On Wednesday, the Alameda-Contra Costa Transit District (AC Transit) announced the signing of a contract with EnerDel, Ener1 Inc.'s lithium-ion battery subsidiary, to produce batteries for the urban transit buses.

AC Transit has placed orders for 16 new, next-generation, hybrid-electric fuel cell buses to replace the three older model fuel cell buses it has been operating since 2006. The new vehicles will use highly advanced battery systems developed by Indiana-based EnerDel Lithium Power Systems, the first company to produce automotive grade lithium-ion batteries on a commercial scale in the U.S.

Twelve of the buses, which are currently in production, will be the backbone of AC Transit's fuel cell fleet and be used by a consortium of Bay Area transit operators in the California Air Resources Board's only Advanced Zero-Emission Bus Demonstration program. The other four buses are being purchased by UTC Power and will be operated by various transit agencies under the Federal Transit Administration's National Fuel Cell Bus Program.