A watchdog report finds the Postal Service met its legal requirements in estimating the environmental impact of its Next-Generation Delivery Vehicle (NGDV) fleet.

The USPS inspector general’s office, in a report released last Thursday, found the agency’s acquisition process for its next-generation fleet and its Environmental Impact Statement (EIS) followed requirements under the National Environmental Policy Act.

The 1996 NEPA legislation requires agencies to prepare an EIS when evaluating major federal acquisitions that could significantly affect the environment.

USPS Vice President of Corporate Affairs Judith de Torok and Vice President of Supply Management Mark Guilfoil said they generally agreed with the IG office’s findings.

“The Postal Service correctly recognized the relative and notable environmental benefits of [EVs] compared to internal combustion engine (ICE) vehicles and used Environmental Protection Agency endorsed models to support parts of its environmental analyses, though there were concerns related to the precision of the assumptions used,” Guilfoil and de Torok wrote.

The IG report’s findings support USPS’s claims that it exercised due diligence throughout the environmental review process, at a time when the agency faces three lawsuits challenging its review process.

The lawsuits contend that USPS set the estimated cost for electric vehicles unrealistically high as part of its environmental impact statement (EIS), but placed a low bar for the future price of gasoline.

California is leading 15 other states in a lawsuit to prevent USPS from taking any further action under its next-generation delivery vehicle contract, until it conducts a more in-depth environmental review.

The Natural Resources Defense Council and the United Auto Workers (UAW) filed a second lawsuit in New York, while EarthJustice is leading a third lawsuit in California.

Plaintiffs filed the lawsuits at a time when USPS expected electric vehicles would make up at least 10% of its next-generation fleet.

USPS currently plans electric vehicles will make up 75% of its next-generation fleet, as part of a $10 billion spending plan. USPS received about $3 billion of those funds through the Inflation Reduction Act.

The new USPS plan has the support of the White House, which pressed the agency for a larger commitment to electric vehicles for much of last year.

The White House said USPS under its new strategy “will exceed President Biden’s requirement for each agency to electrify its federal fleet.”

While USPS met its legal requirements under federal environmental law, the IG’s office outlined some concerns it would like to see addressed in a supplemental EIS the agency expects to complete in August.

“The Postal Service’s development of an [Supplemental Environmental Impact Statement (SEIS)] and their recent announcement of their intention to acquire at least 66,000 [Battery Electric Vehicles (BEVs)] over the next six years shows an increased emphasis on protecting the environment by further electrifying its delivery fleet,” the report states.

The IG report found USPS used a baseline average nationwide gasoline price of $2.19 per gallon in its final EIS, a price it obtained using figures from October 2020.

In a follow-up analysis using 2021 nationwide prices — and an average price of $2.71 per gallon — USPS found the total cost of operating gas-powered next-generation vehicles increased by nearly $200 million, while the total cost of electric vehicles went up by just over $2 million.

“Postal Service officials stated these results did not materially affect the overall investment cost differentials as [Electric Vehicles (EV)] costs still greatly exceeded those compared to [internal combustion engine (ICE)] vehicles,” the report states.

The IG’s office, however, said the agency’s total cost of ownership methodologies “should be updated to reflect current prices or regional delivery operational variances.”

“Considering the potential future volatility of these prices, efforts to include more current, longstanding baseline data where applicable would help strengthen the overall [total cost of ownership (TCO)] analysis and stakeholder confidence in the SEIS,” the report states.

USPS in its environmental review assumed its next-generation vehicles would travel, on average, about 17 miles a day.

The IG report, however, said USPS should expect electric vehicles deployed on longer routes — up to 70 miles — would generate more cost savings, compared to gas-powered vehicles that would need refueling.

The IG report also found USPS assumed a higher cost of ownership for electric next-generation vehicles, compared to commercial alternatives,  but auditors said that could be attributed to the NGDV being a purpose-built vehicle.

The IG’s office conducted its review of the USPS environmental review at the request of former House Oversight and Reform Committee Chairwoman Carolyn Maloney (D-N.Y.) and former Rep. Brenda Lawrence (D-Mich.), as well as Reps. Gerry Connolly (D-Va.), Stephen Lynch (D-Mass.) and Jared Huffman (D-Calif.)