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Street Fight
Street Fight
LED street lighting the newest challenge to old utility business models
Guest co-author Dan Howe is the assistant city manager for the City of Raleigh, NC, and a member of RMI’s eLab.
A lot is being said about various threats to the electric utility business model. At their root, many of those threats are really a fundamental misalignment between utilities’ revenue model and their customers’ own financial needs and service preferences. More often than not, solar PV figures centrally in these conversations. But a new and unexpected threat is emerging: street lights.
For any level of government responsible for managing roadways, street lighting is a critical service. Among other services, effective and targeted lighting on roadways can dramatically improve auto and pedestrian safety. Now emerging technologies such as energy-efficient LED lighting are creating a dramatic opportunity for consumer-side cost savings, as well as the potential for a much broader suite of municipal services via LED-integrated smart sensors, and with it the possibility for upending a staid and overlooked component of the traditional utility service offering. Clearly, these are not your grandfather’s street lights.
In some cities, the municipality owns the streetlights and pays the utility for the energy those lights use. But in most cities around the country, the local electric distribution company provides overhead street lighting as a basic service at a flat monthly rate per light, which includes the light itself, maintenance, and electricity. Therein lies the rub—regulated utilities often have little incentive to invest in more efficient streetlights, which offer a reliable, consistent, and often lucrative revenue stream that comes at a time of day (or night) when demand is low.
Despite a seeming incentive for utilities to invest in efficiency and thus increase the profit margin between the flat monthly rate they charge municipalities and the kilowatt-hours that are bundled in that rate, installing a more efficient street lighting system typically requires approval from the state PUC, including tariff updates to reflect the new costs—a process that would erode any cost savings the utility would hope to capture.
Yet efficient streetlights could save cities and towns tons of money if these municipalities were able to capture all the inherent savings in energy and maintenance promised by the new technology. In fact, street lighting often represents the highest single energy-related expense in municipalities’ annual budget, often running into the millions of tax dollars per year...
LED street lighting the newest challenge to old utility business models
Guest co-author Dan Howe is the assistant city manager for the City of Raleigh, NC, and a member of RMI’s eLab.
A lot is being said about various threats to the electric utility business model. At their root, many of those threats are really a fundamental misalignment between utilities’ revenue model and their customers’ own financial needs and service preferences. More often than not, solar PV figures centrally in these conversations. But a new and unexpected threat is emerging: street lights.
For any level of government responsible for managing roadways, street lighting is a critical service. Among other services, effective and targeted lighting on roadways can dramatically improve auto and pedestrian safety. Now emerging technologies such as energy-efficient LED lighting are creating a dramatic opportunity for consumer-side cost savings, as well as the potential for a much broader suite of municipal services via LED-integrated smart sensors, and with it the possibility for upending a staid and overlooked component of the traditional utility service offering. Clearly, these are not your grandfather’s street lights.
In some cities, the municipality owns the streetlights and pays the utility for the energy those lights use. But in most cities around the country, the local electric distribution company provides overhead street lighting as a basic service at a flat monthly rate per light, which includes the light itself, maintenance, and electricity. Therein lies the rub—regulated utilities often have little incentive to invest in more efficient streetlights, which offer a reliable, consistent, and often lucrative revenue stream that comes at a time of day (or night) when demand is low.
Despite a seeming incentive for utilities to invest in efficiency and thus increase the profit margin between the flat monthly rate they charge municipalities and the kilowatt-hours that are bundled in that rate, installing a more efficient street lighting system typically requires approval from the state PUC, including tariff updates to reflect the new costs—a process that would erode any cost savings the utility would hope to capture.
Yet efficient streetlights could save cities and towns tons of money if these municipalities were able to capture all the inherent savings in energy and maintenance promised by the new technology. In fact, street lighting often represents the highest single energy-related expense in municipalities’ annual budget, often running into the millions of tax dollars per year...
http://blog.rmi.org/blog_2013_11_26_Street_Fight
7 replies
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http://www.lightsoninhampshire.co.uk/Public/Default.aspx
http://www3.hants.gov.uk/roads/street-lighting/pfi-summary.htm
The street lighting replacement and upgrading is taking place between 2010 and 2015.
> Some of the benefits of the project include:
> - improved visibility and reduced light pollution at night
> - dimming lights by 25% from dusk to midnight and from 5am to dawn and by 50% from
> midnight to 5am to reduce carbon emissions
I can vouch for the above points: much cleaner light on the roads & pavements (=sidewalks!)
and far less light pollution - the night sky is so much clearer now!
Here's hoping that this process spreads far & wide!
