RPVCCA_CC_SS_2013_05_21_02b_RPV_Street_Light_Acquisition_RetrofitCITY OF
4o RANCHO PALOS VERDES
TO:
FROM:
DATE:
HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
COUNCILMAN JIM KNIGHT
MAY 21,2013
SUBJECT:RPV STREET LIGHT ACQUISITION/RETROFIT
RECOMMENDATION
Direct staff to undertake a feasibility analysis of acquiring SCE owned street
lights,retrofitting City owned lights with more energy efficient LED bulbs and explore re-
setting SCE's rate structure as well as programs available for rebates and energy cost
savings financing.
COUNCILMAN SUMMARY
Over the past year I have attended several workshops at the South Bay Energy
Services Center (SBESC)covering current trends of cities taking control of their street
light energy costs by a combination of acquiring SCE owned street lights,re-negotiating
unmetered rates charged by SCE and changing out light fixtures to more efficient bulbs.
I acquired a copy of our city's electric bill from staff and took note that the bill
had one line item for "various"LS-1 lights (SCE owned,unmetered,all night)with an
annual cost of over $300,000.The bill provided no way to identify where these poles
were located,what type of bulbs were being used nor any accompanying
documentation as to how SCE came up with their unmetered rate.This motivated me to
dig a little deeper into our street lighting inventory and I was able to obtain a disk from
SCE that listed our LS-1 and LS-2 (RPV owned,unmetered)street lights,but it was
organized in a very disjointed fashion with over 70 different maps.The work to
extrapolate the information and provide a full analysis was a daunting task requiring
extensive expertise.So I am proposing that Council direct staff to pursue a feasibility
analysis of pole acquisition,bulb replacement and explore with SCE the possibility of a
re-negotiation of un-metered rates as well as potential rebate and/or financing
programs.
My suggested path is to divide the task into three phases:
Phase I -Analyze utility bills and identify characteristics of individual poles:
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May 21,2013
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1)Establish a full inventory and location of light poles to determine which are
LS-1 and LS-2 while separating out street lights from RPV's facility use under the GS-
1(general service,non-demand rate),GS-2 (time of use)categories.Comments on age
or condition of the pole/bulb should be included.
2)Identify poles that have ancillary uses such as cell phone towers,other
utilities (cable,etc)or transitory wiring which may affect our ability to acquire the poles
from SCE.
3)Identify the type of light fixture on each pole and energy/maintenance cost for
each type of pole/bulb.
4).Understand the underlying methodology for the SCE pricing structure for each
pole.
NOTE:Our current Landscaping and Lighting maintenance contractor,Harris and
Associates,has the technology to do the inventory.The inventory data should include
1-3 of the above list and delivered to us in a form that the data can be manipulated for
our analysis.GS-1 ,2 for facility use,PA-1,2 (agriculture pumping,Le.,dewatering
wells)and TC-1 (traffic lights)should be separable data.
Phase II -Financial Feasibility Estimates
1)Calculate expected cost of acquisition of qualified poles and show any cost
savings of RPV ownership vs.current LS-1 arrangement.
2)Calculate cost/benefit of bulb replacement from existing High Intensity
Discharge (HID)lamps,such as High Pressure Sodium,with new LED or Induction
technology,for both LS-1 acquired poles and existing LS-2 poles.
3)Compare operation and maintenance costs of existing light fixtures against
LED replacement.
4)Look at re-negotiating un-metered rate structure.
Phase III -Council Directive
With the above feasibility analysis,Council gives direction as to what action (or
no action)to take.
ADDITIONAL INFORMATION
Below is more information on the subject as well as assumptions made at the
workshops I have attended and from reports of the Southern California Regional Energy
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RPV Street Light Acquisition/Retrofit
May 21,2013
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Center (SoCaIREC).I would ask staff to verify the information and analyze and refine,if
needed,the assumptions when making their recommendation to Council adding any
additional pertinent information and analysis.
Purchase and Maintenance costs
1)Loaded pole purchase cost of $600/fixture (see discussion on cost
basis/depreciation)
2)Retrofitting HPS to LED fixtures has a loaded One-Time Cost of $417 /fixture
3)Estimated operation and maintenance expenses are $3.50/pole/month for
HPS and $1.50/pole/month once retrofitted to LED technology.
Utility Owned lights
SCE's recent change in policy allows municipalities to consider purchasing utility-
owned street lights with substantial delivery rate savings by switching from LS-1 rates to
LS-2 rates.Once city-owned,streetlights can be upgraded to LED (or Induction)with
even greater savings.
As with other cities that have embarked on this transition,SCE will require a
formal Due Diligence and Appraisal Detailed inventory,with age and condition of
facilities,and other indicators of value.SCE provides the city with a comprehensive
report with a "not to exceed"estimate for asset transfer based on a sample.The City
then receives approval to move forward with possible funding of a comprehensive
study.RPV should compare the SCE report with our own inventory data.
To determine acquisition value,SCE uses current replacement cost depreciated
by the age and condition of the pole/light.But,as with real estate or most other
commodities,a more appropriate method would be to start from the original installation
cost as a basis,then depreciate the life/condition of the pole/light.This method
produces a fairer value as it more closely reflects SCE's true cost per pole.No matter
which method,the city's acquisition of the pole/light will benefit SCE by removing the
future liability of the pole replacement cost off SCE's books.These are all points of
negotiation with SCE.
Acquisition costs will be lower if RPV transfers over the poles before SCE
replaces the poles with new ones as we can take advantage of a depreciated
evaluation.
Tariff or SeE Rate Structure
Street lights that are unmetered pay a tariff for distribution and a tariff for the
lamp type.This rate decreases after the city acquires the pole from SCE (LS-1 converts
to LS-2).The rate decreases even more with a bulb change (a reduction not available
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RPV Street Light Acquisition/Retrofit
May 21,2013
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under LS-1 status).In order to assure the rate reduction,the City must notify SCE of
any change of bulb otherwise they will keep the old tariff rate.
A General Rate Case settlement in 2013 is lowering some of the costs of LS-1
and LS-2 tariffs,freeing up immediate cash flow which can be used to justify retrofitting
the streetlights this year.Also SCE has an Energy Leader Partners (ELP)program with
rebate tiers based upon the status of the city.RPV is currently at the Gold status.
Bulb characteristics
LED lights have a more blue/white color than HPS.This feature,along with LED
intensity,changes the visual characteristics on the ground.I would suggest before
changing out all city bulbs that a few LED bulbs be installed at test locations to observe
these ch~racteristics and watch for spill over into resident's backyards.
Also,LED lights now come with a wide variety of choices including:light
intensity,color,reflectivity,separable drivers,interchangeable LED subpanels,and
focusing arrays to direct light without the need of a shield.Staff should consider these
choices in relation to street illumination effects when recommending bulb replacement.
LED savings
Light Emitting Diode (LED)lamps show energy savings between 35%and 70%
over HID lamps.(30-60%energy savings by switching to induction).
Other advantages of LED:
-Longer life,lower maintenance costs.LED lasts 80K hrs.and only needs to be
replaced every 19.3 yrs vs.24K hrs.and 5.8 yrs.replacement cycle for HPS
lamps
-Higher quality light output
-Instant-on with no run-up or re-strike delays
-No mercury,lead or other known disposable hazards
-Opportunity to implement programmable controls (e.g.bi-Ievellighting)
SBEse assistance
I have other resources I will forward to staff including The Responsible
Purchasing Network (RPN)recommendations for street lights and a report from
Huntington Beach's street light acquisition plan,but I feel the best source of assistance
for RPV is using the services at SBESC.
SBESC has a consulting service to help with analyzing financing for the
acquisition of poles and bulb replacement by using energy cost savings without
affecting the general fund budget.I have already been in touch with SBESC's
consultant and,at no charge,he has provided a Cost-Benefit Analysis of LED Street
Lighting Upgrade report for RPV (Attachment A).
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The report shows:
Table 1 - A breakdown of our LS-1,LS-2 inventory
Table 2-Energy consumption per account
Then several scenarios of cost savings:
1)Upgrading LS-2 fixtures
2)Analysis of purchasing LS-1 poles,then upgrading to LED technology
3)Combination of 1) and 2)together.
The report includes a financing option (avoiding General Fund expenditures)and
using energy cost savings as the driving force for the payback analysis.The low
hanging fruit is scenario 1,upgrading existing LS-2 fixtures resulting in positive cash
flow after one year.
Staff can consult with SBESC to follow up and find out more about the consulting
services for the feasibility study and rebate programs available.
Attachment:
South Bay Cities Council of Governments letter dated April 4,2013 regarding Cost-
Benefit Analysis of LED Street Lighting Upgrade for Rancho Palos Verdes
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April,4,2013
SOUTH BAY CITIES
COUNCIL OF GOVERNMENTS
5033 Rockvalley Road
Rancho Palos verdes,CA 90275
(310)377·8987
sbccog @ southbay"itie~.&!:9
www.southbaycities.org
Jim Knight
City of Rancho Palos Verdes
30940 Hawthorne Blvd
Rancho Palos Verdes,CA 90275
Subject:Cost-Benefit Analysis of LED Street Lighting Upgrade for Rancho Palos Verdes
Dear Mr.Knight:
The South Bay Environmental Services Center (SBESC)is pleased to provide you with the enclosed
summary of an initial cost-benefit anaJysisof upgrading the City's street lights to a more efficient lighting
technology.Following today's workshop,the SBESC staff will schedule a one-on-one consultation with
you to further review the cost-benefit analysis and make necessary adjustments to assumptions and
results based on your input.The following baseline information in Tables 1 and 2 was collected and used
by SBESC in our analysis.The existing street light inventory for the City's SCE accounts is listed below.
Table 1.Rancho Palos verdes Street Lamp Inventory
Fixture
Wattages1
sow
70W
100W
150W
200W
250W
400W
Total
#'of Poles
LS-1 2
o
256
24
118
24
7
2,376
#of POles
LS_2·3
o
o
8
o
8
20
7
43
#ofPo'les
LS-3 4
o
o
o
o
o
o
o
o
#ofPc>les
Total
o
256
1,955
24
126
44
14
2,419
1.All fixtures are assumed to be High Pressure Sodium fixtures.
2.Utility-owned poles,unmetered.
3.City-owned poles,unrnetered.
4.City-owned poles,metered.
LOCAL GOVERNMENTS IN ACTION
Carson
Los Angeles
EI Segundo Gardena Hawthorne Hermosa Beach Inglewood Lawndale Lomita
Manhattan Beach Palos Verdes Estates Rancho Palos Verdes Redondo Beach Rolling Hills
Rolling Hills Estates Torrance Los Angeles County
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The total annual energy consumption and cost for all street lights is summarized below.
Table 2.Annual Energy Consumption and Costs per Account Type.
Rate #of
Accts Cost ($)kWh
LS+ALLNITE 4 $349,844 1,166,306
LS·2
LS·3
2
a
$5,235
o
55,272
o
Total 6 $355,078 1,221,578
The SBESC evaluated three potential retrofit project scenarios for the City of Rancho Palos Verdes.The
assumptions and results for each scenario are as follows:
1.Upgrading existing LS-2 fixtures to LED technology.
Assumptions
Loaded Cost of SCE Poles IS/pole):So
Project Finance Rate (%):3.90%
Finance Period (yrs):15
Pole Replacement Reserve (per pole/rna):$0.60
SCE Tariff Escalation Rate (%/yr):3.00%
O&M,Repairs,Replacemeht Esc.Rate (%/yr):3.·00%
Discount Rate (%):2.00%
HPSO&M Cost (S/pole/mo):S3.50
LED Retrofit O&M (S/pole/mo):S1.50
Results
Cost of SCE Poles ($):$0
LED Installation Costs ($):$21,921
SCE Incentive Amount ($):$2,809
Loan Amount ($):$19112
Positive Cash Flow Begins in Year:1
Base Case PV ($):$115,789
Proposed Case PV ($):$78,106
20-year NPV Savings ($):$37,682
2.Purchasing LS-l poles from SCE and then upgrade to LED technology.
Assumptions
Loaded Cost of SCE Poles ($/pole):S600
Project Finance Rate (%):3.90%
Finance Period (YfS):15
Pole Replacement Reserve (per pole/rna):SO.60
SCE Tariff Escalation Rate (%fyr):3.00%
O&M,Repairs,Replacement Esc.Rate (%/yr):3.00%
Discount Rate (%):2.00%
HPS O&M Cost (S/pole/mo):S3.50
LED Retrofit O&M (S/pole/mo):$1.50
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Results
Cost of SCE Poles ($):$1,425,600
LED Installation Costs ($):$979,784
SCE Incentive Amount ($):$91,846
Loan Amount ($):$2,313,538
Positive Cash Flow Begins in Year:11
Base Case PV ($):$7,041,201
proposed Case PV ($):$6,307,854
20-year NPV Savings ($):$733,347
3.Both Scenarios 1 and 2 together.
Assumptions
Loaded Cost of SCE Poles (S/pole):$600
Project Finance Rate (%):3.90%
Finance Period (yrs):15
Pole Replacement Reserve (per pole/mo):SO.60
SeE Tariff Escalation Rate (%/yr):3.00%
O&M,Repairs,Replacement Esc.Rate (%/yr):3.00%
Discount Rate (%):2.00%
HPS O&M Cost ($/pole/mo):$3.50
LED Retrofit O&M ($/pole/mo):$1.50
Results
Cost of SCE Poles ($):$1,425,600
LED Installation Costs ($):$1,001,705
seE Incentive Amount ($):$95,421
Loan Amount ($):$2,331,884
Positive Cash Flow Begins in Year:11
Base Case PV ($):$7,183,501
Proposed Case PV ($):$6,411,576
20-year NPV Savings ($):$771,925
We look forward to working together with you in pursuing these potential cost savings opportunities .
Sincerely,
The SBESC Staff
#.p;\fV
._---------_..---_-
DAVID MAGARIAN,LEED A.P.
ENVIRONMENTAL PROGRAMS SPECIALIST
SOUTH SAY
ENVIRONMENTAL SERVICES CENTER
South Bay Cities Council of Governments
Save Water,Energy,Money &the Environment
20285 S.WESTERN AVE ..STE.100
TORRANCE.CA 90501
(310)371·7222 EXT,210 (;
CELL (310)612·0894
DAVID.MAGARIAN@SBESC.COM
WWW.SBESC.COM
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