Convert image and save to same folder in Automator
Use the following actions:


Duplicate Finder Items 
Change Type of Images
Rename Finder Items: Replace Text (" copy" with "")


With this sequence, the 'change type' occurs with the copy while ignoring the original. You end up with both files in the original folder.

NB To test as a workflow prior to rendering as a service, insert Get Specified Finder Items at the beginning and specify your test image(s).