Independence city staff have selected a vendor for the utilities' upcoming Advanced Metering Infrastructure project, and costs appear to be below earlier projections.
In addition, installing the new meters stands to save the utilities money long-term because of operational efficiencies.
Andy Boatright, deputy director of Independence Power & Light, said AMI is a technology that current and future generations will want to use, because of the more accurate readings and customers' ability to track their own utility usage in real time on their mobile devices.
In a presentation Monday before the City Council, Boatright revealed the best offer from the selected vendor – HD Supply – as just below $29.7 million, which would be paid over the course of 10 years. Costs during the three-year implementation period are projected to be about $25.3 million, which Boatright said is more than $5 million below projections from a year ago when the city was still exploring the project.
HD Supply was selected over Honeywell as finalist vendors from seven responses to the two-month request for proposals that ended May 31.
The city utilities have cash on hand to begin the project, Boatright and Finance Director Brian Watson said, and Watson added that appears to be preferable way to finance the project.
The utilities would see savings or benefits from staff reallocations, less vehicle expenses and replacement costs, reduced theft and some increased revenue from more accurate readings.
Customers would benefit from better outage response times, the ability to track their energy usage more closely and the utilities possibly staving off rate increases.
The utilities would make meter exchanges themselves, and customers would not have to pay if any defects prevent such an exchange at first.
“Millions of dollars in savings would be forgone if we did not go forward with this project,” Boatright said.
While advanced metering has become more popular in recent years with utility services, Boatright said the city is not necessarily behind the curve at this point, thanks to technological advances. Independence, for example, would have a secure cloud-based system for utility data, avoiding the cost of hardware and software.
“These systems have come a long way in a relatively short time, so I think we're in a great place,” Boatright said. “I don't think we're behind the 8-ball.”
Averaging all utilities, the project should break even after about eight years, Boatright said – one year earlier than originally anticipated. From there, the utilities would save millions of dollars. Boatright put a positive net cash flow estimate over 15 years at $43 million, adding that it was a conservative estimate that “passed the sniff test.”
An ordinance for a contract with HD Supply could be before the city council next month.