City Council Considers $30 million Advanced Metering Initiative Monday

FURTHER UPDATE: The City Council in July 2018 appears open to reconsidering the project and is asking qualified vendors to make presentations to the City Council.

UPDATE: The City Council in April 2018 voted 4-3 not to proceed.

The Independence City Council is scheduled to consider a $29.7 million proposal to install automatic electric and water meters for the city's 55,000 plus electric and water utility customers at its April 16th meeting.

The project would be the largest single city capital investment since the construction of the Event Center.

The proposed vendor for the project is Core & Main which was the low bidder. Seven different proposals were received and a thorough review and evaluation conducted including scoring and followup interviews with the two low bidders.

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.

The project costs would be shared between three city utilities: Independence Power and Light ($10.5 million); Water ($15.6 million) and Water Pollution Control ($1.7 million).

The Independence City Council voted 5-2 last September postpone a final vote on the project fox six months to April 16. Voting to table were Council members Karen DeLuccie, John Perkins, Scott Roberson, Chris Whiting and Mayor Eileen Weir. Voting against were Curt Dougherty and Tom Van Camp.

Dougherty and Van Camp said the low bid - unanimously recommended by the seven-member evaluation committee - should be rejected and the process started all over.

Weir made the motion to table the proposal to April 16th to provide more time to address concerns about health risks, privacy and the impact on affected city workers.

Several city department compiled a report that was reviewed by the Public Utilities Advisory Board. (Download the report)

Some community members have spoken against the advanced metering initiative and requested the option to opt-out if the new meters are installed. IndyEnergy supported the project in an opinion piece in The Examiner last October.

This is expected to be the last formal action of the current city council.

Mike Huff, newly elected City Council member, joins the City Council later that evening when a new City Council is sworn in. During the recent City Council campaign, Huff - a former IPL senior manager - said he opposed the project.

The total costs includes material, software, support, annual recurring fees and maintenance for 10 years. Projections are 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 after three years.

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.

Most utility companies are moving to advanced metering system

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.

Core & Main (formerly HD Supply) had the highest score based on an extensive evaluation that included 17 different categories and nearly 1,000 compliance requirements.

Two vendors (HD Supply and Honeywell) were short-listed for in-person interviews and then both given final evaluation scores given by the seven-member city evaluation committee.

The final evaluation score (Table 5) gave HD Supply an average score of 96.74 and Honeywell a score of 91.80.

"The Evaluation Committee determined that HD Supply provided the most reliable and cost effective solution based on the established evaluation criteria and recommended this Vendor for award," the 34-page evaluation report concluded.

After the interviews, the two firms were asked to submit a 10-year total project cost. The HD Supply final price was $28.9 million compared to $34.9 million for Honeywell - a difference of $6 million between the two bids. (Table 4).

HD Supply was asked to use a more accurate water meter which increased their final price to the higher amount.

The Public Utilities Advisory Board unanimously recommended the project to the City Council.

If approved, the project as previously proposed would start with a pilot project of replacing 5,000 electric and water meters with the entire project completed in three years. Installation of the utility meters would be done by outside contractors.

There is some discussion, among City Council members, on opt out provisions and how much of the work could be done by current city employees.

This initiative would follow an ongoing major project to replace the city's antiquated utility billing system. That project is underway and currently being tested prior to going live.