9 Resolution Entering into the Agreements with PG&E Streetlight Turnkey Program and Authorizing the City Manager to Execute Agreement Documents

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Meeting Date: June 20, 2017

 

STAFF REPORT

AGENDA ITEM: Resolution Entering into the Agreements with PG&E Streetlight Turnkey Program and Authorizing the City Manager to Execute the Agreement Documents.

MEETING DATE: June 20, 2017

PREPARED BY: Jose Antonio Ramirez, City Manager

REVIEWED BY: Jose Antonio Ramirez, City Manager

RECOMMENDATION:

City Council to adopt Resolution No. 2017-_, to apply for the Financing Supplement to the On-Bill Financing Program Application, enter into the PG&E Services Agreement, enter into the On-Bill Financing Loan Agreement, and enter into the PG&E Proposal Number 1 in PG&E’s Streetlight Turnkey Program and authorizes the City Manager to execute the Application, Agreement, and Proposal Documents.

BACKGROUND:

The City of Livingston spends approximately $988,000 on electricity for its street lighting system annually. This expense provides lighting to 687 streetlights throughout the City (PG&E & MID). The lighting system includes a variety of light fixtures, but the largest percentage is High Pressure Sodium (HPS), which has been the standard for many years.

DISCUSSION:

In recent years, Light Emitting Diode (LED) streetlight technology has entered into the mainstream of use, is readily available and highly tested. PG&E has established a streetlight replacement program for its commercial customers. The program is called “PG&E LED Streetlight Turnkey Replacement Service.” The program provides replacement of existing inefficient HPS with new efficient LED Streetlights. The cost for parts and installation to the City are paid for by the City from the actual energy savings realized from the replacement on a 0% loan.

An example of the energy savings for a project replacing 98 streetlights:

Total Project Price:   $44,096

Total PG&E Rebates: $ 4,450

Net Estimated Price: $39,646

Debt to City after 67 months from PG&E with a 0% loan: $ 0

Estimated energy cost savings in First Year: $ 7,099

Additional savings in the maintenance funds, not included in examples above, occur since LED lights require less routine maintenance.

The process for receiving the Turnkey Replacement Service from PG&E starts with an On-Bill Financing Program Application with Financial Supplement and a Service Agreement. Once the Financial Supplement to the On-Bill Financing Program Application and the Service Agreement has been executed, PG&E submits the On-Bill Financing Loan Agreement for processing. Simultaneously, a file study is initiated by PG&E to verify the inventory of the City streetlights and identify the least efficient streetlights for replacement. The City Street Light Inventory tracks 687 streetlights.

PG&E owned and maintained – LS1  269 street lights

City owned and maintained – LS2    153 street lights

MID owned and maintained             265 street lights

Total Street Lights                        687 street lights

The Final “Proposal” identifies the exact number of streetlights to be replaced and becomes an attachment to the Service Agreement. PG&E selects a pre-qualified contractor to perform the work replacing old HPS lights with the new LED lights. PG&E pays the contractor for the work, disposes of the old lights/fixtures, and establishes the new rate billing system for the LED lights. The monthly PG&E electric bill amount for streetlights will remain the same. The difference being the City’s energy bill will reflect a reduction in energy consumption and a payment to the On-Bill Financing loan. When the 0% interest loan has been repaid, the monthly PG&E electric bill to the City for streetlights will be realized.

Converting the most inefficient streetlights, throughout the City, to LED technology will produce economic, environmental, and social benefits starting the moment each light is replaced. The City is transitioning its streetlight design to LED street lighting for development. A new standard will be drafted for inclusion into the City’s Improvement Standards and Specifications. The economic benefit of LED technology will include a reduction in energy use, thus decreasing the expenditure in the City’s electric bill.

FISCAL IMPACT:

The PG&E Streetlight Turnkey Program allows for a seamless solution to budgeting when implementing the program. The goal of the program is to use the money saved from reduced energy consumption and operational maintenance costs. These savings, over the five to seven years (up to ten years maximum), Pays the debt service for the purchase of the new LED streetlights and the contractor services to install the new streetlights. The repayment of costs to replace the HPS streetlights with LED streetlights is calculated over a five to seven year period. In essence, the PG&E electrical bill for the streetlights remains the same during the repayment period. At the conclusion of the repayment for the replacement project, the City will begin realizing the savings in budget reductions for the electrical bill. Using the current rebate schedule, the energy savings is estimated at $7,099 annually after the On-Bill Financing loan is repaid.

ATTACHMENTS:

1. Resolution No. 2017-

2. PG&E Proposal Number 1

3. PG&E LED Street Light Turnkey Replacement Service

RESOLUTION NO. 2017-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LIVINGSTON ENTERING INTO THE AGREEMENTS WITH PG&E STREETLIGHT TURNKEY PROGRAM AND AUTHORIZING THE CITY MANAGER

TO EXECTUTE AGREEMENT DOCUMENTS

WHEREAS, the City of Livingston spends approximately $988,000 annually on electricity for its street lighting system on 687 street lights throughout the City; and

WHEREAS, the largest percentage of street lights currently in use are the inefficient High Pressure Sodium lighting; and

WHEREAS, Light Emitting Diode street light technology has entered into the mainstream of use, is readily available, and highly tested; and

WHEREAS, PG&E is offering municipalities a “no interest” loan to replace inefficient street lighting with Light Emitting Diode street lighting through their Turnkey Replacement Program; and

WHEREAS, the energy billing saving realized from replacement installation expenses will be allocated towards the replacement installation costs over a qualifying time period.

NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Livingston does hereby approve applying for the Financial Supplement to the On-Bill Financing Program Application, entering into the PG&E Services Agreement, entering into the On-Bill Financing Loan Agreement, and entering into the PG&E Proposal Number 1 in PG&E’s Streetlight Turnkey Program and authorizes the City Manager to execute the Application Agreement, and Proposal Documents.

Passed and adopted this 20th day of June, 2017, by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

Jim Soria, Mayor

of the City of Livingston

ATTEST:

I, hereby certify, that the foregoing resolution was regularly introduced, passed and adopted at a Regular Meeting of the City Council of the City of Livingston this 20th day of June, 2017.

 
 

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Antonio Silva, City Clerk of the City of Livingston