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Authorize the Town Manager to Enter into an Agreement with Duke Energy to Convert All Chapel Hill Street Lights to Energy-Saving LED Fixtures.
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Staff: |
Department: |
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Lance Norris, Director |
Public Works |
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Kumar Neppalli, Traffic Engineering Manager |
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John Richardson, Community Resilience Officer |
Manager’s Office |
Overview: Duke Energy owns and operates 3,605 street lights in Chapel Hill through an agreement with the Town. About 10% (376) of those street lights are currently energy-saving LED (light emitting diode) fixtures. We estimate that by converting the remainder of our street lights to LEDs, we would reduce annual greenhouse gas emissions more than 830 metric tons. This represents an estimated 5.5% emissions reduction from Town operations, equivalent to the amount of electricity consumed by 140 homes in a year.
Staff developed two options for the Council to consider. While they are on different timelines, both options provide uniform lighting color throughout the town, enhance visibility for community safety, save energy, reduce greenhouse gas emissions and minimize waste from lighting maintenance. Staff recommends Option A because this allows for a faster transition of all street lights to LED fixtures and thereby helps to address the urgency of climate change.
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Recommendation(s): |
That the Council adopt a resolution authorizing the Town Manager to execute an agreement with Duke Energy to convert all street lights in Chapel Hill to energy-saving LED light fixtures under Option A.
Decision Points:
• Should the Town begin the street light conversion this fiscal year or wait until next fiscal year to consider budgeting for the full conversion cost related to decorative fixtures? See the Technical Memorandum for a discussion and possible options related to this question.
Fiscal Impact/Resources: See Technical Memorandum.
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Attachments: |
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• Technical Memorandum |
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• Resolution |
Technical Memorandum September 19, 2019
Prepared by Town Staff from Public Works and the Manager’s Office
When new street lights are needed, we ask Duke Energy to install LEDs. LEDs are just one of four types of street lights in Chapel Hill (see table below). If a Mercury Vapor light burns out, Duke will replace it with an LED. While these changes help, more action is needed in order to convert all street lighting to LEDs.
The information below provides more details about existing street lights, the energy saving/emissions reduction potential from a full conversion to LEDs, and the cost considerations and options associated with such a change.
Today’s Street light Counts
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Street light Type |
Count |
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Mercury Vapor |
500 |
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High Pressure Sodium |
2,577 |
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Metal Halide |
152 |
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LED |
376 |
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Total |
3,605 |
Energy and Emissions Reduction Breakdown
Full conversion to LEDs will reduce energy consumption and carbon emissions associated with street lighting by 53%. For the Town operations as a whole, this project would reduce total emissions by an estimated 5.5% per year.
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Category |
Today |
Post LED Installation |
Change |
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Fixture Wattage |
582,690 Watts |
313,110 Watts |
-269,580 Watts |
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Energy Usage/Month |
209, 768 kWh |
112,720 kWh |
-97,048 kWh |
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Energy Usage/Year |
2,552,182 kWh |
1,371,422 kWh |
-1,180,760 kWh |
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Carbon Reduction |
1,805 metric tons |
970 metric tons |
-835 metric tons |
LED Conversion Costs
Converting our street lights to LEDs comes with three sets of costs:
• Increased monthly street light bills (service rate and fees)
• Hardware transition cost for standard street lights ($153,690*)
• Hardware transition cost for decorative street lights ($365,234*)
*Rounded to the nearest dollar for the purposes of this memorandum
The monthly street light bill is the Town’s ongoing payments for electricity, maintenance and decorative street light fees. The hardware transition costs are the payments that Duke Energy requires in order to physically replace the existing street lights with new LED fixtures.
By converting to LED, Duke Energy has confirmed that the change to the monthly bill would be as follows:
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Monthly Rate and Fee Type |
Today’s Rates |
New LED Rates |
Change |
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Base Rate |
$28,482 |
$28,528 |
$46 |
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Decorative Light Fee |
$2,034 |
$5,085 |
$3,051 |
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Other Charges |
$2,865 |
$2,865 |
-- |
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Monthly Total |
$33,381 |
$36,478 |
$3,097 |
Duke Energy has also confirmed that the options for each hardware transition cost are as follows:
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Cost Type |
Payment Options |
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Standard Street Light Hardware Transition Cost ($153,690) |
Pay up front or pay in equal annual installments over 4 years |
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Decorative Street Light Hardware Transition Cost ($365,234) |
Pay up front or pay as part of the monthly street light bill for as long as the lights are in place, raising the monthly bill from $36,478 to $38,788 per month |
The current street light budget is sufficient to cover either of the monthly bill increase scenarios shown above ($36,478 and $38,788). It is also sufficient to cover the hardware transition cost for standard street lights if that amount is paid in equal annual installments over four years. The budget is not large enough to pay for the full hardware transition cost for decorative street lights.
LED Conversion Options
The options below are different in terms of the installation timing and costs associated with decorative street lights only.
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Option Details |
Option A |
Option B |
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Standard Street Light Installation Begins |
January 2020 |
January 2020 |
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Decorative Street Light Installation Begins |
March 2020 |
TBD |
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Hardware Transition Cost for Standard Street Lights |
$153,690 (paid in equal annual installments over 4 years) |
$153,690 (paid in equal annual installments over 4 years) |
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Hardware Transition Cost for Decorative Street Lights |
$5,407 (added to monthly street light bill because funds not available for full cost)** |
$365,234 (Council considers budgeting for one-time payment in future fiscal year) |
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Pros |
Maximum energy savings and carbon reduction begin in FY19-20 |
Town avoids ongoing monthly $5,407 decorative transition cost |
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Cons |
Added monthly decorative fees are ongoing and do not count towards the full hardware transition cost of $365,234 |
Carbon savings from decorative lighting is delayed indefinitely; only 2/3 of all street lighting is uniform until decorative LEDs are installed |
**As part of Option A, the staff recommends that the Council consider budgeting for the full $365,234 hardware transition cost for decorative lighting in FY20-21 to avoid paying the monthly decorative light fees in perpetuity. This cost savings represents $2,310 per month, which equals the monthly bill increase from $36,478 to $38,788. Another way to think about this is that in 13.17 years, the Town will have paid $365,234 in monthly fees for new LED decorative street lights. Every month after this point will represent ongoing fees that could otherwise be avoided by making the one-time lump sum payment of $365,234.
Staff Recommendation
That the Council authorize the Town Manager to execute an agreement with Duke Energy to convert all street lights in Chapel Hill to energy-saving LED light fixtures under Option A.
Although they are on different timelines, both of the options above will provide uniform lighting color throughout the town, enhance visibility for community safety, save energy, reduce greenhouse gas emissions and minimize waste from lighting maintenance. Staff recommends Option A because this allows for a faster transition of all street lights to LED fixtures and thereby helps to address the urgency of climate change.
A RESOLUTION AUTHORIZING THE TOWN MANAGER TO ENTER INTO AN AGREEMENT WITH DUKE ENERGY TO CONVERT ALL CHAPEL HILL STREET LIGHTS TO ENERGY-SAVING LED FIXTURES (2019-09-25/R-10)
WHEREAS, the Town Council is committed to upholding the Paris Climate Agreement and reducing greenhouse gas emissions in order to help mitigate the effects of climate change; and
WHEREAS, Duke Energy owns and operates 3,605 street lights in Chapel Hill and provides this service by way of an agreement with the Town; and
WHEREAS, 376 or 10% of these total street lights are energy-saving LEDs (light emitting diodes); and
WHEREAS, the conversion of all remaining street lights to LEDs could result in an annual greenhouse gas emissions reduction of over 830 metric tons; and
WHEREAS, full conversion represents a 5.5% emissions reduction from Town operations and is equivalent to saving the electricity needed to power over 140 homes for an entire year; and
WHEREAS, a conversion to LED street lighting can also minimize waste from lighting maintenance, provide uniform lighting color throughout the town, enhance visibility for community safety and help to address the urgency of climate change.
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Town Manager to execute an agreement with Duke Energy to convert all street lights in Chapel Hill to energy-saving LED light fixtures as described by Option A in the Technical Memorandum and below:
• The Town will ask Duke Energy to convert all remaining non-LED street lights to LEDs as soon as the utility’s installation schedule will allow, estimated to begin as early as January 2020.
• The Town will pay the standard street lighting conversion cost of $153,690 over a four year period, or sooner, should budget allow.
• The Town will agree to pay any monthly fees associated with the new decorative LED street lighting for FY19-20.
• For the Council’s consideration as part of the FY20-21 budget discussion, staff will bring forward an item to cancel the monthly decorative street light transition payment plan for LEDs and pay the full $365,234 in a lump sum payment.
• For the Council’s consideration as part of the FY20-21 budget discussion, staff may bring forward an item to cancel all other monthly decorative street light fee agreements and pay the one-time full cost for all existing decorative street lights.
• The costs above are estimated by Duke Energy and rounded to the nearest dollar. This Resolution also allows for a 1% adjustment above these costs should the final contract amounts change.
This the 25th day of September, 2019.
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The Agenda will reflect the text below and/or the motion text will be used during the meeting. |
presenter
PRESENTER: John Richardson, Community Resilience Officer
RECOMMENDATION: That the Council adopt a resolution, authorizing the Town Manager to execute an agreement with Duke Energy to convert all street lights in Chapel Hill to energy-saving LED light fixtures under Option A.