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) pooled the decision making and purchasing power of 35 municipalities so that they could confidently and cost effectively access energy performance contracting, finance, and technical assistance to convert their entire street lighting systems to LED. Participants benefitted from reduced product and labor pricing, a common step-by-step program timeline and process, and technical and legal assistance in designing and implementing their projects. Program partners include the Pennsylvania Sustainable Energy Finance (PennSEF) program developed for the Pennsylvania State Treasury by the Foundation for Renewable Energy and Environment (FREE), and Keystone Lighting Solutions based in State College, PA.
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 “preliminary” 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;
- if requested, 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;
- many municipalities paid using internal funds for their project instead of accessing financing.
- 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.
- Project estimates show that:
- 35 municipalities proceed with a guaranteed savings agreement with JCI, while the remaining ten are likely to retrofit their outdoor area lighting to LED over time;
- More than 26,000 LED outdoor lighting fixtures will be installed throughout the region in 2017;
- Together, these municipalities will save 10,600 megawatt hours, 5,500 metric tons of CO2 emissions, and $900,000 annually in energy and operational costs. $16 million net savings over 20 years.
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.