Chattanooga Mayor Andy Berke and the city council went down a dark alley last week in pulling back from a contract extension with Global Green Lighting for smart streetlights.
What once was touted as a money-saving and energy-saving plan to replace the city's inefficient streetlights with networked cutting-edge LED smart lights has now flickered out because the city, company and EPB can't get on the same page.
This is truly a shame, and a great loss for Chattanooga taxpayers. The lights would save nearly 70 percent of the electricity now used, and shrink maintenance costs. A third of the new lights are already are installed (Coolidge Park was the earliest pilot) and paid for. The entire replacement system for the city's 26,551 streetlights would have paid for itself in just 13 years.
What other city service or capital expenditure pays for itself -- ever?
But now this opportunity -- one that would have required a $12 million capital expenditure this year -- is gone, thanks to EPB's flawed record-keeping, city staffers' apparent inability to sit groups in a room and reach consensus, the mayor's apparent inability to grasp the concept of system change for anything other than City Hall housecleaning, the council's inability to stick to its guns in the face of mayoral lobbying, and Global Green Lighting CEO Don Lepard's somewhat understandable intolerance of delay after he had to lay off 50 workers when the city began slow-walking the second phase of the lighting installation.
To understand this story, some history is necessary.
In March, 2012, a previous city council and then-Mayor Ron Littlefield's administration signed a contract with Global Green to replace about a third of Chattanooga's streetlights for about $6 million. The council would have the option in coming years to approve replacement of the final two-thirds.
But as the first phase rolled out, the city-owned EPB and Global Green Lighting began to have problems. EPB sells electricity and maintains the streetlights. EPB's Harold DePriest says the city-owned distributor doesn't make any money on the streetlight electricity and instead that power is a "pass-through," meaning the city is billed only what EPB pays TVA for the power. But EPB doesn't meter the street light power use either. Instead, the city and EPB have a nearly $3 million yearly contract in which the city pays TVA's wholesale price for electricity, along with an EPB maintenance fee.
But the new lights meter themselves via the network. And the old mercury vapor lights and hydrogen sodium lights that are taken down were catalogued by Global Green as the new lights went up. Global Green found that EPB was charging the city top dollar for electricity that higher-wattage lights require even though some of the removed lights were lower-wattage.
At the same time, the new city administration was putting much more scrutiny on dollars, so in reviewing future expenditures the city asked EPB to provide numbers on what the new lights will cost. EPB did that using those inflated power-use figures and by providing simply wrong percentages of what EPB called "faulty" global green lights installed in the first phase.
The end result was that EPB's flawed numbers cast a poor light on Global Green and gave the appearance that the cost of replacing all the lights jumped to $27 million instead of the original estimate of about $20 million. Global Green, by the way, was, by virtue of savings and decreased maintenance, effectively cutting EPB's revenue from the city.
Global Green's Lepard challenged EPB's numbers and tried unsuccessfully to get the new city administration's attention about the flawed numbers. When that failed, he went to council members, and earlier this year, all nine members signed a letter demanding answers. Then the council decided to launch a city audit to settle the spat among EPB, Global Green Lighting and the Berke administration.
City Auditor Stan Sewell found that EPB did in fact have fuzzy maintenance figures. He found millions of dollars in ongoing charges and what he called a $5 million "billing discrepancy" by EPB were the primary drivers behind the climbing price of replacing the streetlights.
EPB's Depriest acknowledged that the billing numbers were wrong, but he says the city was not over-billed because the maintenance expense and the "stranded assets" cost of the still-working old lights make it "a wash."
But the bottom line is that none of those differences should have dismantled this deal. The right thing to do is to reduce energy consumption. The right thing to do is to invest in better, smarter, safer lighting -- especially when it pays for itself in slightly more than a decade. The right thing to do is to honor our city's commitment to a man who pioneered these lights, offered to help Chattanooga make its environmentally conscious name along with his, and brought his company from China to Chattanooga, initially hiring 50 workers and planning to hire 150 when sales grew here and in other cities.
Instead, no leader stepped forward to bind these partners.
Berke and his administration have said it makes more sense to just replace lights as they burn out. But in this networked system, it doesn't. EPB is now able to get our power back on quickly in storms because of its similarly networked smart grid. Doing the lights piecemeal negates the technical innovations and savings that they offer.
Berke persuaded the council to go along with him by telling them that a $12 million dollar hit to the more than $30 million capital budget would be too high -- especially while we wait on a Volkswagen expansion announcement.
But that argument doesn't hold water either. The capital budget figure is Berke's figure. So the Berke folks either didn't do their homework about what would be needed to cover both, or they didn't intend to follow through with the lights in the first place.
Meanwhile, it looks like we've all been left in the dark.