Chattanooga City Council punts on millions in EPB overbilling

Chattanooga City Council punts on millions in EPB overbilling

April 30th, 2014 by Joy Lukachick Smith and Ellis Smith in Local Regional News

Zach Smith assembles the wiring for a LED streetlight at Global Green Lighting's facility.

Photo by Staff File Photo/Times Free Press.

A light fixture lies on the counter at Global Green Lighting.

Photo by Angela Lewis Foster/Times Free Press.

The City Council on Tuesday brushed off warnings that city-owned utility EPB may have overbilled Chattanooga taxpayers for millions of dollars in electricity that was never consumed.

Following a attorney-client privileged meeting that excluded members of the public, council members postponed for two weeks any decision or discussion of the city's 27,000-streetlight replacement program, which city auditor Stan Sewell revealed has been tainted by erroneous bills from EPB.

Sewell found that while EPB through the years has replaced many of its high-wattage mercury vapor lights with lower-wattage high-pressure sodium lights, taxpayers were still paying millions of dollars in higher electric bills for lights that were no longer on the poles.

"As they replaced the mercury vapor lights, that was not reflected in the flat-rate billing," Sewell said Tuesday.

Such billing discrepancies, which would have added up to $5 million over the course of the city's $24 million LED streetlight replacement program, have been ongoing for many years. However, it's difficult to know exactly how long without digging deeper, Sewell said.

"It would require going back through every record," Sewell said.

But new City Council Chairman Chip Henderson, along with much of the rest of the council, dismissed the idea that the City Council or Sewell should investigate further, saying the council had too much on its plate.

That plate is mostly occupied with the weighty decision of whether or not to continue the city's contract with Global Green Lighting, which is set to replace EPB as the city's lighting provider.

"Sometimes I relate it to shooting at deer," Henderson said. "Most of the time when people miss, it's because they're looking at the whole deer. You've got to focus on just the part of the deer you want to hit."

The streetlight replacement project has been delayed for months by conflicting reports from EPB and Global Green Lighting, as the city attempted to justify what was previously thought to be a $27.5 million price tag to replace its street lamps.

City Councilman Ken Smith said looking into 20 years of EPB bills would just exacerbate the situation.

"It's taken long enough, I don't want to continue to delay it," Smith said.

EPB spokesman John Pless said that the utility actually discovered and corrected the billing discrepancy last year, and that any errors on energy bills would have been balanced out by the increased cost of the lower-wattage lights.

"There was an over billing for energy used by some street lights, that was offset by under billing for facilities charges," Pless said. "City officials were aware of this correction last year."

That's news to Don Lepard, founder of Global Green Lighting, who says he reported the discrepancy when coming through the records to calculate the savings generated by his LED streetlights.

He met with EPB in August about the issue, and was assured it would be fixed with the city, he said. But in October, he found that Chattanooga Mayor Andy Berke's streetlight evaluation team was still using the old numbers.

"We discovered a 20-year-old billing discrepancy and we reported it," Lepard said. "Now, I'm worried it's going to be used against us."

That's because while the corrected lighting bills from EPB will save millions of dollars in taxpayer dollars, they also reduce the projected cost savings from using Lepard's LED lights.

Those questions and others were avoided on Tuesday, as the council pushed off any discussion of the streetlight replacement program for at least two weeks, waiting to bring up the issue until after three days Berke is scheduled to make his own recommendation on May 10.

Councilman Larry Grohn justified the latest in a series of delays, claiming the council and the public needed more time to consider Sewell's report. The council also must weigh its legal options in light of the fact that it may sue or be sued by other parties in the debate.

"I don't think we had the time to ask intelligent questions," Grohn said. "If there is the possibility of a lawsuit, shouldn't we take the time to ask the right questions?"

Contact Ellis Smith at esmith@timesfreepress.com or 423-757-6315.

Contact Joy Lukachick at jlukachick@timesfreepress.com or 423-757-6659.