric buses has Roam’s transit commission one of 30 transit agencies making an unsecured claim.

The Bow Valley Regional Transit Services Commission (BVRTSC) is one of 30 transit agencies and companies making an unsecured claim to the tune of just over $1 million for Proterra Inc.’s Chapter 11 bankruptcy procedures.

Martin Bean, Roam’s CEO, said the claim is for the battery warranty as part of the 10 Proterra buses in service for the transit service, adding the warranty covers a battery replacement once during the life of a bus, but is not expected to be needed in the immediate future.

“It’s not for anything currently due for payment, but somewhere five or six years out from now,” he said, noting the BVRTSC's electric buses have come into service in the last two-and-a-half years.

“From what we have been told so far, the purchase included all warranties for outstanding vehicles. … We’re watching for the closing of the sale and then we’ll get more firm timelines.”

In addition to BVRTSC, the City of Edmonton has an unsecured claim of $8 million as the only other Canadian transit agency or company to do so. There are also 645 shareholders listed in the proceedings. The largest unsecured claim is from the Republic of Korea for $27.5 million.

Roam first bought three Proterra buses in 2021 and has added more in both 2022 and 2023. Bean said the commission purchased the Proterra buses through an onboarding clause in the City of Edmonton’s contract, which ended prior to the bankruptcy proceedings beginning.

Roam has one final bus on order with Proterra, which is meant to run as part of the new regional transit route that would serve Grassi Lakes day use area, Canmore Nordic Centre and Quarry Lake as well as connecting throughout the rest of Canmore in areas such as Spring Creek and Bow Valley Trail.

Bean said the electric bus was expected in April, but is delayed with no set date for arrival. He noted another bus has been designated for the route from the service’s spare capacity.

At the November transit meeting, it was confirmed the bus was being delayed until the summer but that Roam had enough buses to serve the three-year pilot route. The route is expected to run from May to October.

The bus cost about $1.4 million, but 80 per cent of it came from the Federal-Rural Transit Solutions fund. The remaining $280,000 came from the Town of Canmore.

At Banff’s service review, transit is set to be discussed Dec. 13. Among the requests are three hybrid-electric bus purchases for 2026. One would be to expand service on route 2 to match the previously approved increase in frequency on route 1. Council approved a new electric bus for 2025, which will increase route 1 frequency from 22 minutes to 17 minutes.

A spare vehicle and a replacement bus for a 2008 hybrid bus is also proposed. The three 40-foot hybrid electric buses are budgeted for $3.6 million, but $1.44 million would come from the federal government’s Investing in Canada Infrastructure Program and $400,000 from Roam’s replacement reserve. It leaves $1.76 million to be covered by the Town of Banff if passed by council.

The transit commission ordered three highway coaches from MCI Coach Industries for regional routes, which are expected to be delivered in late 2024.  A request for proposals for electric bus purchases just wrapped up and the commission is analyzing the results.

The Outlook's attempts to reach Proterra were unsuccessful.

According to the bankruptcy court filing in the District of Delaware, U.S., Proterra has assets of $818 million, total debt of $609 million and has between 5,001 to 10,000 creditors.

The voluntary Chapter 11 bankruptcy proceedings that began in August allows Proterra to restructure its business, but also sell off branches of the company. It would also keep it out of bankruptcy, but potentially pay creditors less than what they claim they’re owed.

The California-based company was founded in 2004 and primarily serves American companies and transit services, but has Canadian customers in City of Edmonton, BC Transit and Toronto Transit Commission (TTC).

BC Transit has about 1,200 buses in its fleet and has the goal of being fully electric by 2040 and the TTC runs 25 Proterra buses. The Edmonton Transit Service ordered 60 electric buses in 2020.

U.S. Volvo Group announced it was buying Proterra’s battery business, including electric drivetrain and vehicle-electrification business units, with the transaction expected to close in early 2024 if the American courts approve the deal. The American branch of the Swedish-based company was selected as the winning bidder in an auction in November for $210 million USD. The assets being acquired are a battery module development centre in California and an assembly factory in South Carolina.

The U.S. bankruptcy court gave final approval for the sale on Nov. 29 and the closing date is expected in the first quarter of 2024.

Phoenix Motorcars, a California-based company specializing in electric shuttles and school buses, offered to purchase Proterra’s transit business line for $10 million. A sale hearing for the pending purchase is Dec. 12.

Cowan Equity, a financial backer of Proterra based in Toronto, bought the company’s energy business line such as charging infrastructure for an undisclosed amount. The sale is going through a Chapter 11 reorganization when Proterra exits bankruptcy.

All acquisitions are subject to the bankruptcy court’s approval as well as regulatory approvals and closing conditions.

“We are pleased to have reached this important milestone in our Chapter 11 process, and look forward to working with Volvo, Phoenix and CSI to close our pending transactions in the coming weeks,” said Gareth Joyce, Proterra’s CEO, in a media release.

Proterra had sold roughly 1,300 buses to more than 130 transit agencies in America and Canada.

The electric buses have a range of 350 kilometres per battery charge, with battery life being 12 years. In the summer, they do a full 18 hours before needing a charge, while in winter it’s 12-13 hours.

The route 3 Banff-Canmore regional bus travels about 800 km each day, while local routes often do about 200 km. The regional routes are largely served by diesel buses due to range, but electric bus capacity diminishes on highway travel.

Bean said a significant issue remains supply chain in securing parts, noting three of the Proterra buses are off the road due to inability to get a part.

“The warranty is one thing, the supply chain is another. We run fairly lean, so if you have a couple of buses down longer term, it affects our ability to deliver service,” Bean said.

With no specific bus-related maintenance companies in the Bow Valley, Roam’s fleet has to go to Calgary when significant repairs are needed.

Prevost Parts and Service can look after Nova buses, Big Rig Collision looks after structural and frame repairs and Cummins Sales and Service completes engine work.

“The businesses don’t exist here,” Bean said. “There’s shortages of labour to be able to do the job and sometimes we don’t have the equipment depending on what the job is.

“We’re seeing supply chain issues in general. We’re seeing huge challenges, even with our diesel vehicles. We send a number of vehicles into Calgary to do maintenance that we can’t perform here or don’t have the available labour. We often see buses coming back weeks or months later, just due to challenges with procuring parts in getting work done.

“Operating transit has become a lot more challenging in the last couple of years. It’s mainly supply chain issues. The Town of Banff’s maintenance team works hard to keep the buses on the road, but they’re seeing a lot of challenges with skilled labour shortages in the Bow Valley.”

Roam has had its highest-ever ridership this year, with more than two million people taking public transit. On Banff local routes, there were more than one million riders in mid-August and as of Sept. 24, there were 1.25 million riders.

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