The city of Chattanooga plans to scale back a program to replace traditional streetlights with new LED fixtures.
Since 2012, the city has paid a Hixson-based company, Global Green Lighting, $6 million for about 6,000 replacement china led. The energy-efficient lights are supposed to save money, lower utility bills and reduce carbon emissions. But a City Hall memo, released Monday, says the replacement program has been accompanied by unexpected costs, installation problems and an inefficient maintenance schedule.
Under the current agreement with Global Green Lighting, it would take 13.2 years before the city would recoup the cost of the LED lights instead of the eight or nine years originally expected.
"It is also clear there are lighting alternatives at a fraction of the cost. These products would provide energy savings while producing a much quicker return on investment than the city receives from this sole source vendor," the memo by Chief Operating Officer Jeff Cannon and Chief Finance Officer Daisy Madison states.
Cannon and Madison began reviewing the program last May once Mayor Andy Berke came into office. Upon their recommendations, the city plans to alter the deployment schedule, purchase cheaper LED g24, and revise contracts with a future vendor and EPB—the publicly owned utility that oversees Chattanooga’s street light infrastructure.
The most significant change would scale back the rate of replacement. In the first two years, EPB replaced more than 4,000 lights in the downtown area. Because the cost of many of the current lights is not fully recouped, crews have removed working lights worth about $2.5 million, according to Harold DePriest, EPB president and CEO.
"When the city tells us to hang a streetlight, we go buy one and hang it up," DePriest said. "We recover the payments for that light over 25 years."
Under the new plan, one of the high-pressure sodium fixtures would only be replaced with an LED once it stops working.
About 700 lights stop working each year and need to be replaced. City officials still plan to replace them with LEDs. The memo recommends that Chattanooga spend $600 to $800 for each one. The Berke administration plans to rebid the vendor’s contract LED mini spot light. The city’s upcoming fiscal budget is expected to reflect the new deployment schedule and reduced cost of the lights.
Don Lepard, president of Global Green Lighting, said Tuesday evening he was disappointed with the changes sought by the Berke administration. When the City Council first approved the contract with his company, some of its members urged him to move his factory in China to Chattanooga. He did so and hired 60 new people. Those workers have since been laid off, Lepard said.
"We bid on a contract to produce 27,000 lights in three years," he said. "This new proposal wants to produce and replace the lights over 20 years. It’s not going to work."
The City Council reviewed the results of another report Tuesday afternoon with City Auditor Stan Sewell. His office reviewed the contracts for the program, as well as financial records from Chattanooga, Global Green Lighting and EPB. His report looks at the number of years it takes before the energy savings of the LEDs pay back the fixtures’ cost, or 13.2 years.
