City Bill Cut $110K After UI Fleecing
by Thomas MacMillan | Dec 23, 2013 3:58 pm
Posted to: City Hall, Environment, City Budget
Looking over the city’s electric bill, Giovanni Zinn noticed something odd: United Illuminating was charging New Haven three times more than Connecticut Light & Power would to keep streetlights lit.
Zinn (pictured) did some more digging, the city hired a lawyer, and now New Haven will save about $110,000 on streetlight power in the coming year, said Zinn, who works in city government’s engineering department.
The savings will come because the state Public Utilities Regulatory Authority (PURA) approved a new, lower rate for United Illuminating (UI) streetlight electricity in New Haven. Zinn said the new UI rate is still not as low as Connnecticut Light & Power’s (CL&P), which doesn’t serve New Haven. Zinn said he hopes to see the rate go down further.
To facilitate that, the Board of Aldermen’s Finance Committee voted this month to recommend freeing up $15,000 to pay for more lawyer fees in the city’s push for lower rates.
In order to find even cheaper electricity, Zinn will have to dive back into the “byzantine” world of public utility rate calculation and approval—featuring esoteric mathematics and opaque bureaucracy—from which he pulled the recent savings.
In other streetlight savings, Zinn has also been spearheading the city’s conversion to LED streetlights. They use less power, last longer, and require less maintenance that tradition high-pressure sodium technology. Zinn said LED streetlights will save the city as much as $120,000 per year when the conversion is complete at the end of 2014. After three years, when the changeover bill is paid off, the city will save about $432,000 per year, Zinn said.
“Something Weird Here”
Early in the year, Zinn was looking into the city’s electricity use, searching for efficiencies and savings. He turned his attention to streetlights, of which the city has between 11,000 and 12,000 and spends about $1.6 million per year to power, Zinn said.
UI charges New Haven a unique rate—called Rate U—for streetlight power. Its a rate set for municipalities that own their own streetlights, of which New Haven is essentially the only one in UI’s service area. Other towns have streetlights owned by UI.
“No one had previously looked at—‘Hey, what are people paying in other parts of the state?’” Zinn said.
Rate U has a number of components. Among the most important are price per kilowatt hour and a monthly fee per “delivery point”—per streetlight. At the beginning of 2013, those prices stood at 4.2534 cents per kilowatt-hour and $4 per month per delivery point.
Zinn compared Rate U with the rate that CL&P charges for power to streetlights owned by municipalities, and found CL&P’s rate was about a third of Rate U.
Asked why UI was charging so much more than CL&P, UI spokesperson Ed Crowder said “I can’t comment on CL&P’s rates.” He said he doesn’t know how CL&P calculates its rates, so he can’t make a reasonable comparison.
New Haven’s ownership of its own street lights is “almost unique in our service area,” Crowder said. “So Rate U is calculated differently than the way rates are calculated for different service areas. So it’s always going to be apples to oranges when you’re comparing it to other towns in Connecticut.”
Alarmed by the difference Zinn found between UI and CL&P’s rates, the city contracted energy lawyer Matt Ranelli and had a meeting with UI.
“We approached UI and said, ‘Hey there’s something weird here. What’s going on?’” Zinn said.
After negotiation, UI proposed a lower Rate U for approval by PURA. The proposal would have lowered the rate to 3.3006 cents per kilowatt hour and $3.10 per month per delivery point.
PURA rejected the proposal. According to PURA spokesman Michael Coyle, the return on UI’s proposed rate “could be viewed as disproportionate in comparison to the returns expected from other rates.”
PURA recommended holding the monthly delivery point charge at $4 and lowering the energy charge.
In August, UI submitted another proposed Rate U: $4 per month per delivery point and 2.7376 cents per kilowatt hour. PURA approved the proposal and it went into effect in September.
Zinn said the change should save the city about $110,000 per year. “So, we’ll take that,” he said. “The goal is obviously to knock this down as far as we can.”
“I think that certainly the city speaking up and saying hey it looks very expensive probably helped us,” Zinn said. “That, coupled with our LED change-out is going to dramatically reduce the total amount we’re going to be paying for streetlights.”
Future So Bright
Zinn said the city is one-third of the way through converting 3,600 streetlights from high-pressure sodium heads to LEDs. Two more conversion phases are coming in 2014, and by the end of that year, all the of the city’s non-decorative lights will be converted, Zinn said.
The changeover is paid for partially through “on-bill financing” with UI. The power company lends the city the money—at zero-percent interest—to pay for the conversion and the city pays off the debt through it electricity bill. Even while the city’s paying it off, it will still save between $8,000 and $10,000 per month, Zinn said. After three years, when the financing is all paid off, the savings will go up to about $36,000 per month, he said.
“The LED technology is amazing,” Zinn said. “It’s better light at half the energy consumption. It’s a no-brainer.”
During a recent stroll down Orange Street, Zinn pointed out the difference in light quality LEDs make. South of Chapel on Orange Street (pictured), high-pressure sodium lights illuminated the street with a orange glow.
On Chapel Street west of Orange Street (pictured), Zinn pointed out a vision of New Haven’s nighttime future. The street was illuminated by a brighter, whiter glow, closer to sunlight.
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I heard that LEDs can be made to produce any color of light. I find the light from the new lamps a little harsh. If they come in a softer, warmer hue that would be preferable in my opinion.
UI left New Haven we owe them nothing now. I say we have a solar panel company here in New Haven now right? Lets set up a program working with roofers and the solar panel people all residents can get solar ( and many may need new roofs that is why I say roofers) And have the people that get them pay off the installation with the money they would pay the UI. And the extra can power can go into a New Haven based plant for low sun days?? Everyone wins and we would be the first city to go solar.
I’m actually surprised New Haven is ahead of the curve when it comes to replacing the high pressure sodium street lights with LED’s.
bravo to the city guy, the UI has a License to steal thanks to the DPUC .They are the best that money can buy.Another corrupt agency.
Giovanni characterized utility ratemaking as “Byzantine”. Having been to Istanbul (formerly Byzantium), a millennia-old city with 10 million inhabitants and having worked in energy policy for decades, I would say he is being charitable!
In all seriousness, I hope Giovanni stays on in the new administration. Thanks also to my friend, neighbor, and former colleague, Matt Ranelli.
Yep, LEDs can change color. Someone should raise money to replace LEDs in one neighborhood, then control them to put on a light show. We can capture it from rooftops or helicopters and put it to music and post to Vimeo. Perhaps to the tune of “Come on Eileen.”
Your headline for this story is very imflamatory. UI charges rates that are approved by the State. The Company doesnt do so arbitrarily. As you say in the slander, the Company did try to change the rate and tghe regulators said NO! If I was UI why would I loan the city money to change the lights to LED. Go Fetch!
By the way, UI would have stayed in the City if there were 30 acres or so near the highway to provoide access to the other 17 municipalities it serves. Not avauilable. New Haven is not the only place they serve, though the former mayor thought that to be the case. Please.