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Text-Alternative Version: MSSLC Member Case Studies - LED Street Lighting Programs Webinar
Below is the text-alternative version of the "MSSLC Member Case Studies - LED Street Lighting Programs" webcast, held May 8, 2013.
Edward Smalley: Good morning. Welcome ladies and gentlemen. I'm Edward Smalley with Seattle City Light, Seattle's publicly-owned utility. As Director of the Municipal Solid-State Street Lighting Consortium, I'd like to welcome you to today's webcast, Member Case Studies – LED Street Lighting Programs in Algona (IA), Asheville (NC), and Boston (MA).
We are very happy to have as our speakers today John Bilsten, General Manager of Algona Municipal Utilities, Maggie Ullman, Sustainability Director with the City of Asheville, North Carolina, and Glen Cooper, Director of Street Lights with the City of Boston.
Before we get started I'd like to give those who are unfamiliar with the Consortium's work a little bit of a background. The Consortium was created by the U.S. Department of Energy in 2010 using American Recovery and Reinvestment Act funds. It's supported by the Department of Energy's GATEWAY program and is utilized as an educational resource to educate folks on solid-state street lighting. As an independent resource, the Consortium is available to help those unfamiliar with LED technology identify important issues.
Our vision is really to accelerate the adoption of high performance solid-state street lighting. And doing this through the increasing knowledge around the performance of this technology and developing a structure for overseeing the guidance of how this is done through different programs of the Consortium. All of this is designed to help standardize different benchmarks to use in the industry, especially for end users.
There are over 370 different participating organizations within the Consortium. These come from municipalities, municipal utilities, industrial utilities, and others, as well as non-municipal organizations – all who have a vested interest in the proficient operation of street lights. These groups come from across the U.S. in all different sectors. We've got a couple of rogue states you can see here that are in gray that we're still looking for participation in. But nonetheless as you can see it's a broad participation group across the U.S.
Before we get going I wanted to give you a little heads up that we have a couple of upcoming events that you should be alerted to. A webcast starting on June 11 on Adaptive Street Lighting Controls: Experiences and Benefits. The following day we'll be reviewing the Consortium's Model Specification for Adaptive Street Lighting Controls. Please look for announcements of these events coming soon.
Our first presenter this morning will be John Bilsten. John is the General Manager for Algona Municipal Utilities and has served in that position since October of 1999. Algona Municipal Utilities is a community owned water, electric, cable TV, high-speed internet, and telephone utility that serves Algona and the surrounding areas. Algona Municipal Utilities has been very active in renewable energy and partially owns and manages the operations and maintenance for the Iowa Distributed Wind Generation Project located near Algona.
John is a graduate of the University of Northern Iowa with a Bachelor of Arts degree in Public Administration. John is a past President of the Iowa Association of Municipal Utilities, is a past member of the Advisory Council of the Iowa Energy Center, the Board of Iowa Public Power Agency, past board member for the Iowa Power Sun, and has been active in power supply and transmission issues in Iowa.
Speaking next will be Maggie Ullman, Sustainability Operator for the City of Asheville, North Carolina. Responsible for leadership, policy, and implementation of the sustainability program, she plays a centralized management role for the city's carbon footprint reduction efforts. In five years she has led the City of Asheville's efforts to reduce their carbon footprint by 17.6 percent of upwards of $1 Million with a void in spending.
The flagship program that contributed to this carbon reduction is the 8,000 fixed fixture LED streetlight upgrades, to be concluded in June of 2013. Maggie's recently funded the 25 member Southeast Municipal Sustainability Director's Network – or founded, I'm sorry. The Network uses a peer to peer learning model to disseminate best practices and leverage municipal sustainability leadership.
Our final speaker or presenter will be Glenn Cooper. Mr. Cooper is the Director of Street Lights in the City of Boston. He has held this title for the past three and a half years. He's a graduate of Quincy College with a degree in computer science and has a background in electrical engineering while he attended Northeastern University. Mr. Cooper has worked in the street lighting section for the past three years, gaining experience and knowledge about street lighting and has researched LED lighting to the point where it is presently being implemented in the City of Boston on a wide scale.
With that in mind we'll turn to our first speaker, Mr. John Bilsten, General Manager of Algona Municipal Utilities. John?
John Bilsten: Good morning Edward and welcome or hello from sunny Algona, Iowa. Algona, Iowa is located in north central Iowa. We're approximately two hours north of Des Moines, Iowa, and three hours south of the Minneapolis/St. Paul area. The population of Algona is 5,600 people. Algona Municipal Utilities is electric, water, and communications utility as Edward indicated. And we're owned and operated by Algona Municipal Utilities and the community.
Our street lighting is operated and maintained by Algona Municipal Utilities and funded by the City of Algona. The project goals for our LED street lighting project really consisted of a few major areas, the first of which was a reduction in energy and maintenance cost for our street lighting, improvements in lighting quality, high quality LED lighting with a ten year warranty, and a design by a lighting expert, in this case by Mike Lambert, who is on the call today.
And finally we wanted to find the best cost for LED lighting fixture. As part of that, or in able to achieve that, we were part of a joint purchase project through the Iowa Association of Municipal Utilities. Later in my presentation, Anne Kimber, the Director of Energy Services for the Iowa Association of Municipal Utilities will talk about that joint project. The Algona Project was a partnership with the Iowa Association of Municipal Utilities and Mike Lambert, a lighting design expert and consultant.
We used both IMU and Mike Lambert for the design, procurement, and the LED expertise. This project was a collaboration between Algona Municipal Utilities and the City of Algona. Algona Municipal Utilities provided the upfront funding, labor, and project management. And then we utilized a zero interest loan with the city. The City of Algona will pay back the project cost over an approximately six year period.
The project funding, as I indicated earlier, was upfront by the Algona Municipal Utilities with one half of the project cost, which included labor, materials, design, and procurement, funded through an Energy Efficiency and Conservation Block Grant. And those are funds from the federal government funded through the State of Iowa. The other half of the project cost was funded by Algona Municipal Utilities.
We had several challenges as we began our process towards the LED street lighting. The first of those challenges was looking at or trying to determine among the variety of fixtures and claims for LED street lights that we were finding from vendors, and a lot of vendor pressure to take their particular fixture. Up front price was also a deterrent. The price per unit, or price per fixture, was very high. We determined that we really needed accessible technical resources for good roadway lighting practices because we had a lack of that expertise among our own staff.
We're a small utility in terms of design and determining the LED street lighting. We really needed assistance and that's where the Iowa Association of Municipal Utilities and Mike Lambert came in. Up front cost was another one of the challenges. And finally, gauging community interest was a challenge that we had. Some of the other challenges were the timeline for the Energy Efficiency Block Grant. All of the fixtures had to be installed by July 31st of 2012.
We had a very short lead time in procuring the fixtures and getting them installed. Under the grant all of the luminaires had to meet the Buy America Standards. And then Algona Municipal Utilities had to demonstrate that the luminaries had a simple payback within the life of the fixture. We wanted the confidence among the community that they would accept the project, and provide improved lighting. So one of the things that we chose to do is put up some test lights that would be very similar to lights that we wanted to install throughout Algona and encourage the community, the City Council, the Board of Trustees of Algona Municipal Utilities to take a look at those lights. They were able to do that and gave us really positive feedback.
Now I'm going to turn the presentation over to Anne Kimber, the Director of Energy Services with Iowa Association of Municipal Utilities to talk about the joint purchase project.
Anne Kimber: All right, thank you very much. I'm going to talk very briefly about the Municipal Utilities Association's role in this project. We actually had 27 cities that had gotten EECBG grants that included some evaluation of street lighting energy efficiency and retrofits. And most of these numbers were small. In fact half of the IMU members in general have fewer than 500 meters. And they're not typically ones that have a lighting expert on staff. But they did have this grant funding.
We're interested in helping them get the best bang for their grant dollar. And that's why we developed this RFP process. It was also a new lighting efficacy standard for street lights that has come into being in Iowa that requires 66 lumens to watt efficacy. And we wanted to make sure that the city street lighting project met that efficacy requirement. Otherwise they weren't going to get their street lighting cost reimbursed by the state. And that was causing a lot of delays actually in getting their EECBG project finished. We had to do a lot of work pretty fast to get this RFP developed. Fortunately we had the new DOE model specification and the timing was perfect for us to use that specification in our RFP.
John, if you want to advance to the next slide that would be great. Previous to developing the RFP we had done a project called Whole Town Audit where we analyzed city energy use in a number or sectors. And the pie chart I'm showing you are one small city municipal energy use, and 37 percent of what the city was consuming for energy was consumed by street lights with a close second being their wastewater treatment plant. And this is not unusual for small cities. Street lights are a significant portion of their city energy consumption, and for the small cities that we were looking at, street lighting consumed about 26 percent of their overall energy. When we showed these results to cities they immediately wanted to do some kind of street lighting project because it was kind of a no brainer that it would benefit everybody since everybody has to pay for the street lights. It was an easy sell for us.
Okay John, if you want to go to the next slide. So we have a number of reasons for doing a RFP. We had to make sure the street lights were high quality, that the warranty would be a good, tight warranty, that we met the grant requirements, that we met state regulations and that we could somehow manage to get lower prices and achieve economies of scale. With Mike Lambert as our lighting consultant we modified the material version of the DOE model specification.
And we went ahead and we publicized our RFP widely in several plan rooms across the country actually. And then we used a lighting consultant to evaluate our bids. We had only a month actually from the issue of the RFP of selecting a bidder. All of this was driven by having to get all the streetlights installed within six months basically of selecting the bidder. It was a fast and interesting plan. Go ahead John and advance to the next slide.
What I'm showing you here is a data risk slide showing the comparison of bid prices, the lowest bid. And I'm not going to talk about actual bid prices. And I'm not going to mention the ultimate vendor we selected. But if you look at the bar graph, on the very left hand side, the low bid that we accepted is set to one. And then you can see how the range of bids compares with that lowest bid. And on the top we have the fixture that was equivalent to the 250 watt high pressure sodium that we were retrofitting.
The highest bids were close to almost 1.6 times the lowest bid. And then on the bottom of our graph the highest bid was almost 2.5 times the lowest bid that we received. Then on the left hand side there's a little table there where I'm showing the average price quoted for each of these LED fixtures that were replacing high pressure sodium. Then I'm showing the standard deviation on the right. Basically for a 100 watt, high pressure sodium retrofit, by doing the RFP we saved our cities about 22 percent of the price that they likely would've paid for these fixtures.
The 150 watt savings was about 13 percent of what we would've paid. It's kind of an estimate. And then we had about a 15 percent savings by just doing the RFP. We were very, very pleased with what we got. It met all our criteria. We were able to get a 10 year warranty for the fixtures. We've had a lot of satisfaction with the project. And the results are today that we have 20 cities who participated in our joint purchase with 1,800 fixtures installed.
Now I know when you compare that with Boston it doesn't sound like a lot. But for our small farming communities in Iowa that is actual progress. We've actually purchased enough of these that we were able to get to the second price point for the fixtures which we had – we'd asked for several pricing points in our request for bids. It's worked out really well for us. That's the IMU part of the presentation and now I'll turn it back over to John. Thanks very much.
John Bilsten: Now I'd like to tell you a little bit about the Algona project. We installed 447 LED streetlights as part of this project. The luminaires were expected to result in an annual energy savings of approximately 234,000 kilowatt hours. That's about a 42 percent savings over the high pressure sodium lights that we already installed. It's been about a year now since we've had the installations in place and we are tracking very close to that estimate.
We're really excited that things have been working very well for us. And we're seeing those energy savings that we assumed. The life expectancy we assume is going to be greater than 20 years. And the project funds invested are expected to realize a simple payback well within the life of the fixture based on energy savings alone. And again that was one of our goals as you'll recall from an earlier slide.
To put all of this in perspective though I should let you know that those 447 LED lights represent about half of all of our street lighting in Algona. We, with this project, did all of our major street lighting, all of the major thoroughfares going through Algona. The luminaires are expected to yield significant annual operation and maintenance savings for us as one of the participating communities in the IMU project. And we're seeing that already with the lights that we've installed.
Here's a quick picture to show you a little bit of what Algona looked like prior to the LED street lighting project. You can see all of our high pressure sodium lights and you'll really focus on that center area which is our downtown corridor. After our lighting was completed you can see the significant difference on our main highways and roadways going through town. And in that downtown area you'll see one section, one street in particular, that's still very heavily lit with high pressure sodiums. That is because those are decorative lighting and we still have not determined the best way to go with LED lights in those decorative areas. We're working very closely with Mike Lambert and with some other folks in trying to get that issue solved.
A quick summary of our project: we had about $288,000.00 in cost. We purchased 447 lights. You can see the breakdown: 55 were 150 watt high pressure sodium equivalents, 28 were 250 watt and the bulk of that – 364 of the lights were the equivalent of 250 watt high pressure sodiums.
You can see ultimately there that we assumed a pay back or have a pay back of about 9.2 years. We think that is very achievable given the savings that we're already seeing. Just graphically you can see the difference here in the red of the high pressure sodium kilowatt hours of annual usage. And you can see in the blue the LED kilowatt hour annual usage on the top graph. The bottom graph shows the cost – the energy cost equivalent to those kilowatt hours. The red, again, being what we had before with high pressure sodium, and the blue being the LED annual energy costs. Again we're tracking very close to what we modeled this to be.
The key factors in our success, quickly, were support from the City Council and from the Board of Trustees. They were really willing to embrace change. For us, looking at 50 percent of our lights with one project was a pretty monumental shift in the way that we do things. There was a good knowledge of municipal energy consumption here and understanding what streetlights were as a percentage of our overall consumption.
And of course we had some requirements for our energy efficiency goals and energy efficiency projects that tied in nicely to changing out the street lights. And we also have a knowledge that the cost of avoiding a kilowatt hour is cheaper than the cost of producing a kilowatt hour. And we generate most of our electricity. The stimulus funding enabled Algona to take a small risk on new technology and that was really key. That paid for half of our project.
And we used a lighting designer, Mike Lambert, that we indicated earlier, to answer individual technical questions for both the group of other municipal utilities and for us, and really to take a look at our system and make sure that what we had planned was going to work. Ultimately the timing was right on for us because we saw a decreased price for LED luminaires and a large scale installation example in California helped us get a feel for what was being done in other parts of the country.
The technical background and integrity of the DOE resources really also helped, as Anne indicated earlier. With that I will turn it back over to Maggie.
Maggie Ullman: Hello everyone. My name is Maggie Ullman and I'm going to bring up my screen. Perfect. The warning I want to give: if anyone is considering going this direction you have to be warned that you too could turn into someone like me who ends up taking photos of streetlights on your honeymoon. It's infectious and it's exciting. But this might be your future. So you might just want to jump off the call now if you're not prepared for that. But in all seriousness what I would like to share today is our experience here in Asheville.
Why did we talk about streetlights and LED streetlights? The LED rates and how that impacts is a really important part of our conversation here in Asheville as a municipality. I want to talk a lot about the business case for LED's. And then I want to talk about our lessons learned.
To start off on the why are we talking about streetlights? I think it really roots for us in the leadership of our elected officials around sustainability. Back in 2007 we created a Citizen Sustainability Committee and we established the Office of Sustainability around that time. And the leading policy measure that really has focused us towards streetlights as one of the solutions is that we have a Carbon Footprint Reduction Policy. It's two percent per year. Later we adopted a Sustainability Master Plan to guide us towards that implementation.
And then after several years of implementation we were given the golden handcuffs of doubling the policy because we'd been doing so well. And then the last thing you see on that slide as I mentioned is that we created the Green Capital Improvement Program. That's what I want to talk a lot about in the business case. Our Green CIP as I call it is our funding mechanism that allowed us to use the savings from our streetlights to actually fund the streetlight investments.
Again, why streetlights? Why LED streetlights? Well what I'm showing you here is a picture of our carbon footprint analysis. Each of the bars represents a different fiscal year. And as you can see each of those categories is a section of our carbon footprint or our energy use. Our buildings and our fleet are a large part of that. Our water production facilities are also a large part of that. And the new streetlights hanging in there with a flat energy usage over time.
We kept looking at that section of the bar saying, "Hmm, how can we work with our utility? How can we move this forward so that we can start seeing the energy used from our streetlights decrease?" which is our overall policy goal. In order to really start focusing on streetlights we really needed to understand what our rate was and our relationship with our utility to see if there was any potential to move forward.
Here in Asheville we are served by Duke Energy Progress which is an investor-owned utility. And we have a great relationship with Duke Energy Progress. Part of our relationship is that we receive a flat streetlight rate per fixture and in that rate the utility provides the capital investment for the poles and the fixtures and the mounting. They provide us the energy and they provide us the maintenance. In the past we'd have this full service street lighting rate with all of those three categories. When we were looking at our energy usage from streetlights and wanting to move the needle on saving energy we were lucky to have a great relationship with that utility.
It happened to be at the same time they were evaluating their rates and looking for some choices to make them more innovative. We were able to work together to look at some new rates and get those approved by the Utility Commission. As you see on this slide there are two rate options that our power company now provides to us. One, on the left, is what we call the customer owned LED rate. And in the customer owned (and by customer in this case it's us, the city), the customer pays a flat rate per fixture.
The city purchases and owns the fixtures, which is the real difference. And then the utility installs these and does the maintenance. On the right you see the company owned LED rate which is very similar to the previous rate. There's a flat rate for each fixture. Utility purchases, installs, maintains, and owns. We ended up going with that choice on the left – this customer owned model. The negative of this is that we'd never been in the streetlight business before.
So having to purchase these fixtures outright was a new service conversation for us. But as you can see the pros, it was a really good financial option. It was the lowest rate and we've seen a five year return on investment. The pros of the company owned are that we would stay out of ownership. But the con is that it wasn't providing as much of a competitive rate for us financially. As you see with the star we were able to go into the streetlight, the LED streetlight conversation, because our utility provided us with an LED rate. And that rate made good business sense for us and aligned with our energy reduction and carbon reduction goals.
So once those rates were even on the table we still had to do a cost benefit analysis and really see, "Okay is this going to be a good return for us?" And what we've been able to assess is that the carbon reduction from going to LED streetlights would be a 6.2 overall reduction. As you remember, I mentioned earlier, our annual goal is a 4.0 percent goal. So that first return looked pretty darn good to us, to be able to achieve our policy goals pretty aggressively.
The project cost would be around $2 million. The total fixtures to replace are 8,000. Annual savings are around $400,000, energy savings 43 percent, and the ROI at about five years. As we went through this analysis to get each of these figures, this really created a strong triple bottom line case for us. It wasn't just a good decision for energy savings and for our environmental goals. This was also a strong financial decision for fiscal responsibility. And I'll talk later about the third part of the triple bottom line – the customer service element and providing for our citizens.
As far as the financial goal we need to be cash flow positive to make this work. What this image is showing you is just the conceptual model. I'll start on the left. On the left the cost before would've been the total cost we are paying for our rate to our utility. As we went into implementation that red bar that goes horizontally represents what we pay to the utility for that streetlight rate. The yellow represents the capital investment that we had to pull out of our pocket to buy the fixtures. And then the orange is that positive cash flow.
This model – those of you familiar with performance contracting would be very familiar with this. It's saying let's use that positive cash flow and the savings to pay for that project payment. Let's use the savings to pay for the investment. Let's look at that a little more in detail with our specific example in mind because I would bet that a lot of folks out there believe LED's are a great step forward but are saying, "I might not have grant money right now." Or, "The stimulus package is done. How can we make this work?"
To me the model that has worked for us I hope could work for others because it's a great financial model. So step one we borrowed the money. Step two is we put it into our Green Capital Improvement Program. And we borrowed to the tune of $2,000,000.00 to make this happen. Then we put that out. We did competitive bids to spend that money on the LED's. You see the LED installation happened. As I mentioned before the utility paid for the labor cost there.
We bought the fixtures and then set up a process so that they could access the fixtures and then go out into the field and install them. Over a 12-month period, because we have a different rate now, we were able to experience a $400,000 annual savings. In order to be able to pay back we take that $400,000, put the debt service on that loan is around $220,000 a year over a ten year loan period.
So we pay off our debt first and then we recycle that $180,000 savings to be reinvested back into our Green Capital Improvement Program to pay for additional energy saving programs like looking at fleet efficiencies for our vehicles and electric vehicle conversion or fuller installations on facilities. Not only have we been able to fund the entire 8,000 fixture city-wide retrofitted LED's, but this has become the funding source for our entire sustainability program.
I just explained at length the financial model. And one of the most interesting and fun parts of this project has been starting with the projections and really seeing it through to the point of seeing what the actuals are. When we started we were actually expecting to spend well over $2 million, probably about $2.5 million. But as we went through the purchase process that price of the technology has gone down so significantly. This chart is showing you that in the 18 months that we went through purchases we had three separate purchases.
We saw an average of 34 percent price drop in the three fixture types. To explain the chart specifically each color band represents a different fixture type that we're working with. And each time – as you can see – in February 2011 we bought a batch of around 750 fixtures. In April 2012 we bought around 3,500 fixtures. And then this past August we purchased another 4,000 or so. Over 18 months those are the price drops that we were able to get through competitive government bidding.
And it ultimately brought the entire return on investment of the entire project down by almost a year and a half – very significant. And I think if we track this another 18 months those lines are not going in a different direction. They're going to keep going down towards very, very competitive pricing.
Critical considerations I would put out if I was having coffee with any of you and you were asking, "What should I think about if I'm going to do this in my community?" Here are some of the ones that are really essential. If you're going to borrow – If you're a municipality and you're going to borrow, you're going to need to bundle the borrowing package with other projects because when we sat down to discuss this with the folks that we were looking to borrow money from, collateralization is an important conversation when you're borrowing money and we – they weren't able to come up with a way that they could collateralize the fixtures.
Having 8,000 assets is not something that the bank wants to use as collateral. So we needed to tie that in. The second is you need to really dedicate time to monitoring and verifying the savings so that your projections turn into actuals. If you're going to be borrowing funding and guaranteeing that you're going to pay for what you borrowed through the savings, you need to have someone really making sure that they're combing through all the data, they're combing through all the rates, they're combing through the timing and planning for it so that you don't end up with your projections being off.
Another thing you really need to think through is creating a long-term plan for managing the new capital. In Asheville's case, we've never been in the ownership of streetlights before. And so making sure that we have a really good handle on managing assets: when are their warranties up; where are we storing those fixtures; how are we connecting with our utility to ensure that when a fixture goes out or it needs to be replaced we can pass over our asset to them? That type of thing. You need to get into that new business and start planning for it.
And then the last one I'd put out is you need to dedicate time to customer service during the installation process. My colleagues in Algona talked a lot about the citizen element and it's really important. You need to make sure that the lighting is meeting the needs of your citizens. They're your number one customers of a municipal government. You want to make sure that you're expecting time for that and you put time towards it.
This next slide is showing you some information from our customer service experience. Again I mentioned we've installed 8,000 fixtures. To date we've had 120 complaints which is less than a percent of streetlight complaint rate. Of those 120, about 40 have resulted in us installing shields and about 20 we've removed those fixtures entirely. And the rest have really just been conversations where we've engaged and the citizens have gotten to the point where they aren't too worried.
The number one complaint – the number one complaint we get is that they are too bright. Brightness I think can be a subjective experience for the citizen. But it's really important to be sensitive to them and to listen and take it seriously. But that is definitely the number one thing we hear. Oh and the reason I put a chicken on this slide is because I'll share a brief anecdotal story. One of my most entertaining citizen requests is that I got a woman who called and said it was so bright in her yard that her chicken would no longer go to roost at night.
It was so bright the chicken didn't realize it was night time and wouldn't sleep. She was very concerned. We were able to work with her and her neighbors and remove that fixture. Her chicken is getting much better sleep now. But when you're doing customer service with citizens you hear from a lot of folks. The bottom line is you want plan for spending some time to tend to the concerns that you're going to hear.
This slide is showing you a photo. On the left is kind of the color scheme from the new LED's. On the right, of course that orange high pressure sodium. And one of the things that we did proactively as we anticipated concerns about light quality and color is that we were able to work with the utility to make sure that we had a 3,400 Kelvin color temperature as opposed to a 6,000 Kelvin color temperature. The 3,400 is a lot more clear, as opposed to maybe the blue color light that a lot of folks sometimes associate with LED's.
I think that was very beneficial. The other thing is that all of our LED fixtures comply with our dark sky ordinance concerns. We spent time with sensitivity to the citizens because it's their life. It's their community. We wanted to make sure that this wasn't just about energy savings or just about dollar savings. It really was about improving their experience. I'll head towards conclusion by sharing some outstanding challenges.
The first is that we really need a better shielding option. On the left I'm showing you a picture of old overhead fixtures where anyone out there who deals in street lights now knows that a lot of times you just get this aluminum shield and you swivel it around the entire fixture where you can really choose where you're blocking the light from or where you're redirecting the light to, whereas the picture on the bottom is showing you the shield option we have currently which has fins.
What's challenging for us, however, is we live in a mountainous community with winding streets in some places. So if you're – If the fixture is on a road that's up the hill and your house is on a steep ascent below that, that bottom shield solution doesn't help as much and/or if you're at the corner of a bend basically the shield options I'm seeing right now only provide support for one direction. So we need to keep working on that and I hope that on the call there are lots of manufacturers.
I know when I've talked with the manufacturers you all are really responsive to hearing the customer concern. But that's something we need to keep working on and I look forward to seeing more creative solutions from the engineers of the world. The other part is we need an easier field install for those tiny screws and tape and glue. We need to get it to a point that it is a very streamlined process for us to do out in the field. As I've mentioned we've only put up 40 or so shields. This isn't a dominating aspect of the retrofit but it's a huge part of customer services, which makes this a win/win.
If you're in a community where the energy savings isn't your leading question or your leading solution, making sure that we can deal with the customer complaints just makes it a lot easier. The second outstanding challenge area is really talking about the rates. There are going to be folks out there that are from the utilities. There are going to be folks out there on the call that are from municipalities. For us, the way that our relationship works with our utility, the rate was really what allowed us to go in this direction.
Things to think about is maximize government borrowing rates. Local government is going to get money – borrow money at a significantly cheaper rate than the private sector any time. That's something to really leverage when we're thinking about the best benefits for the rate pairs. And we need to make sure that we're reflecting the technology cost reductions in these rates. Technology as you saw – 34 percent price decrease over the 18 months that we went through purchases. The rates need to really reflect that technology is getting much cheaper.
And we also need to reflect the reduced maintenance costs. This one I wish I could speak to but our partner utility handles all the maintenance and the install so I don't have the data on that type of thing. But we know that with warranties that are going up to ten years and with the fixtures that are going to be lasting 20 years that the rates need to start reflecting those maintenance costs so that the rate payer is really experiencing the full benefit of what this wonderful technology can do for our community.
With that I'll conclude. My last slide has some contact information. I'm happy to handle any calls or questions that folks might have. Thanks for letting me share our experience with you all.
Edward Smalley: Thank you, Maggie. Now we'll turn this over to Mr. Glenn Cooper, City of Boston.
Glenn Cooper: We're here to talk about the LED program going on here in Boston. It's a real privilege to talk about it. This is the third year of our conversion and today we have over 26,000 units converted of the 64,000 lights we have here in Boston. Before we talk about the program, let's talk about where Boston was prior to the LED conversion.
Prior to the LED conversion, the City of Boston had in its inventory 64,000 streetlights; 42,000 streetlights that were mercury vapor and 22,000 lights that were high pressure sodium vapor. The streetlights accounted for 18 percent of the greenhouse gas emissions from the city's municipal operations. And we also spent $8 million for electricity as well as $1.3 million in gas. The funny thing about Boston is that we're one of the unique cities in the country that have gas lights on the streets.
We have approximately 2,800 of those, which makes our total inventory of approximately 67,000 streetlights. The last item on this slide we need to talk about is the NEPAct Act. This regulation phased out over time any type of lamps that are used, not just for the street lighting but your own homes as well. One of the major lights that were phased out was the mercury vapor street light. After December 31st of 2008, mercury vapor streetlight luminaires were no longer being manufactured in the United States. That created a dilemma for us and we had to find a solution to the problem. What were we going to do?
The opportunity presented itself to replace high pressure sodium vapor, mercury vapor, as well as a few incandescent lamps we have here in the City of Boston. The question was: with what? We decided to look into LED technology. Our first priority was the final solution for mercury vapor. As you view this slide you can see where this was the lowest hanging fruit that we could potentially save a substantial amount of money for the taxpayers.
The mercury vapor unit is the most inefficient of the HID family of lamps with both the energy consumption and the rate of luminance per watt, as well as lamp depreciation over the life on the lamp and the design of the luminaire itself. They're used to high light loss. The only other alternative is efficient. It has negligible light loss over its life, which is at the very least 60,000 hours compared to 24,000 hours for the mercury vapor streetlight.
One of the major benefits of an LED streetlight is its efficiency. Over 90 percent of the light emitted is utilized to light the roadway when compared to mercury or even sodium vapor streetlights. This enables us to use low wattage luminaires while still meeting or even exceeding RP-8, Illuminating Engineering Society's recommend lighting levels. A partnership with law enforcement was also critical for this program to be successful. We converted a street in Boston and had the police department brass there for a mock up.
They were very pleased with the results of our work with the LED lighting. They were especially pleased with the color rendering used in the LED streetlights, where this is very critical for any law enforcement agency when investigating crimes, when the color of a car of clothing comes into play. Neighborhood outreach was also critical before, during, and even after the conversion. We'll discuss that on the next slide.
Now we can discuss the program and how it evolved to where we are today. As I mentioned before, mercury vapor luminaires were phased out at the end of 2008. During calendar year 2009, we looked at different alternatives: metal halide, high pressure sodium, as well as induction lighting, for alternatives. At this time the LED lighting was on the back burner due to its high costs and because we were unsure as to its reliability. One of the LED program pilots we did install was in the Boston Common, with several different post top luminaires manufactured by several different manufacturers loaned to the city for demonstration purposes.
Each post top had its unique features which were rated by constituents walking along the pathway in the Boston Common. And the other location was a shopping center parking lot in the Jamaica Plain section of the city. The city solicited feedback through its website from residents asking for their own opinions as to the color, light intensity, and overall feeling people had with these LED lights. We also, through our Environmental and Energy Service Office, opened a dialog with the Clinton Climate Initiative as to how we light Boston today and how we should proceed going forward.
After extensive dialog and several cost models with the Clinton Climate group we chose to follow their recommendation to convert to LED lights. Although the initial cost of luminaire was higher, overall the city would be saving much more money in the long run if we converted to LED. Once we decided to go with LED, the city reached out throughout each neighborhood our intention to convert this city to LED. We demonstrated units at these meetings. It was well-received by the groups we met with.
Continuing on the timeline, during 2010 our energy provider stepped in and offered the city rebate money for each unit installed. The amount started at $200 per unit and reached the higher $300 per unit if we installed a certain number of units in the calendar year. Combine that with excellent pricing for bids that the city put out for equipment in 2009. The rebate not only covered the cost of luminaires but in some cases actually paid for the labor as well. This program was a win/win for the city and the story continues.
In 2010 the city installed 2,800 luminaires on residential streets in Brighton, Jamaica Plain, East Boston, and South Boston. They were well-received by the residents of the area. In 2011 the city went wide-scale with the conversion, installing an additional 12,000 units throughout the City of Boston. Not only residential streets were converted, but also in areas of public concern. In 2012 we completed the conversion of all of our existing cobrahead style luminaires, both mercury vapor as well as sodium vapor.
We began a conversion of our first decorative light, the acorn, as well as installing prototype units to replace our rectilinear shoebox units. This current year, 2013, we completed the conversion of our mercury vapor acorn fixtures, which totaled 3,000 in number, as well as started the conversion of the rectilinear luminaire. We also began the conversion of the 5,500 rectilinears. In 2014 we anticipate completion of the conversion of the 5,500 mercury vapor luminaires and begin the conversion of 4,500 high pressure sodium vapor rectilinear units on residential as well as arterial railways city wide and then begin the conversion of 5,800 high pressure sodium vapor acorns on our commercial roadways.
In 2015 we're going to begin and complete the conversion of all of our pendant style luminaires on commercial railways throughout the city. We're anticipating to have the city completely converted to LED by the end of calendar year 2015. We feel that it's kind of an ambitious goal to go for but if we're not ambitious we won't get the job done. Planning for the large-scale retrofit: one thing we did before we went to large-scale retrofit, we met with several LED luminaire manufacturers and went over every single aspect of what they had available.
Built to the right specifications, manufacturers' representatives know they can promise the world, but in real life we know it can be different. We took all the information from the representatives and developed specifications for the unit. Not having a unit in service we chose specifications with the following list from this slide. Obviously combined with existing units of service we had to be compatible with different mounting arms because when we bought the lights from the utility they had arms anywhere in the range of an inch and a quarter to three inches in diameter.
We definitely wanted ease of installation. We wanted them to be lightweight so that when the mechanics went up and did the job that they didn't get tired over a period of time. Energy efficiency was a big animal in there. And we specified companies that had to have a history of the development of manufactured LED units with at least five years minimum. The bids for the first unit went out and we got some excellent prices. The bids called out for units that were equivalent for mercury vapor that were being converted.
The units that we're converting to LED were 175, 250, and 400 watt mercury vapor units. We were very specific on the specifications and the one thing that was great that the pricing was very, very low. The units did meet the specification and did meet RP-8 for the road we were initially going to install for the units. The lessons learned from this initial bid in 2010 – the specifications had to be refined to be more detailed. We definitely had to utilize RP-8 guidelines to insure the streets are properly lighted based upon the roadway type, the pavement type, the luminaire height above the roadway, luminaire spacing, setback. We had to define the formula for RP-8 and we also had to define light loss factor. Fortunately we did not have to re-advertise the first batch. Two of three units on that bid did meet RP-8 guidelines for the streets that we intended on converting.
As LED technology took off so did our program. LED efficiency is lumens per watt. We're increasing steadily. Heat management was being addressed and we've definitely followed all the guidelines as you see below. Each unit had to be approved by the Design Lighting Consortium to be eligible for the utility rebate.
That was something in Massachusetts that NSTAR, National Grid, and the other utilities took into serious consideration. And the testing in situ was provided as positive bid to back up manufacturing claims of LED life. And one thing we did put in the specification was that the testing had to be performed by an independent testing lab, not by the manufacturer.
In 2012 we decided to do the conversion of the decorative mercury vapor street lights. And again we were very stringent on the specification that we put out on this. That was a very large scale. It took care of all the mercury vapor units in the historical south end and the Charlestown area. Again we had very stringent RP-8 guidelines, giving vendors specific details on the streets we lighted and the design was refined to eliminate light trespass which was – A big number of complaints that we did get initially on the LED conversion was from light trespass. The one thing we did on any future orders that we placed was to make sure that light trespass was held to the minimum.
And again the units had to be approved by the Design Lighting Consortium to be eligible for utility rebate. And we also limited the drive current on the decorative units to ensure long LED life. As you can see that is the prototype of the fixture that we have used in the City of Boston. The next phase in our LED program is going on even as we speak. It's the conversion of our existing mercury vapor rectilinear luminaire.
I don't know if it's clear in the pictures that everybody sees, but the picture on the left shows the old style rectilinear fixture. The picture on the right is the rectilinear replacement. This luminaire that is on the left was used extensively throughout the City of Boston over the past 30 years. It was modern looking at the time it was introduced. It was in favor for quite a long time. It was inexpensive and it was quite versatile. Recently though it's fallen out of favor and with the LED conversion taking place we found this was a great opportunity to make the change. With the support of the Mayor and all the residents in the area that we demonstrated this fixture to, it was chosen and many units were displayed and tested.
The next few slides are going to show some typical LED installations that we have here in Boston. The first one is over in Dorchester on Columbia Road and Annabel Street. The one thing you can see with these LED fixtures is the uniformity is excellent between the street lights. There is very little drop off in lighting between the two.
This is another example installation. This is in our Jamaica Plain section at Centre Street and Perkins Street. And the next picture that you see here is over in South Boston. This is on Dorchester Avenue where you have high pressure sodium vapor streetlights on the right and you have LED streetlights on the left. You can see quite a difference between the light.
Future considerations. The future, while unpredictable, is something we in street lighting always look at. With the growing popularity of cooperation between departments, we're starting to look at networking street lights that will allow public safety officials to increase lighting levels as they need. We're also looking at smart photocells that will report back to a central location when lights are out or have other issues that need to be addressed by the crews. This will increase efficiencies in the department by making calls only when necessary. The photocells would also have a long life which will the LED units again to decrease repeat calls from the same location.
Constant monitoring of chip development is also important. As development continues, and I think it's going to be going on for probably the next five to six years, we will modify our specifications accordingly to purchase the most cost-efficient, longest lasting units the city can purchase. This LED program has also had an environmental impact as well. As you can see by the charts the kilowatt hours used by the street lights has dropped by 5.1 million in 2011 compared to 2010 and projected to drop another 5.1 million in 2012 to 10.2 million kilowatt hours. So it's definitely making a big impact here in Boston.
Employment impacts. We also as part of this program have impacts not only locally but in certain regions where these LED units are manufactured. The units we've purchased thus far have been manufactured in Pennsylvania, Minnesota, and California. On the city side 16,000 work hours were utilized, estimated to be 19,000, which is pretty close to where it came in at the end of Phase I which is the cobrahead conversion.
And the installation was done by asking union members who are employees with the City of Boston. So it was all bought in-house. And it's been about 16 percent cheaper than to have private contractors come in. The union members have been integral in the installation thus far and actually are involved in making the units user friendly and to increase efficiencies in the installation of the unit. It's an all-in-one family, from the engineers, to the supervisors, to the inspectors, as well as the workers. We all work together to try to make this a positive program for the City of Boston.
Financial impacts. Just on the cobrahead installation alone shows that the materials were $6.8 million. We've projected the installation cost as $742,000; for the number of units installed: $23,000. NSTAR on their rebate incentive gave us $3.8 Million for the project. The City of Boston cost was the balance of $3.7 million whereas the actual energy savings on this program was $2.8 million, and we estimated annual maintenance savings of about $150,000.
So just based upon that the projects were self-paid in less than one and a half years. It's a win/win for everybody and that's something that we're carrying forward into our next set up. This is for the balance of the city owned streetlights that we have here in the City of Boston which is 38,000 lights. We're anticipating, again, that the program is to be completed at the end of 2015. And as you can look at the slide, the material is $18.8 million. Installation we're projecting at $1.8 million; 38,000 units to be installed. The annual kilowatt energy savings is 25 million kilowatt hours which is going to save the city $3.3 million per year as far as cost goes.
And again we're estimating annual maintenance savings at $500,000 a year. Whereas it's less than six years, which is great. It's not as great as the cobrahead installation, but still it's well within the life of the LED fixture. And that's my presentation for today. I appreciate the opportunity and I'll turn that back over to Ed.
Edward Smalley: Wonderful. Thank you very much Glenn, and also you, John and Maggie. We really appreciate the time, energy, and effort that you've put into these presentations. I think the three different perspectives helped us really get a good rounded view on what it takes to put on a streetlight conversion program for LEDs.