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Muni seeks state exemption to buy cheaper diesel-hybrid buses

Muni seeks state exemption to buy cheaper diesel-hybrid buses

Money Moves San Francisco, CA local

Muni postpones 378 electric buses to save $452 million, facing a $307 million deficit and thin federal grants.

September 14th, 2026: Budget crisis reported in local media

Overview

Updated Sep 15

San Francisco's transit agency voted to postpone buying 378 battery-electric buses, opting for cheaper diesel-hybrid models to save $452 million. The swap needs approval from the California Air Resources Board (CARB), which mandates the electric purchase.

The agency faces a $307 million operating deficit this fiscal year, projected to reach $434 million in five years. It requested $473 million in federal electrification grants since 2019 but received only $79 million. Two November ballot measures would raise $307 million a year; if they fail, up to 20 bus lines face cuts.

Why it matters

Delaying electric buses slows San Francisco's climate goals; failed bailout taxes would cut service on up to 20 lines.

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Key Indicators

$452M
Projected savings from switching to diesel-hybrids
Includes cheaper buses and avoiding $229 million in depot charging upgrades.
378
Battery-electric buses postponed
State mandate required these by 2031; Muni seeks five one-year exemptions covering 2027-2031.
$307M
Operating deficit this fiscal year
Deficit projected to reach $434 million within five years.
$79M of $473M
Federal electrification grants received of requested
SFMTA applied for $473 million in federal grants since 2019; only $79 million was awarded.
456
Vehicles in the exemption plan through 2031
132 standard and 224 accordion diesel-hybrid buses, plus 100 paratransit vans.

Voices

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People Involved

JK
Julie Kirschbaum
Director of Transportation, SFMTA
Supports the exemption request but open to trolley expansion later
 Steve Heminger
Steve Heminger
SFMTA Board Director
Proposed cheaper trolleybus expansion as an alternative to hybrid buses
 Bhavin Khatri
Bhavin Khatri
Manager of Muni's Zero Emissions Program
Defended the exemption request
 Brent Jones
Brent Jones
Director of Transit, SFMTA
Oversees bus procurement and the new hybrid and electric bus fleet

Organizations Involved

San Francisco Municipal Transportation Agency
San Francisco Municipal Transportation Agency
Transportation agency
Seeking exemption from CARB electric bus mandate

Operates San Francisco's municipal bus, light rail, and cable car systems.
California Air Resources Board (CARB)
California Air Resources Board (CARB)
State air quality regulator
Must approve or deny SFMTA's exemption request

Regulates air pollution and greenhouse gas emissions in California, including transit fleet mandates.

Timeline

March 2021 September 2026

5 events Latest: September 14th, 2026 · 2 months ago
Tap a bar to jump to that date

  1. Budget crisis reported in local media

    Latest Report

    SF Standard reveals details of the exemption request and financial outlook.

  2. SFMTA board votes to seek CARB exemption

    Decision

    Board approved request to delay electric bus purchase for five years, opting for diesel-hybrids to save $452M.

  3. CARB votes to allow polluters to skip fund payments

    Regulatory

    CARB decision costs Muni over $200 million in expected cap-and-trade revenue.

  4. SFMTA proposes hybrid procurement for 2025

    Policy

    Agency acknowledged its next bus buy would be hybrid-electric, citing facility timing challenges.

  5. SFMTA adopts Zero Emission Bus Rollout Plan

    Policy

    Board approved plan to transition to battery-electric buses, aligned with CARB's Innovative Clean Transit rule.

Scenarios

1

CARB approves exemption, Muni buys diesel-hybrids

Likely Resolves by Mar 1, 2027

Discussed by: SF Standard, SFMTA staff

CARB grants the financial hardship waiver, allowing Muni to order 378 diesel-hybrid buses instead of electric ones. The agency saves $452 million, avoiding depot charging upgrades, and continues its zero-emission transition with a 2040 target. New hybrid buses arrive by 2031.

2

CARB denies exemption, Muni must buy electric or cut service

Unlikely Resolves by Mar 1, 2027

Discussed by: Transit advocates and fiscal analysts

CARB rejects the waiver, requiring Muni to purchase battery-electric buses as originally mandated. To cover the additional cost, the agency would need to find hundreds of millions in cuts, potentially slashing bus lines and frequency. This could trigger more service reductions than the two proposed tax measures prevent.

3

Partial approval: hybrid buses but paratransit vans remain gas

Possible Resolves by Mar 1, 2027

Discussed by: SFMTA board members, CARB staff

CARB approves the exemption for the 378 buses but requires Muni to buy zero-emission paratransit vans as originally planned. This would reduce savings slightly and complicate the procurement timeline.

4

Voters reject Muni bailout taxes, forcing route cuts

Deadline passed (Nov 3, 2026)

Discussed by: SFMTA, ABC7 San Francisco

The parcel tax (Stronger Muni for All) and regional sales tax (Connect Bay Area) would together raise $307 million a year for Muni. If either fails on November 3, the agency could cut up to 20 bus lines and run fewer buses on the rest. Mayor Daniel Lurie proposed the parcel tax.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

2020-2024

New York MTA electric bus transition challenges (2020-2024)

New York's Metropolitan Transportation Authority announced plans to electrify its bus fleet but repeatedly delayed procurement due to infrastructure costs and grid limitations. The MTA ordered hybrids and only 15 electric buses by 2024.

Then

Hybrid buses served as interim replacements, saving money but missing early electric targets.

Now

MTA now projects a slower electrification timeline, pushing full adoption toward 2045.

Why this matters now

Shows that budget strain and charging infrastructure are common barriers to electric bus mandates, not unique to San Francisco.

2019-2021

SFMTA's 2019 electric bus pilot program

Muni launched a pilot with 12 battery-electric buses to test performance on hills and in long service hours. The pilot ran through 2021, with charging infrastructure installed at Woods Division.

Then

Pilot demonstrated feasibility but revealed the high cost of depot upgrades.

Now

Informed the 2021 ZEB plan and current procurement strategy.

Why this matters now

Provides technical basis for the current exemption request; Muni continues to operate these buses today.

2020

California's 2020 Innovative Clean Transit regulation

CARB passed the rule requiring all transit agencies to buy zero-emission buses by 2029 and have a full zero-emission fleet by 2040.

Then

Transit agencies across California began planning electric transitions.

Now

Created the mandate that SFMTA is now seeking to postpone.

Why this matters now

Defines the regulatory framework that makes this exemption request necessary.

Sources

(8)
+2
The San Francisco Standard SFMTA The Voice of San Francisco San Francisco Chronicle ABC7 San Francisco Mission Local SFMTA SFMTA