Regional Streetlight Procurement Program
LED streetlights, traffic signals, and exterior lighting present an excellent opportunity for municipalities to reduce energy use and operating costs while improving public safety. LED lighting has matured over the past five years into a reliable, high-quality product that has dropped significantly in price.
DVRPC’s Regional Street Lighting Procurement Program (RSLPP) assembles the resources needed to design, procure, and finance the transition to LED street lighting and other outdoor lighting needs tailored to each municipality’s specific needs. The program pools the buying power of participating municipalities, which means that the lighting fixtures and installation costs will be procured at a price below that which would be available to any one municipality. Further, the pooling of projects enables the RSLPP to leverage low-interest energy-efficiency financing from the Pennsylvania Sustainable Energy Finance (PennSEF) program developed for the Pennsylvania State Treasury by the Foundation for Renewable Energy and Environment (FREE). The PennSEF program facilitates the cost-effective and technically sound advancement of energy performance contracting for municipalities, schools, and other governmental units, as well as for non-profit organizations. The energy performance contracts developed through this program must provide an energy savings guarantee whereby the energy cost savings will exceed the financing costs for each participant. In addition to significant energy cost savings, municipalities that retrofit to LEDs will also see significant operational and maintenance savings due to the longer life spans of LED lamps.
Regional Streetlight Procurement Program in detail
- In October 2015, DVRPC developed a RFP on behalf of 45 municipal governments [pdf] who expressed interest in participating in round one of the RSLPP. This RFP competitively selected a single Energy Services Company (ESCO), Johnson Controls Inc (JCI). Each of the ESCOs that submitted proposals had been pre-qualified by the PennSEF program. The RFP also rigorously vetted each ESCO on pricing, design, and overall approach, and also included a technically-sound specification for streetlights, which allowed the program to lock-in pricing for much of the program.
- DVRPC worked closely with the PennSEF team and technical consultant, Keystone Lighting Solutions to provide oversight of JCI throughout this process to ensure that they were providing transparent, clear, and cost-effective solutions in the Energy Performance Contracts developed for each municipality.
- JCI provided each participating municipality with a free pre-contract audit that included an estimate of savings available through an LED conversion project.
- Municipalities satisfied with the pre-contract audit entered into a Guaranteed Energy Savings Agreement (GESA) with the selected ESCO. The GESA provided:
- an investment grade audit of the LED lighting retrofit that will demonstrate at least 90 percent of the savings identified in the pre-contract audit;
- highest quality LED fixtures at a price lowered due to the bulk purchase;
- a guarantee of energy cost savings (additional savings will also be realized through operational and maintenance savings achieved throughout the life of the project);
- measurement and verification of energy savings achieved as a result of the project;
- long-term, low-interest rate financing that is subject to appropriations and will not increase municipal debt (the financing will be self-funded through energy savings);
- unbiased technical support throughout the project by a competitively-selected third-party consultant as part of the program;
- Municipalities that enter into a Guaranteed Energy Savings Agreement with an ESCO will finance the project through a lease agreement with the PA Economic Development Finance Authority (PEDFA). The GESA guarantees that the energy cost savings achieved through the project will exceed lease payments.
- Preliminary project estimates show that:
- 36 municipalities are likely to proceed with construction at this time. Eight of these participants are planning to retrofit their outdoor area lighting to LED over time;
- More than 25,000 LED outdoor lighting fixtures will be installed throughout the region in 2017;
- Altogether, participating municipalities will save nearly $800,000 as a result of this project.
If you are interested in participating in round 2 of the RSLPP, or for more information about the program, please contact Liz Compitello, Senior Research Analyst, at DVRPC: email@example.com, or 215-238-2897.