Savings on LED lights at risk: GDC report

SMARTER AND BRIGHTER: Contractors replace streetlights at the Elgin shopping centre in late 2016 with new, brighter and more energy efficient LED lights, as part of Gisborne District Council's efforts to improve the level of service and help provide better visibility for the Gisborne Crime Prevention Camera Trust to provide better surveillance of the area. Picture by Liam Clayton

SWITCHING Gisborne street lights to LED is supposed to save ratepayers hundreds of thousands of dollars but a new report by council staff suggests those savings could be wiped out by expected rises in line charges, a suggestion the region’s lines company denies.

Gisborne District Council is about to start the final stage of a three year project to replace 1,078 of the region’s 3,230 street lights with LED luminaires, but a report to Gisborne District Council’s Assets and Infrastructure Committee said proposed increases in Eastland Network line charges “will negate savings” from the programme, which has already saved the council $97,000 over the last two years.

The report said GDC’s “billable” kilowatt hours had fallen from had fallen from 1,858,119kwh in January last year to just 1,700,000 this year, a fall of $158,119kwh.

However, the report said network line companies and electricity retailers across the country were now “realising the impact of LEDs” and making plans to recover incidental losses.

The report added that because network charges made up more than 50 percent of the council’s total costs, when compared to consumption (retail) charges, an increase in network charges would “disproportionately” impact the savings from the reduction in consumption from using LED.

“Initial discussions with our network provider are they will be making changes to their line charges and how they structure their fees.

“They are doing cost reforms in the first quarter of 2018 and will start stakeholder consultation in the second and third quarters of 2018. It is anticipated the street lighting methodologies will fall into that time frame but this is unconfirmed by ENL (Eastland Network).

“It is pertinent that the council engage in this consultation as the savings will be affected by any subsequent charge structure changes.”

The $900,000 project, which is heavily subsidises by the New Zealand Transport Agency was forecast to results in savings of $133,000 by the end of the third year; $61,000 of those savings in lower electricity bills and $72,000 in lower maintenance costs for street lights.

Eastland Network sets line charges here.

Responding to the report, Eastland Group chief executive Matt Todd said no decisions had been made on specific tariffs.

“Eastland Network reviews its prices every year in order to meet the requirements of regulation. We have not considered or made any decisions about specific tariff classes and to suggest we have done so is incorrect.

“Eastland Network continues to work with the council on this project.”

A spokesman for the Commerce Commission told The Gisborne Herald that while the commission was aware that lines companies (electricity distribution businesses, or EDBs) were considering the structure of street light lines charges, the commission did not control what EDBs or Transpower charge individual customers or groups of customers.

“We don’t have a particular work programme on this issue, but we would expect that EDBs would be considering the appropriateness of their pricing methodology/tariff structure in the face of the impact of emerging technology.”

A PricewaterhouseCoopers’ report for the Energy Efficiency and Conservation Authority on the possible impacts of LED street lighting noted back in 2014 that lines companies might seek to offset losses in electricity consumption through higher line charges. The report theorised, however, that it was more likely they would introduce a 100 percent fixed combined line and energy charge instead.

SWITCHING Gisborne street lights to LED is supposed to save ratepayers hundreds of thousands of dollars but a new report by council staff suggests those savings could be wiped out by expected rises in line charges, a suggestion the region’s lines company denies.

Gisborne District Council is about to start the final stage of a three year project to replace 1,078 of the region’s 3,230 street lights with LED luminaires, but a report to Gisborne District Council’s Assets and Infrastructure Committee said proposed increases in Eastland Network line charges “will negate savings” from the programme, which has already saved the council $97,000 over the last two years.

The report said GDC’s “billable” kilowatt hours had fallen from had fallen from 1,858,119kwh in January last year to just 1,700,000 this year, a fall of $158,119kwh.

However, the report said network line companies and electricity retailers across the country were now “realising the impact of LEDs” and making plans to recover incidental losses.

The report added that because network charges made up more than 50 percent of the council’s total costs, when compared to consumption (retail) charges, an increase in network charges would “disproportionately” impact the savings from the reduction in consumption from using LED.

“Initial discussions with our network provider are they will be making changes to their line charges and how they structure their fees.

“They are doing cost reforms in the first quarter of 2018 and will start stakeholder consultation in the second and third quarters of 2018. It is anticipated the street lighting methodologies will fall into that time frame but this is unconfirmed by ENL (Eastland Network).

“It is pertinent that the council engage in this consultation as the savings will be affected by any subsequent charge structure changes.”

The $900,000 project, which is heavily subsidises by the New Zealand Transport Agency was forecast to results in savings of $133,000 by the end of the third year; $61,000 of those savings in lower electricity bills and $72,000 in lower maintenance costs for street lights.

Eastland Network sets line charges here.

Responding to the report, Eastland Group chief executive Matt Todd said no decisions had been made on specific tariffs.

“Eastland Network reviews its prices every year in order to meet the requirements of regulation. We have not considered or made any decisions about specific tariff classes and to suggest we have done so is incorrect.

“Eastland Network continues to work with the council on this project.”

A spokesman for the Commerce Commission told The Gisborne Herald that while the commission was aware that lines companies (electricity distribution businesses, or EDBs) were considering the structure of street light lines charges, the commission did not control what EDBs or Transpower charge individual customers or groups of customers.

“We don’t have a particular work programme on this issue, but we would expect that EDBs would be considering the appropriateness of their pricing methodology/tariff structure in the face of the impact of emerging technology.”

A PricewaterhouseCoopers’ report for the Energy Efficiency and Conservation Authority on the possible impacts of LED street lighting noted back in 2014 that lines companies might seek to offset losses in electricity consumption through higher line charges. The report theorised, however, that it was more likely they would introduce a 100 percent fixed combined line and energy charge instead.

Your email address will not be published. Comments will display after being approved by a staff member. Comments may be edited for clarity.

Poll

  • Voting please wait...
    Your vote has been cast. Reloading page...
    Should the Peel Street Toilets building be developed or demolished?