First Student, First Transit, NextEra Energy Resources agree to jointly pursue electrification

First Student, Inc., First Transit, Inc., and NextEra Energy Resources, LLC today announced they have entered into a framework agreement and are working toward a joint venture to pursue the electrification of tens of thousands of school and public transportation vehicles across the U.S. and Canada. The collaboration brings together North America’s market leaders in school and public transportation and renewable energy to foster innovation and accelerate the mass adoption of zero-emission vehicles.

The transition to electric vehicles for the school and public transportation sector is expected to play a critical role in helping communities improve air quality and environmental health for student passengers, transit riders and area residents. In addition, utilizing the sizeable batteries of school and public transportation electric vehicle fleets for distributed energy storage and grid services has the potential to make a significant contribution to long-term sustainable clean energy transition in North America.

The U.S. and Canada combined represent the largest homogeneous student transportation market in the world, with approximately 520,000 yellow school buses in total. This market has remained consistent in size over time, with certain favorable factors driving fleet conversion to electric vehicles and potential V2G development:
– Increasing demand for clean, pollution-free school buses from schools, communities,
parents, and student passengers.
– Strategic location of school bus depots for installation of necessary charging, storage
and grid connection infrastructure.
– Low utilization and predictable daily schedules of school buses, providing greater
opportunity to optimize power charging and balance the grid.

The companies are collaborating to address these market opportunities by first capitalizing on First Student’s fleet of 43,000 yellow school buses, the single largest fleet in North America, and nearly 500 depots located across 40 U.S. states and seven Canadian provinces. Combining this scale with NextEra Energy Resources’ expertise is anticipated to help accelerate electrification from individual pilots to broader fleet rollout across the U.S. and Canada.

The U.S. and Canada combined represent one of the world’s largest public transit markets, with
approximately 160,000 buses and other vehicles in total. In addition, there are significant fleet
opportunities in shuttle services that address a variety of passenger transportation needs.
These markets have demonstrated long-term stability servicing a range of clients such as
municipal transit authorities, airports and universities. The transit market is equally anticipating a
shift to electric vehicles, driven by an increased emphasis on delivering clean, pollution-free
transit solutions.

The collaboration intends to focus on First Transit’s base of more than 300 customers to create new business opportunities and revenue streams associated with fleet electrification.

President of First Student, Paul Osland, commented: “We are proud to take this significant step to improve the environmental health of our student passengers and the communities we serve. We have found a world-class partner in NextEra Energy Resources, who shares our vision of the importance that electrification and zero emission technologies will play in the future of student transportation. The electrification of school buses has already started and is poised to accelerate rapidly. This collaboration will position First Student as North America’s leading owner and operator of electric school buses.”

President of First Transit, Brad Thomas, remarked: “First Transit has led the way in mobility solutions for more than 60 years. With battery and electric vehicle prices falling rapidly, and with an increasing focus on sustainability, many fleets are preparing for wholesale electrification. The collaboration with NextEra Energy Resources will position First Transit as the leading provider of sustainable passenger transportation solutions in North America.”

President and CEO of NextEra Energy Resources, John Ketchum, added: “The growing shift away from internal combustion engines is expected to drive over one fifth of U.S. energy demand by 2050. Working with First Student and First Transit will enable future investments in electrification upgrades and charging stations, as well as energy management services. As demonstrated by our recent acquisition of EIQ, the market leading software platform for quantifying the value and timing of fleet conversions, this collaboration is consistent with our strategy as we continue to explore potential opportunities for electric and hydrogen transformation of the transportation sector.”

Both First Student and First Transit are part of FirstGroup plc, a leading provider of transport services in the UK and North America. The collaboration aligns with FirstGroup’s Mobility Beyond Today strategic framework, and the Group’s ambition to be the partner of choice for innovative and sustainable transport, accelerating the transition to a zero-carbon world. Rothschild & Co acted as sole financial advisor.