This story was a struggle. Should it be a journalistic piece or an editorial piece? In the end I decided to put it in the editorial pile. The reason I struggled is because I know many of the parties in this story. I do not want to offend but the lack of responsibility shown by all the parties deserves scrutiny. Georgia taxpayers and voters have been betrayed again.
No one seems to think about the cost anymore except taxpayers and people who have to think about the costs - the middle class and economically disadvantaged communities. Though our political leaders discuss our “capitalistic” free market society and government waste, the reality is it doesn’t really matter to those who say they represent the voters. Both parties seem happy to spend away without regard to fiduciary responsibility or societal costs.
Enter the Great Georgia LED debacle of 2016
You might have heard about it. It has been reported on in numerous papers.
Let’s meet the players: Georgia Power, the Georgia Public Service Commission and local city and county governments.
In a recent AJC article, ‘Revolutionary’ street lights save bundles - but not for Ga.’s cities, the plan was explained. Georgia Power came to the Georgia Public Service Commission and asked for what it called a LED tariff. This LED tariff would give Georgia Power the authority to approach local municipal and county governments to provide a LED replacement plan. The Georgia Public Service Commission approved the plan.
This should have been good for everyone. LEDs save electricity up to 60%. In fact, Southeast Green recently ran an article where Somerville, Tennessee experienced a 69% savings by switching to Cree LEDs. Bob Turner, Somerville city administrator said “We originally budgeted more than $100,000 a year for our lights, and now we budget $25,000. That’s $75,000 tax dollars saved in the general fund.” (Read more here.)
The plan in the normal world would have most likely been a performance contract. What’s a performance contract? To offset the capital upfront costs of a project, a contract would be written where the savings for the cities and counties during the first part of the contract would be paid back to Georgia Power who assumes the capital costs for switching out the existing lights to LEDs. This is happening all over the country. After the costs and logical profit is paid back the recipient cities and counties would start seeing big savings. That is not what happened in Georgia.
The other side of the story
Some of you may be wondering why Georgia Power would install something that was going to cut electric sales. They didn’t. The local governments are the ones who had to ask for the program. Additionally, the tariff that Georgia Power asked for and was unanimously approved by the Georgia Public Service Commission (GA PSC) was that the cities and counties would not see any savings by switching to LEDS.
What? Yep, Georgia Power would pocket in full the projected 40% savings for however long the contract was. Not a penny of savings would be passed on to the cities or counties and hence the taxpayers.
Southeast Green spoke with several staffers from the GA PSC about the vote and the tariff. According to the PSC staff, the cities and counties actually approached Georgia Power. Georgia Power wasn’t even going to offer the LED replacement. It is hard to understand that the cities and counties would actually ask to pay the same amount they are currently paying for using less electricity, even though many have been approached by third party installers to reap the savings benefits LEDs provide.
Are you confused? Me too.
Granted it is totally understood that cities and counties would take the path of least resistance which in this case would be to work with Georgia Power who owns the poles and lighting housings. If Georgia Power is used then it becomes a simple replacement job but to forfeit 40% of savings for convenience does not demonstrate fiduciary responsibility by the local governments.
Southeast Green has been informed by third party vendors, that when owners of parking lots who have Georgia Power lighting have approached Georgia Power when wanting to change to a LED lighting housing that Georgia Power will charge a removal fee of the poles and the new vendor will have to install poles and the lights. Clearly, this is not sustainable and erases the savings gain from installing the new lights. Since Georgia Power’s primary business is selling electricity, this tactic in pole protection seems overly aggressive.
If the cities contracted with anyone else, Georgia Power could sell the poles at a discounted rate, since the poles have been in place for years, to the new vendor. That would make logical sense. After all this is not some proprietary technology, it’s a wooden or aluminum pole.
Georgia Power is not being asked to give away its investment. Georgia Power should be fairly compensated for the cost of the poles. However, if a party doesn’t want to use Georgia Power lights that are not energy efficient then why can’t an agreement be made instead of total destruction of the pole infrastructure? Georgia Power is still making the money from selling the electricity and now releasing the expense of pole maintenance.
Is it a complete win for Georgia Power to lose the lighting housing and poles? No of course not, but since they aren’t offering the LED lighting at competitive pricing then a free market would dictate that companies should have market driven options without utter destruction of poles in place. It’s not a perfect solution but it is an energy efficient solution and prevents unnecessary waste in regards to poles.
Answer: All of the above
Who’s responsible? No one in this story is innocent of bad decision making. Except maybe the tax payers but tax payers are also voters who put these folks in office.
However, if there is one most egregious player, I am not sure we would all agree but I would place the blame on the local governments. Instead of asking for a tariff and letting Georgia Power dictate all the terms, the cities and counties should have negotiated terms into the tariff. For example, if the cities or counties chose to use another vendor, who would actually extend the savings to them, then a rate for the purchase of existing poles should have been included in the tariff.
It is unconscionable, that local governments would cavalierly throw away 40% savings. In the AJC article, one local official said that being green was more important than the savings. I think that official missed the point. The savings for his city alone would have roughly equaled $85,000.00 per year for the five year contract.
What could that city have done with the extra $85,000 to green their city? They could have added five solar installations that would further reduce electricity costs. They could have extended more bike lanes to reduce traffic and emissions. They could have planted more trees, expanded side walks or repair sidewalks to make it even more pedestrian friendly. They could have done more energy efficiency work on older existing buildings. They could of spent money on educating citizens to be more sustainable or installed more water conservation systems to reduce storm runoff. The list could go on and on.
Georgia tax payers are paying for bad decision making...again. When will our elected officials represent voters instead of corporate profit?