Southeast Michigan Regional Energy Office Municipal Street Lighting Consortium

Start Date: 
Jan 1, 2015
End Date: 
Apr 30, 2016
Collaborator: 
Southeast Michigan Regional Energy Office
Summary: 

Goals & Objectives:
The goal of the Southeast Michigan Municipal Street Lighting Consortium (hereinafter, Consortium) is to convert streetlights throughout the metropolitan Detroit region to high efficiency light-emitting diode (LED) technology by the year 2020. Accomplishing this goal will yield considerable benefits including significant reductions in municipal energy expenditures and environmental impacts (i.e. MtCO2e reduction) resulting from the relative efficiency of LED lighting and public safety and aesthetic benefits resulting from LED’s reliability, color temperature, coverage precision and full-spectrum illumination. Success of this initiative may also lead to ancillary benefits including increased readiness among municipal officials to adopt aggressive energy efficiency policies reaching beyond municipal operations and influence over the energy related practices and policies of other local jurisdictions throughout the state and country.

The objective for the SNRE student team will be to observe and evaluate the Consortium’s first year after launching and recommend how to implement, evaluate and improve operational, financial, organizational and communication processes to optimize environmental, fiscal and social outcomes. The project offers students the opportunity to address environmental, financial and social needs by working with municipal, regulatory, utility, non-governmental and financial organizations and integrating environmental, policy and business approaches.

Justification, Benefit, or Significance:
Streetlights are a little-noticed but an indispensable element of the human landscape, providing public safety (by discouraging crime and improving visibility for pedestrians and drivers) and place-making benefits. Incumbent street lighting technologies, predominantly mercury vapor and high-pressure sodium, are expensive to operate, cast unnatural light spectrums and are difficult to aim, causing light trespass/pollution and dark spot problems. Additionally, street lighting is the largest energy expense for many municipalities and accounts for significant environmental impact (i.e. impacts a city’s carbon footprint).

LED lighting technology addresses these issues and may provide additional, outside-the-box benefits:
•An LED fixture generates lumens equivalent to incumbent technologies with 60% to 70% less electricity consumption. The energy and cost savings resulting from converting to LEDs helps municipalities reduce their electricity bills and achieve their environmental goals. If the 26 municipalities that are currently Consortium members were to convert all of their approximately 70,000 streetlights to LEDs, they would realize net savings over the expected 15-year life of the equipment in excess of $60 million;
•LED fixtures create a relatively complete “white” light, which is aesthetically more pleasing and creates perceptions of increased safety;
•The light from LED fixtures can be directed with much greater precision than that from incumbent lighting technologies, leaving fewer dark spots, and creating less light trespass and light pollution and making cities more likely to meet criteria to qualify as a Dark Sky community.

LED fixtures can deliver additional “smart” benefits not attainable with incumbent technologies. For example, LED fixtures can incorporate self-reporting functionality that alerts the customer and utility to an outage, allowing for quicker repair and more accurate billing. LED light output can be tuned to create ambiance for community events, or for safety purposes (e.g., strobing at the site of an emergency or indicating evacuation routes). LED fixtures can be incorporated into smart electrical grids, allowing quicker communication with smart meters. LED fixtures can even incorporate Wi-Fi capability for cities that want to provide universal coverage in certain areas. LEDs can be paired with other technology, such as solar street lights, which can operate off-grid and have the potential to operate at a net-zero cost to the community.

Despite these advantages, there are significant financial, educational and operational barriers to quick conversion to LED street lighting:
•LEDs are more expensive to purchase than incumbent technologies, even though they are cheaper to operate. The upfront capital cost can be a disincentive for cash-strapped municipalities;
•The financial case to support upfront investment by municipalities in LEDs is unsure because the Michigan Public Service Commission (MPSC) has not set LED rates (“tariffs”), which means future construction and operating costs may change. The MPSC did not want to set defined rates as long as the purchase cost of LEDs was declining and without having cost data on the operational, maintenance and replacement records of LED fixtures;
•Utility and municipality incentives to deploy LEDs are not well aligned. This is important because DTE Energy (DTE), the regional investor-owned utility, owns and operates about 90% of the streetlights in the metropolitan Detroit region, while municipalities foot the bill for the electricity as well as the capital investment in upgrading the technology. Although the utility must meet defined energy conservation goals, DTE has a disincentive to pursue energy conservation more aggressively since that would reduce its billings. Financially, DTE loses accounting benefits when it discards incumbent-technology fixtures before they are fully depreciated. Culturally, DTE’s foremost service objective is reliability, which breeds a cautious approach to the adoption of new, state-of-the-art technologies that don’t have a track record in the market. Operationally, DTE is not sufficiently staffed to replace all streetlights in the region within the next five years, especially because much of its construction capacity is assigned to upgrading streetlights in the City of Detroit to 100% LED over the next two years. The result is that the current schedule for LED conversions outside the City of Detroit is much slower than most municipalities desire and cost savings are lower than the energy savings would suggest might be realized. The opportunity cost for municipalities is significant;
•Street lighting priorities vary from community to community, and different stakeholders may have different priorities as well. Economically distressed communities, such as the City of Detroit, may see restoration of street lighting for public safety purposes as the top priority. Communities which are more financially stable may be more motivated to improve streetscape aesthetics and achieve place-making and environmental goals. City staff may regard cost reductions as the most evident benefit of LED streetlights, but residents do not directly experience these cost reductions and may be more interested in lighting quality and reliability. Thus, understanding the priorities, concerns and benefits that different stakeholders bring to the discussions, and how these perspectives vary across communities, is foundational to completing a successful and popular regional streetlight conversion effort.

By forming a Consortium, member municipalities hope to overcome these barriers:
•By bundling streetlight conversion projects of many municipalities across several years, the Consortium can create turnkey financing mechanisms that are easier and more affordable than one-off financing methods that cities now arrange for with their small annual round of DTE-implemented LED upgrades;
•The Consortium can negotiate a multi-year, regional LED conversion agreement with DTE that can lock-in costs, energy optimization rebates and conversion schedules, reducing uncertainties in the financial case for conversions which may help secure lower-cost financing;
•By committing to a large-volume, long-term conversion program, the Consortium can provide DTE with greater certainty to commit to increased staffing and to plan energy optimization rebates beyond year-to-year. Working together, the Consortium also has greater negotiating clout to speed up the pace of conversion, capture more of the financial benefits for municipalities and push for more technology flexibility and innovation;
•The Consortium can speak more powerfully to regulatory bodies – principally, the MPSC, but also other agencies and the Legislature – to enact laws and regulations that remove barriers and provide incentives for aggressive energy efficiency efforts;
•The Consortium can leverage street lighting upgrades to advance place-making goals that extend beyond individual neighborhoods. Metropolitan Detroit could become the first metropolitan region in the U.S. to convert to LED street lighting. This investment in high-tech infrastructure could help to reposition the Detroit area as a high-tech leader nationally, thus contributing to the economic and cultural recovery of the region. The Consortium envisions coordinating branding and public relations communications with the Public Lighting Authority of Detroit to realize regional reputation and economic benefits from street lighting upgrades.

Activities & Duration:
The student team will consult with the Southeast Michigan Regional Energy Office (Regional Energy Office) on a wide range of needs related to moving from planning to launch stage, and will evaluate effectiveness and provide recommendations for how to achieve greater impact.

Expected Deliverables:
A final project report, including presentation to the Consortium membership. Various planning and evaluation tools may also be generated, for example a financial analysis tool for evaluation of proposed street lighting projects.

Implementation:
The work will inform ongoing, fundamental strategic and operational decisions of the Consortium as it launches, and ensure that we learn and adjust as we go. The work will be shared with various groups and partner organizations, such as the U.S. Department of Energy’s Municipal Solid-State Lighting Consortium and High-Performance Outdoor Lighting Accelerator, NextEnergy, etc.

Keyword: 
street lighting
light emitting diodes (LEDs)
energy efficiency