SR - AGR-6401 - RETROFIT CITY STREETLIGHTS TO LED FIXTURES1. SUBJECT
Award contract to retrofit approximately 2,503 City streetlights to light emitting diode (LED)
fixtures and approve the use of On -Bill Financing (OBF) through Southern California Edison
(SCE).
2. SUMMARY
The City has enrolled with The Energy Network to take advantage of the no -cost services
provided by their program. The Energy Network evaluates projects for energy efficiency and
assists jurisdictions with the completion of these projects. One project is the retrofit of
approximately 2,503 City streetlights and intersection lights to energy efficient and cost effective
LED fixtures. By implementing this project, the City will realize an annual savings of $110,000
in reduced electrical costs to power the LED fixtures and a decrease in streetlight maintenance
costs.
3. RECOMMENDED ACTION
1. Appropriate $980,000 from Fund 550 to project account number 550.5011.56330.30089 LED
Streetlight Conversion.
2. Award the contract in the amount of $958,186 to Express Energy Services, Inc. (Express
Energy), and authorize the Mayor and City Clerk to execute the documents on behalf of the
City.
4. FISCAL IMPACT
After appropriation, funding will be available in the following account:
550.5011.56330.30089 LED Streetlight Conversion $980,000
5. STRATEGIC PLAN GOAL(S)
2d. Be fiscally healthy community — Effectively manage and develop City assets.
3e. Enhance and promote quality of life in the community — Develop and strengthen
collaborative partnerships to enhance and promote quality of life programs, projects and services.
ITEM 3 .1 3 1 10/11/16
4b. Provide outstanding public service — Provide facilities and services to meet customer
expectations.
6. GENERAL PLAN IMPLEMENTATION
Natural Resources Element Goal 2.0 Protect air, water and energy resources from pollution and
overuse.
Policy 2.9 — Promote City operations as a model for energy efficiency and green building.
Natural Resources Element Goal 3.0 Prepare for and adapt to the effects of climate change and
promote practices that decrease the City's contribution to climate change.
7. DISCUSSION and BACKGROUND
The City's street lighting network consists of a mix of City street lights and SCE street lights.
There are a total of 8,812 street lights in the City with 3,113 City -owned and 5,699 SCE - owned.
Energy usage and costs from existing street light operations are approximately 5,400,000 kWh
per year and $1.11 million per year. The Energy Network is recommending an estimated 2,503
qualifying city -owned lights for retrofit. No decorative streetlights have been identified for
retrofit as part of this project.
Currently, the City is a participating member in the North Orange County Cities (NOCC) Energy
Partnership with SCE and Southern California Gas (Resolution No. 10878). As a member, the
City receives additional rebates /incentives on energy efficiency projects above and beyond the
standard rebates /incentives available to the general public. The City will leverage these rebates/
incentives to maximize the savings to the City. The rebates /incentive program has a tier system.
The first phase of the street light project along with a few other measures could move the City up
the tier structure, ultimately resulting in additional savings for future energy efficiency projects.
The Energy Network was created to help public agencies identify and implement energy
efficiency projects. More specifically, the program was designed to help agencies overcome the
barriers to implementation that they typically face with projects, including staff time, funding
and procurement. The program is administered by the County of Los Angeles and funded by
California utility ratepayers under the authority of the California Public Utilities Commission.
Instead of using the traditional design bid -build delivery method, staff determined that it would
be more efficient and economical for the City to utilize its National Joint Powers Alliance
(NJPA) membership and take advantage of the national cooperative contract purchasing program
to complete this project. Since all NJPA contracts are competitively bid nationally and vendors
are pre - qualified by knowledgeable committees with expertise in those trades, the City benefits
from the reduced pricing made possible by large volume national contracts.
Staff solicited cost proposals for this LED retrofit project through the NJPA cooperative contract
purchasing program. One cost proposal in the amount of $958,186 has been received from
Express Energy and Public Works is recommending to award the contract to Express Energy.
To fund the project, Public Works recently applied for SCE energy efficiency incentives /rebates
and has received acknowledgement that the City will be awarded an estimated $395,713. Public
Works has also secured $562,472 in zero - percent OBF to fund this Streetlight LED retrofit
project. The zero - percent OBF will be paid by future savings in electrical costs of over $110,000
ITEM 2 10/11/16
per year. The total payback period is estimated to be 6.5 years. The estimated net total saving in
15 years is $1,090,000 to the City's General Fund through the 550 Reimbursable Account. In
addition, the project will also generate an estimated $20,000 per year savings in maintenance
cost.
The conversion of the existing City streetlights to LED fixtures will provide a multitude of
benefits to the City, including:
• Reducing the cost to maintain streetlights
• Capturing $395,713 in utility incentives
• Reducing greenhouse emissions equal to removing 2,535 vehicles off the road; and
• Decreasing the effect of future utility costs increases on the General Fund
The total project cost for the conversion of City streetlights to LED fixtures is estimated at
$980,000 including approximately $22,000 contingency and will initially require an allocation
from the General Fund. SCE will provide an estimated $395,713 in incentives as reimbursement
to the City once the installation is completed. This is approximately 41.3% of the total cost.
The remaining 58.7% of the costs, estimated to be $562,472, will be funded through OBF. SCE's
OBF program allows public agencies to finance energy efficient projects with zero - interest and
pay the loan back as part of their utility bill. Other local agencies such as the Cities of
Huntington Beach and Costa Mesa have successfully implemented energy saving projects
utilizing OBF. With OBF, the City will receive a reimbursement check from SCE estimated at
$562,472 upon project completion. The OBF will be repaid by savings on the City's streetlight
utility bill over a period of 6.5 years.
The LED light in general is brighter than the high - pressure sodium lamp, so staff will conduct
public outreach through city website, social media, and project flyers. A number of glare shields
have been ordered to prevent light spillage into homes. Although LED lighting is an energy -
efficient way to illuminate streets, it's important to direct the light only where it's needed to
support visibility and safety.
On a related note, Public Works staff is also working with SCE in analyzing the potential
purchase of SCE -owned street lights. SCE has provided the City a valuation price of $1,458,876
for 4,359 SCE owned streetlights. Public Works is in the process of performing the necessary
financial analysis and will come back in the future with a presentation/recommendation on
whether to acquire those SCE owned streetlights. The potential purchase would give the City
more control of energy costs and produce more energy savings by converting those additional
lights to LED.
8. ATTACHMENTS
• SCE On -Bill Financing (OBF) secured letter (on file with City Clerk)
• Contract Agreement
CITY COUNCIL MINUTES OCTOBER 11, 2016
3. CONSENT CALENDAR (Continued)
CONTRACTS
3.13 Award contract to retrofit approximately 2,503 City streetlights to light emitting
diode (LED) fixtures and approve the use of On -Bill Financing (OBF) through
Southern California Edison (SCE). (A2100.0; AGR 6401)
ACTION: 1) Appropriated $980,000 from Fund 550 to project account number
550.5011.56330.30089 LED Streetlight Conversion; and 2) Awarded the contract in the
amount of $958,186 to Express Energy Services, Inc. (Express Energy), and authorized the
Mayor and City Clerk to execute the documents on behalf of the City.
GRANTS
3.14 Fiscal Year 2016 (FY16) Edward Byrne Memorial Justice Assistance Grant (JAG)
from the U.S. Department of Justice (DOJ) for the purchase of a Night Vision Optic
device. (A2100.0 Agr- 4654.K)
ACTION: 1) Approved the 2016 JAG Agreement between the County of Orange and the
City of Orange in an amount not to exceed $11,311, including the allocation to the County;
2) Authorized the City Manager or his designee to execute the agreement on behalf of the
City; 3) Accepted into the City's revenue budget a $10,293.01 grant from the County of
Orange, into revenue account number 353.4011.45150.30087, Federal Grants -2016 JAG;
4) Authorized the appropriation of $10,293.01 into expenditure account number
353.4011.55131.30087, Federal Grants - Equipment -2016 JAG; 5) Authorized the
appropriation of $424.68 from the Federal Asset Forfeiture (355) unreserved fund balance
to expenditure account 355.4011.55131.30087, Federal Asset Forfeiture 2016 JAG; and 6)
Approved the purchase of the Night Vision Optic device from IOV Group LLC in the
amount of $10,718.
PURCHASES
3.15 Purchase of window shades from Expert Window Coverings, Inc. for the Orange
Police Department. (C2500.K)
ACTION: 1) Approved the purchase of window shades from Expert Window Coverings,
Inc. in an amount not to exceed $29,900; and 2) Authorized the appropriation of $29,900
from the Police Facility (570) unreserved fund balance to expenditure account number
570.4011.51401.00000, Police Facility Fees — Contractual Services.
RESOLUTIONS
3.16 RESOLUTION NO. 10960 (C2500.J.4)
A Resolution of the City Council of the City of Orange regarding the 2016 Christmas
Holiday Closure.
ACTION: Approved.
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