City of Edmonton's claim against electric bus manufacturer balloons to $82M

The City of Edmonton's claim against a U.S. electric bus manufacturer has inflated to $82 million, according to court documents.

The city bought 60 Proterra electric buses, which have not performed well over the few years they have been in service.

The company filed for Chapter 11 bankruptcy protection last summer and the city has been active during those proceedings.

Back in the fall, the city was seeking damages of $1.3 million US and assurances that its contract with the company would be fulfilled.

However, a proof of claim filed early this month shows the city is now seeking more than $82 million for breaches of contract and negligence.

Proterra's transit business was sold last month to Phoenix Motor Inc., another electric vehicle company. According to the the city's proof of claim, Phoenix was going to inherit Edmonton's contract with Proterra.

But one day before the January sale hearing, Edmonton was removed from the list of contracts. A few days later, Proterra filed a motion seeking to reject certain contracts, including Edmonton's, according to the city's proof of claim.

The removal means the contract and warranty provisions between the city and the company likely won't continue to be honoured.

"The company obviously was not willing or able to deal with an $82-million claim," said Geoffrey Dabbs, a Vancouver lawyer who specializes in commercial and insolvency matters.

Dabbs, who is not involved in the case, said Edmonton will probably not receive much in damages because it has an unsecured claim and secured creditors get priority.

"We don't know right now, but it could be pennies on the dollar," he said.

Smaller battery range

According to the recent proof of claim, the biggest problem with Edmonton's electric buses has been their battery ranges.

The contract specifies the buses would have a range of 328 kilometres, or 268 in extreme cold.

But none of the city's buses has ever travelled 328 on a single charge and on average, the range has been between about 165 and 250 kilometres.

There have also been problems with hardware, leading to more than half of the buses being regularly out of service, and cracking in the buses' body structures.

Leigh McCabe, a maintenance representative with Amalgamated Transit Union Local 569, told CBC News in November that some of the electric buses had been down for more than a year waiting for parts.

Ward Nakota Isga Coun. Andrew Knack said the situation is frustrating but the money the city spent on the buses is not wasted.

"There are issues around how long they can run in a shift and the routes that they can run, but they are still providing service to Edmontonians every day," he said.

Knack said the city has learned from the experience. A hydrogen bus pilot is running for a long period of time to ensure the technology works well, he said.

"The last thing I want is for the City of Edmonton to say we should never try anything … because there's that risk if you're never willing to try something new, then you potentially miss out on great opportunities."

Edmonton Transit Service branch manager Carrie Hotton-MacDonald said in an emailed statement that as the city navigates the legal process, it will continue to evaluate options in order to protect legal and financial interests.

"We are deeply disappointed that this is the situation we — and other transit agencies across North America — have found ourselves in with Proterra," she said.

Proterra has not yet responded to a request for comment.