Addleton struggles to gain council support for smart meter proposal

Cairo City manager Chris Addleton made a final push Monday night in hopes of persuading the city council to approve funding the purchase and installation of new remote controlled utility meters.
Addleton was joined by Rod Prince and Faye Ingram of City of Cairo Energy Services in making the case for the Advanced Metering Infrastructure (AMI) meters for electricity, gas, and water.
The city administrative staff and council have been considering investing in smart meters since 2009.
Addleton is not only promising the smart meters will make the city utilities more efficient, but will also dramatically reduce the city’s exposure for bad debt by reducing the time between when a meter is read and a bill is produced for utilities.
Currently, the city’s three full-time meter readers are reading just over 10,000 meters a month and it could be as much as 80 days between the time the meter is read and a bill is produced, and if not paid on time, the service disconnected.
With the new system, the city can remotely turn off the electricity to a customer and turn it back on, which would reduce the number of trips cutoff crews have to make to shut off service and then return to reestablish service once the bill is paid.
City officials say they average 4,000 cutoffs/cut-ons per year at an estimated cost of $120,000.
With the purchase of the new smart meters, Addleton says the city can eliminate two meter reader positions for a savings of $80,000 annually including salary and benefits.
The city staff says that the billing period can be made uniform whereas now the billing period ranges up to as many as 35 days of service in a single billing period. According to Addleton, it is when the billing period is longer that they see an increase in the number of complaints about high bills.
Even with the promise of reduced costs and improved efficiency, not all councilmen are on board with the city manager’s recommendation.
“You’ve showed me $206,000 of savings on a $2 million investment. There is only one fund that can pay for itself and that is electric. We’re going up $2 on fixed cost for water to pay for a loan we’ve got already. In the next year, are we going to have $2 more for fixed costs plus operational costs? It just doesn’t make financial sense to me. I like the idea and I know it works in some places, but it’s expensive,” Councilman James H. (Jimmy) Douglas said.
Douglas also predicts that the technology will make the system obsolete before the city achieves a payback on its investment.
“It’s like a computer. It will be obsolete by the time we pay for it,” Douglas said.
The city manager admitted he could not justify investing in the new gas meters when the city’s natural gas sales are so weak and the city has only 1,500 gas customers.
“But you can’t be half pregnant. If we don’t fully automate we can’t get rid of but one meter reader. We are going up on the cost of service on gas and hopefully that can go toward the new meters,” Addleton said.
The city manager said that the $350,000 budgeted for the new smart meters for the gas department is a “worst case” projection. According to Rod Prince, the city will retrofit many of its existing gas meters to reduce that investment.
Councilman Jerry Cox asked if the city manager would consider installing new water and electric meters and delay investing in the gas meters. Addleton said that would require the city to run two billing systems at once, which he did not recommend.
Councilman Douglas asked whether the installation of smart meters would provide an opportunity to reduce additional positions in the utility billing office. The city manager indicated that was a possibility in the future.
To finance the purchase of the smart meters and necessary infrastructure the city has been approved for a $1,189,645 loan from the Georgia Environmental Finance Authority. A full 40 percent of the loan, or $475,858, will be forgiven in the form of a GEFA grant to the city. The city will pay an interest rate of .5 percent on the remaining balance.
“Why consider this loan if the council is not willing to consider the new meters?” Mayor Bobby Burns asked Monday night.
The city manager said this is the first step and the city is not obligated to draw down the money.
“What happens if we don’t take the money and reject the loan at a later time as it relates to our relationship with GEFA?” Councilman Douglas asked.
Addleton said he could not answer that question.
“I don’t have a problem approving the loan. It will not be drawn down until the project is approved. I will vote for the loan, but I’m not sure I will vote for the AMI meters,” Douglas said.
“I will take what I can get tonight and worry about the rest later,” Addleton replied.
Thomas L. Lehman, attorney for the City of Cairo, noted that the .5 percent interest rate was too attractive to pass up.
“If we have to raise water rates to cover the debt service it may not be as good as it sounds,” Douglas responded.
The council voted unanimously Monday night to authorize the mayor to execute the loan documents.
The council also voted unanimously to introduce a budget ordinance to fund the proposed budget, which includes funding for the AMI meters, but Douglas noted he may vote against purchasing the new meters when it comes back before the council.
“It may be in the budget, but it will come back before the council before the money is spent, correct?” Councilman Cox asked and Addleton answered affirmatively.
Should the new smart meters be approved, the city manager says the new system would likely be up and operational by December 2017.

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