Delay could cost taxpayers $48k a month
Plan to buy streetlights from Grid held by City Council
For the second time the Warwick City Council refrained from making a decision on a proposed initiative to purchase its more than 9,000 streetlights from National Grid in order to potentially save over a half million dollars in the short term in fees and potentially millions in the long run, as the purchase would set the table for the city to convert to energy-efficient, longer-lasting LED lights for all its streetlights.
The response to an RFP for the initiative was responded to by only one company, PRISM (Partnership for Rhode Island Streetlight Management), a nonprofit based in Wakefield that has led the charge in helping municipalities purchase their streetlights in order to realize savings sometimes as high as 70 percent from what they once paid to National Grid.
The situation breaks down like this. The City of Warwick, according to its inventory list provided by National Grid, has 8,881 streetlights that are maintained and supplied electricity through National Grid. The vast majority of these lights are on multi-purpose utility poles, which also hold wires from telecommunication companies and transfer electricity throughout the city’s power grid. Another 200 or so poles are singular poles, strictly used for lighting with no other attachments.
National Grid doesn’t simply do this for free, in fact they charge three separate fees – a fixture charge, a delivery charge and a supply charge, according to George Woodbury, co-founder of PRISM and a national expert in streetlight management. Woodbury said for one type of streetlight the city gets charged about $160 to $180 per year, per fixture, in fees for what amounts to between $35 to $38 worth of actual electricity.
In total, according to the city’s bid package, Warwick pays an annual cost of $858,956 for maintenance to streetlights through National Grid. To purchase the 8,881 streetlights and approximately 215 singular light poles from National Grid would cost about $48,000 – this is phase one of the PRISM process.
Before this can occur, the city would have to enter into a maintenance contract with a company – in this case PRISM, through its subcontractor for Warwick, K Electric (a Warwick company) – to replace National Grid and perform maintenance on the lights. This would cost another approximately $600,000 over the course of a three-year maintenance contract with PRISM (about $199,000 a year).
Additionally, the city would be on the hook to pay the incurred difference of about $87,000 in actually supplying the electricity to the streetlights each year – this is due to a provision within the law that allows National Grid to incur a slight upcharge in electricity rates to municipalities that seek to maintain their own streetlights.
All of those expenses in mind, the city would still realize immediate savings of $572,838 by purchasing its streetlights and procuring its maintenance elsewhere, due to the elimination of National Grid’s costly fees and its high-priced maintenance – which multiple councilpersons admitted was more than lackluster in its timeliness of service and satisfaction of completed work.
According to Jeff Broadhead, executive director for PRISM, K Electric would be held to a tight standard for maintenance within the city if they were in charge. They would have five days to repair small issues (such as a singular light that goes out in a residential neighborhood), and would have to respond to a major incident, such as a pole going down across a roadway, in two hours.
“They [K Electric] are already well equipped to do that with existing trucks and their existing crews,” said Broadhead, who wrote the Rhode Island legislation that allowed municipalities to purchase their streetlights, passed by the General Assembly in 2013.
Phase two of the process (not included in this bid) would be to convert the city’s streetlights to LED lights, which are brighter, use less power and have a higher life expectancy (20 or more years, according to Woodbury) than the currently used lighting sources – which range in Warwick from antiquated and inefficient mercury vapor lights to higher quality but still outclassed high pressure sodium-based lights.
This conversion would add to the cost savings for the city, as they use less power and are less expensive to maintain. Broadhead said that if every municipality in Rhode Island converted to LEDs, it would save 45 million kilowatts per hour annually.
Council not convinced
Despite the presentation, which was first heard back in February and was held a month until this most recent meeting on Monday, March 5, the council decided it still did not have enough information to act on the bid.
“I think this is an industry that is emerging,” said council president Joseph Solomon. “There’s a lot of questions that have to be answered. There has to be a lot of assurance before we commit to a $600,000 contract for a product that we’re going to be acquiring down the line.”
Solomon was concerned that the city might incur hidden fees from the providers of LED lights, and that they needed to perform more “due diligence” before committing the money.
However Broadhead said that by holding the measure again, the city council was actually costing the taxpayers of Warwick, and reiterated that the bid in question is not actually for the installation of LED lights, rather it was just for the first step of purchasing of its existing lights and transferal of maintenance to a local company for significant cost savings over National Grid.
“The delay the council just put through, for all of its merits, is costing Warwick $48,000 a month in non-captured savings,” he said on Wednesday. “Why leave $48,000 a month in Grid's pocket?”
Others on the council took issue with the bid proposal itself, claiming that it had conflicting numbers of streetlights, and that the dollar estimates didn’t add up.
“The numbers are all over the place, it doesn’t make any sense, the preparation is, I don’t think, quite adequate,” said Ward 5 councilman and finance committee chair Ed Ladouceur, who proceeded to motion to hold the measure until May 21.
Broadhead said that the numbers PRISM responded to in regards to the number of streetlights come directly from National Grid’s count, which he said on average are inconsistent with the real numbers by between 6 to 10 percent. He said PRISM would perform their own count of streetlights if they were to come to terms with the city, and adjust their costs going forward on the accurate numbers.
“So far we've been well within our budget for every community,” he said.
Mayor Scott Avedisian, who had been talking with PRISM for about a year, said he was disappointed by the inaction despite the clear cost savings.
“It’s very disappointing we have a great proposal to save almost $50,000 a month on an energy initiative that the council hasn’t acted on,” he said. “We chose a local contractor that knows the city well and is prepared to do this work.”
George Woodbury is a retired Army Colonel and former director of DPW in Fitchburg, Mass. and has been working in streetlight management for about 18 years. He helped write the legislation in Massachusetts that first allowed municipalities to purchase their streetlights (also from National Grid), which formed the backbone for the similar Rhode Island legislation.
PRISM first worked with Providence in March of 2015 to become the first community in Rhode Island to purchase its streetlights and convert the entirety of its 17,000 streetlights to LEDs. It took six months, according to Woodbury. He said that 27 other communities in Rhode Island have since worked with PRISM to begin the process as well, although five of those, including Cranston, wound up going in a different direction.
Woodbury stressed that PRISM is a nonprofit that was formed with the sole purpose of creating long lasting solutions to streetlights in cities and towns in Rhode Island that save taxpayers money.
“You could contract with Siemens, you could contract with Honeywell, you could contract with Johnson Controls,” Woodbury told the council. “You could contract with any number of companies and they would do this work for you for about 40 percent more than we charge. We are a nonprofit. Everything is open book. We go out and we competitively bid the products for you, we competitively bid for the labor for you. Our role is to make this as simple for the town and to do it in the way that is the lowest possible cost.”
Woodbury said that, although he has heard pretty much every concern voiced to him from community leaders throughout his career and he challenged anyone to find a community who was displeased with the work PRISM accomplished, he understood the council’s hesitancy and would be happy to continue working with Warwick.
“We'll have to help them see that and get them the facts, once they get the info I think they'll be very comfortable with this,” Woodbury said. “I'm happy to do that.”