From The Examiner of East Jackson County
By Mark Genet
March 19, 2019
There will be no digital smart meters in the foreseeable future for Independence utility customers.
The City Council voted Monday against entering a contract with either vendor for advanced metering infrastructure – more popularly known as smart meters – closing a process that had taken place the better part of four years.
Honeywell offered a mesh communication system for the smart meters, while Core & Main offered a point-to-point system and had been the first choice for city staff and the Public Utilities Advisory Board from the beginning.
Both votes went 5-2, with council members John Perkins, Mike Huff, Karen DeLuccie and Tom Van Camp voting against both proposals.
Mayor Eileen Weir voted yes on both counts, joined by Curt Dougherty for the first vote regarding Honeywell and by Scott Roberson on Core & Main.
The city’s aim with smart meters was to save money. According to latest estimates the city could realize a net savings of $44 million over 15 years with the Core & Main deal, break even in about eight years and cut 15 full-time positions. With the Honeywell deal, 15-year savings project to be about $40.5 million, with a break-even point in nine years and 14 positions cut (one technician would be needed to maintain the mesh network).
[What was the meter lifespan claimed in the business case to get these savings figures?]
The PUAB considered Core & Main’s bid of just less than $29.45 million against that of Honeywell, which sat at just less than $31.3 million but had not yet finalized.
Van Camp and Huff said the city needs to focus more on appropriately closing the Blue Valley plant and replacing the energy capacity from that.
“We have bigger problems in the city; we have a bill coming due,” Van Camp said, referring to Blue Valley reaching the end of its useful life. Smart meters, on the other hand, are a want and not a need right now, he said.
Huff said he didn’t think it’s necessary at all to replace the analog meters and that the upfront cost would hurt chances of reducing rates, as he doubted the city’s projections on long-term savings and wondered why there was a 15 percent contingency compared with the more standard 10 percent.
Roberson, who has long expressed his preference on point-to-point over mesh for smart meters based on a more secure network and also preferred Core & Main for its experience and customer service with smart meters, said the city would realize more savings by not having to devote personnel and time to utility shut-offs and turn-ons.
City Manager Zach Walker said the contingencies came from erring on the side of caution for final negotiations, as the city more urgently needed decisions on yes/no for smart meters and with whom.
DeLuccie afterward said she also had doubts about the savings projections because of ongoing operating and management costs and possibly needing to replace meters over time. She also echoed Perkins’ concerns about the open-ended nature Honeywell’s contract.
“I just can’t justify the expense,” she said. “I’ve never had a contract that didn’t use contingency.”
Answering Perkins’ question about what would happen if neither measure passed, Walker said the city would continue to be diligent on checking meters for possible maintenance.
Both Roberson and Van Camp initially said they wouldn’t vote for a contract without an opt-out policy for customers, though Weir got unanimous support for a resolution that any contract negotiation include an opt-out policy.
Back in June 2015, the council had directed the city manager to explore the feasibility of smart meters. A request for proposals first went out in April 2017, but when Core & Main’s contract first came up in that fall, the council punted on that decision, then turned it down in April 2018. The majority of council members cited further consideration for the best technology and implementation options as reasons for voting no. In August 2018, the council heard presentations from the five finalist vendors.
Core & Main was the lone vendor from five finalists that offered a point-to-point digital transmission system and was preferred by city staff, while all others offered what’s called a mesh system. Honeywell rated the highest from that group. A council majority directed city staff to also negotiate with Honeywell for comparison purposes.
Weir said she respected but was disappointed in the no votes and that after her research she was convinced Independence should move to smart meters and that it was important the city’s future financial health.
Both Kansas City Power & Light and the Kansas City, Kansas Board of Public Utilities use smart meters.
“I’m disappointed we’re not moving forward with something I believe the city does need,” Weir said.
Walker said after the meeting that he anticipates presentations on a Blue Valley closure and the electric rate study, as well as a proposed decision on purchasing energy capacity to replace Blue Valley, before the council in late April or early May. If any requested smart meter proposal came forward in the future, he said, it would be after negotiating again with vendors based on technology and pricing updates.
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