Update Nov. 3, 2018

Council Moves Towards a Vote on Advanced Metering.

The Independence City Council is poised to vote (Nov. 5) on a resolution to authorize a contract to proceed with the long-discussed Advanced Metering Initiative (AMI).

The resolution directs the City Manager to negotiate a contract with Honeywell which proposed a “mesh” network to connect the new separate electronic electric and water meters that would installed. The contract would be for $24.8 million with Honeywell - the vendor listed in the resolution. Separately the Water Department would purchase new water meters through a separate competitive process making the total contract worth $30.5 million.

City staff estimates the Advanced Metering Initiative would save the city $36 million over 15 years.

The city also is presenting a formal opt-out policy for utility customers who do not want the so-called smart readers. Some have raised questions about health risk, fire hazards and privacy considerations associated with the smart readers. [Those issues were reviewed in a city report.]

The opt-out policy is available to residential customers. There are some significant exceptions including utility accounts with have received disconnect notices within a year of wanting to opt-out or more than two names changes in a one-year period.

The real cost savings on the Advanced Metering Initiative is eliminating the need for high-paid city meter readers to physically visit a residence to read or disconnect/reconnect an electrical or water meter.

Those who do opt-out will not be eligible for any future rate reductions based on cost savings from installing the AMI meters.

Some background

This has been a complicated process for the City Council. In April 2018, the City Council voted 4-3 not to proceed on a contract with the low-bidder Core Main which proposed a point-to-point network.

The public discussion has revolved around the relative merits of a “point-to-point” versus a “mesh” network by another considerations has been who would be the electrical subcontractor on the major project. Mark One was the subcontractor on several of the four mesh proposals.

In August, the City Council reopened the issue by inviting presentations from five qualified vendors for a $30 million project to install separate advanced electric and water meters for over 55,000 utility customers.

See AMI documents and timeline.

The five vendors have submitted their best and final offer and will make formal presentations to the seven-member City Council. 

Once again the lowest bid was Core & Main, though several vendors significantly reduced their prices from their 2017 proposals. (See below)

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The summary best and final document also includes data on how compliant each vendor is with the city's proposed technical requirements. The results were (highest to lowest): Honeywell (97%), Core & Main (96%), Landis+Gyr (90%), Graybar (85%) and Itron (77%).

Some City Council members wanted to meet the vendors in person rather than rely on an extensive formal evaluation completed last August by city electric and water utility staff.

Formal council action would be required at a later meeting so the issue will not be decided Monday (Aug. 13th)

Procurement Process

The City Council process is unclear and a little unconventional.

The City Council adopted revised and updated procurement policies and procedures last July. That policy outlines a detailed formal process for evaluating Request for Proposals (RFP) which cost $50,000 or more. (pages 6-7).

The process includes a formal staff evaluation committee in which proposals are individually scored, then tabulated and then collectively reviewed by evaluation committee members. NOTE: This actually is the procedure done in 2017 which resulted in a 30-plus page formal evaluation report which recommended Core & Main.

The role of the City Council, in its own procurement policy, is to approve or reject the evaluation committee recommendation and does not contemplate the City Council members being directly involved in evaluating and scoring vendors proposals.

The procurement procedure is a well-defined process that also requires all evaluation committee members to sign confidentiality statements and non-conflict of interests to participate.

The city's purchase department also subscribes to a Code of Ethics from The Institute for Public Procurement. Two code provisions state:

  • Believes that personal aggrandizement or personal profit obtained through misuse of public or personal relationships is dishonest and not tolerable

  • Identifies and eliminates participation of any individual in operational situations where a conflict of interest may be involved

There is considerable interest in the project which would be the largest single city capital investment since the construction of the Event Center.

Difficult Decision

This has been a protracted three-year process and a difficult decision for the City Council to make. See AMI timeline

In October 2017, the City Council voted to table the project to April 2018 to get answers to questions about health and safety. In April, the City Council voted 4-3 not to proceed.

Council member Curt Dougherty, who has championed the project, subsequently encouraged the City Council to hear directly from the vendors.

Some community members have spoken against the advanced metering initiative and requested the option to opt-out if the new meters are installed.

The Missouri Public Service Commission, which regulated investor-owned utilities, is currently considering rules and regulations on personal data that might be collected through electronically connected meters. No formal policy exists.

IPL is a municipal utility and is not subject to any regulatory rule the Public Service Commission might be adopted but can be informed the effort to adopt its own policy.

Earlier projections were the city would recoup the total project costs in eight years.

Some saving would be reducing the number of city meter readers. In general, the number of meter readers would be reduced from the current 19 employees to three when the project is fully implemented.

Of the 16 employees, some are nearing retirement, some of been recently hired to temporary positions and other would be given opportunities to be reassigned to other jobs.

Project History

The project began in June 2015 when the City Council adopted a resolution asking the city manager to "evaluate the benefits and costs of an automatic meter reading system."

Subsequently, the city engaged West Monroe Partners to provide technical assistance on the project. The firm has received $446,000 in consulting fees to do a feasibility study and develop a project blueprint.

Most utility companies are moving to advanced metering systems.

As of December 2015, there are 64.7 million advanced meters operational in the United States - 42.9% of all the total 150.8 million meters, according to a December 2017 federal energy report. In 2007, there were only 6.7 million advanced meters or 4.7% of all meters.

In our utility region - the Southwest Power Pool - the percent was 48.7% of all installed meters.

Most area utilities including Kansas City Power and Light and Board of Public Utilities (Kansas City, KS) have already installed automatic meters.

IndyEnergy supported the project in an opinion piece in The Examiner last October.