Tuesday, July 17, 2018
Business

St. Petersburg at odds with Duke Energy over using LED bulbs

By changing its 30,000 street light bulbs to more efficient LEDs, St. Petersburg could save as much as $1.8 million a year — if Duke Energy would allow it.

To be clear, Duke doesn't mind using the energy saving bulbs, but the city says the utility doesn't want to give a financial break for the reduction in electricity.

"The problem is they just don't want to do it," said City Council chairman Karl Nurse. "Some of it is the standard resistance to change. The motivation beyond that I'm not entirely sure."

St. Petersburg and all local governments in the Duke Energy Florida service area pay their street light bills according to a utility tariff or pay schedule approved by the state Public Service Commission.

For St. Petersburg, that tariff amounts to $4.7 million a year. Based on savings the Raleigh-Durham area received in North Carolina from Duke, the city could see a 40 percent reduction or savings of $1.8 million by using the LED bulbs, Nurse said.

If Duke reduced St. Petersburg's tariff, it would also have to reduce the rate for any other local government in its service area in Florida that switched to LEDs, Nurse said. That could have a substantial impact on Duke's bottom line at a time when the utility is grappling with the loss of its Crystal River nuclear plant and billions of dollars in related costs.

Ann Marie Varga, a Duke spokeswoman, said the utility is working with St. Petersburg to resolve the concerns but could not immediately say what tariff rate the city would be charged with the new light bulbs.

"Lighting has long been a topic as technology and process improvements have occurred," Varga said. "The discussion with the city continues. We are expecting a reduction in some of the LED rates, but I cannot confirm the numbers that you've provided."

Nurse said Duke has told the city that it needs to maintain the current tariff rate because of the high cost of the LED bulbs the utility uses, made by GE. Nurse said the city has suggested using a different, less costly brand, but to no avail.

The idea would be to replace all of the bulbs as quickly as possible to achieve the greatest potential savings, even if existing lights have not burned out.

If the city and the utility cannot reach an agreement, the PSC might have to decide the tariff rate.

Use of the LED bulbs for street lighting has been growing among cities nationwide in recent years.

A study last fall by the Washington, D.C., research firm Northeast Group LLC found that the more efficient LED streetlights on average saved about 60 percent in combined energy and maintenance costs.

"Not only are LEDs helping save money through reduced energy and maintenance costs, but 95 percent of the cities and municipalities we surveyed said both they and residents were very happy with the performance and light quality of the new streetlights," Northeast Group stated in its report.

"Many reported that law enforcement officials in particular had praised the lights for improving visibility and public safety."

In addition to consuming less energy and reducing maintenance costs, LED streetlights also turn on and off nearly instantly and have dimming capability. That enables cities to install "smart" features to the streetlights, which further reduce energy consumption, improve billing, and enable remote monitoring features.

Northeast Group surveyed about 100 cities and municipalities across the United States that have implemented some form of LED streetlight initiatives.

Much of the growth in LED bulb use was fueled by federal stimulus money from the American Recovery and Reinvestment Act. As those funds have dried up, local governments have had to rely on the falling prices of LED bulbs to make the upfront cost affordable.

Ivan Penn can be reached at [email protected] or (727) 892-2332.

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