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Committee Hearing, June 14, 2010

Minutes from Philadelphia City Council Committee Hearings, Jun 14, 2010

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Names our system found in this transcript. Automatically extracted, so it can include anyone named in the record, not only officials or parties.

Organizations mentioned

Councilman Kenney

In what way? COMMISSIONER TOLSON: In terms of the advancement in technology, in terms of the benefit. The decrease in life expectancy, in turn the energy savings, all that together is not so dramatic, which is why we've been challenged so far, which is why we suggested that maybe this is still in its infancy and it's going to evolve more. We're with it. We're going to continue to evaluate that as it comes along, because we are not married to high-pressure sodium.

Councilman Kenney

I don't mean this as a criticism to the Department, because I think you guys do a good job, but the problem with 71 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 Philadelphia, in my experience in the 50 years or so I've been living here, is we never get up front on the infancy. We're always trying -- I mean, the stuff that we're dealing with now in environmental concerns and environmental issues, cities have been doing for and 30 years. I 9 mean, we just started five, six years ago 10 in dealing with our environment. I mean, 11 rather than wait -- we tend to wait and 12 see what's going to happen 15, 20 years 13 from now than getting in on the ground 14 floor and being a model as opposed to 15 being reactive to it. That's my -- I 16 don't mean it specifically in this area, 17 but in lots of areas. We just wait ten, 18 15, 20 years that cities have been doing 19 things and now all the sudden we're going 20 to get on board. I'd rather try to get 21 at the forefront of something than -- 22 because we'd probably be one of the major 23 cities -- only major city in the country 24 moving -- not moving -- not thinking 25 about it, but actually moving in that 72 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 direction, unless there's some other city that's way ahead of where we are now in the discussion. COMMISSIONER TOLSON: I think that you have heard that there aren't other cities that are doing it as yet, and there may be a reason for that, Councilman. It's just not quite there yet for this application. I think that some applications that are smaller in scale, they're great and I think at some point it's going to be ready for the curbside, but it's just not there yet.

Councilman Kenney

Plus the other issue that I think is very important to look in a forward-thinking way is creating manufacturing opportunities for our residents, which don't come around all the time, and I don't know of any other companies you're talking to that are making the offer to manufacture the items here in the City, which is something that doesn't happen all the time. So I would ask you to 73 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 think about that, take that into consideration, and really not just wait to see what happens, but maybe we can be more proactive in seeing how we get there. COMMISSIONER TOLSON: We can certainly do that, Councilman.

Mr. Doyle

Also, Councilman, the Department of Energy does have an extensive testing program in place for LED street lighting, and that information is kind of feeding back into the industry as well, and there's a lot to be learned from that. And so there are clearly other cities and test sites going on where information is already being gathered, and we can utilize that in our planning as well.

Councilman Kenney

And you're willing to make a test site -- allow the City to be a test site for this particular product?

Mr. Doyle

Given certain considerations in it, yes. The material 74 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 being donated to the City would then allow us to do that.

Councilman Kenney

Okay. Councilman Jones.

Councilman Jones

First of all, thank you for bringing this illumination to Council. I think it's important, because as we start to cite energy costs as a factor in our budgeting, $15 million worth of street lighting juxtaposing about 1,500 PECO accounts, which equates to about $64 million we spend annually with PECO as a municipality, it doesn't take a CPA to understand it starts adding up, and if we don't start the process of evaluation, selection and then replacement -- the sooner we get started, the sooner we start to save. Even if it's ten percent, even if the estimates are off, even if it's ten percent, that's a chunk of change that keeps a recreation center open. The other thing that I will 75 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 agree with the Chairman about is, we cannot be afraid to kind of look and make -- we can be ahead of New York on some things, God forbid, or LA or other major municipalities and come up with innovations. Where do we currently get our streetlights from?

Mr. Doyle

We purchase them at -- the Cobra fixtures, that's the standard streetlight in Philadelphia, is purchased from GE Lighting Systems.

Councilman Jones

And so locally?

Mr. Doyle

Where are they located?

Councilman Jones

No. Is the GE a locally based GE?

Mr. Doyle

Well, the --

Councilman Jones

We have a GE headquarters who used to be at 30th Street.

Mr. Doyle

They're located in North Carolina. The factory that 76 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 manufactures -- they have one factory in the United States and it's located in North Carolina.

Councilman Jones

That's not quite Philadelphia, nor the 4th District, but okay. My point being that it's important that we try to use our procurement prowess, power, purchasing power, to stimulate local entrepreneurship and create jobs here, which is a powerful incentive for me. So any demonstration, any beta testing that we can do now to start this process -- and I trust you to determine what is the best product, but I do remember when PECO came in here and told us that these 583 bulbs here would last ten years, I think we have at least half a dozen or so that are out now, and it's not been ten years.

Councilman Kenney

I assume they're under warranty, too. Some of them just don't function, may be a defect.

Councilman Jones

But the 77 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 point is that you're going to have this kind of beta testing process, and I think the sooner we start, the better, and why not be first as opposed to last as a municipality.

Councilman Kenney

Just one question about the Cobra lights. What's the length of the contract? Is there a lifespan of that contract?

Mr. Doyle

Well, we currently have the -- it's a one-year contract renewable for three years, and I think currently it's about halfway through the time period.

Councilman Kenney

How old is the contract overall? Not the current term of the contract. Was this a renewal?

Mr. Doyle

We've been --

Councilman Kenney

Because I've seen these lights on the poles forever.

Councilman Kenney

It's a 78 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 one-year contract with three year options.

Mr. Doyle

The Procurement Department bids this on a four-year cycle. It's gone back several cycles that -- we've been purchasing GE equipment for the past years. 9

Councilman Kenney

Do we ever 10 put it out for bid again? 11

Mr. Doyle

It's rebid every -- 12

Councilman Kenney

So it's 13 not -- okay. So it's a one-year contract 14 with three one-year options? 15

Councilman Kenney

And then a rebid?

Councilman Kenney

And they've won the bid?

Councilman Kenney

Has anyone else bid?

Mr. Doyle

There's other vendors who have bid. Procurement 79 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 actually runs the process, so we'd have to check with them exactly to see who the alternative bidders have been. But it's bid through a local supply house, so it's not bid directly from GE. The current contract is actually with Rumsey Electric, who provides the material.

Councilman Kenney

Councilwoman Brown.

Councilwoman Brown

What is your interface with the Department of Sustainability? And I guess the broader question is, what is the Mayor's practice, if you will, for department heads to interface with the Department of Sustainability as it relates to keeping up with technology? COMMISSIONER TOLSON: We work hand in glove.

Councilwoman Brown

So in the early part of your testimony you talked about how the Department does just that, try to stay ahead of or keep up with technology as it relates to the 80 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 efficiencies in your department? COMMISSIONER TOLSON: That's correct, Councilwoman.

Councilwoman Brown

Provide a couple of recent examples where as a result of your involvement with the Office of Sustainability, there have been clear management changes in efficiencies in the Streets Department. COMMISSIONER TOLSON: Surely. One big example is happening right now. We're going to have a fairly significant event around it. Is a conversion of our traffic signals to LED. Some years ago the Streets Department on the front end of technology but saw that it was going to be doable and successful converted reds to LED. In the intervening years, we were unable to convert the balance. Through work with the Office of Sustainability, their support with securing a grant and also a leadership in insight in terms of helping us press the issue, we're able to secure support to 81 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 get the greens and yellows converted as well as the reds to LEDs.

Councilwoman Brown

By "support," you mean financial support? COMMISSIONER TOLSON: Financial support.

Councilwoman Brown

Through grants that that office wrote, that the Office of Sustainability wrote? COMMISSIONER TOLSON: Yes. They helped us secure that, yes.

Councilwoman Brown

To better the efficiencies in your department? COMMISSIONER TOLSON: Yes.

Councilwoman Brown

So a model already exists. So fast forward to the discussion that we're having here today. Has your office and the Office of Sustainability looked at how eventually the capital improvement can or should be made to modernize our streetlights? COMMISSIONER TOLSON: I think that what's happening now is that we're staying on top of the LED streetlight 82 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 issue. As I mentioned, it even predates the Sustainability Office, but even now we developed a close relationship in working on the LEDs for the traffic signals. But we stay on top of this issue, but because of our present rate structure, we know what that is and we offer some advice to potential vendors about how things could work with that. But even still, with our future rates, as the Councilman noted, we don't know what that's going to be, and neither do our vendors. We could make some assumptions and build models around that, but there is some risk we're trying to build assumptions around that, but it's just understanding in our environment how can we make it work. We presently have a tap that clarifies some of the numbers. The utility costs are about 13 million total per year for utility costs. Of that, ten to 11 is what we call the tap, the connection fee, and the balance is actual electric usage. 83 6/14/10 - ENVIRONMENT/STREETS - RES. 100291

Councilwoman Brown

I see. COMMISSIONER TOLSON: So we've done some innovative things to try to reduce our tap costs, but we are working with what we are working with, and so is every other municipality. We're working in -- we use our energy in off-peak hours and we are currently negotiating what we are going to be paying for future energy. We're looking for what we're going to pay for our energy uses in the future.

Councilman Kenney

I'm sorry. Negotiating with who? COMMISSIONER TOLSON: We're negotiating with potentially other vendors.

Councilman Kenney

Other vendors of electricity? COMMISSIONER TOLSON: Yes.

Councilman Kenney

How many are there? COMMISSIONER TOLSON: I don't know that answer. I can get it for you. What the world looks like, I don't know 84 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 what the world looks like, but I can find that out for you. And as I mentioned earlier, we do intend to intervene on the rate case. So we are trying to do what we can in terms of the structure, and then also trying to be innovative and just staying out front. Our concern whenever we build any system is to try to build it so that it can be successful. We do test some things, but we don't like to test things if we know that there's significant amount of risk. It may be profitable for a business, but it may not be profitable for the City.

Councilwoman Brown

Sure. COMMISSIONER TOLSON: So we just try to get a little bit more assurance about where the technology is going and whether it's going to work, and right now this infrastructure is fairly expensive for what we may be getting. This is not a switch-out of a bulb. They used the example this is not a bulb 85 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 replacement. It is not. There was some comment that this is a proprietary system or parts of it were proprietary, which means that you can only buy it from one place. You can't bid it like we bid right now for a Cobra head with various people.

Councilman Kenney

But there's a downside of being able to bid it also, because you can't negotiate it. If it's sole source, you can negotiate it at least and get other benefits from it. The fear I have based on their testimony and what you know about the technology is that particular system may be LED and if you compare it to three or four other LED systems, they may not all be apples and apples. COMMISSIONER TOLSON: That's correct.

Councilman Kenney

It might be apples and peaches, but the problem is is that then where does -- the argument then comes, is it in fact sole source. 86 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 Because if there are six or seven patented bells and whistles on this that don't exist on any other competitor, you could argue -- whether or not the Law Department would agree or we would be sued by some of the other vendors -- whether or not that in fact is sole source, if they have a technology that the other companies do not have or employ and can't employ it because they don't have the patent on it. COMMISSIONER TOLSON: Councilman, as I mentioned, I have not met with this company, so I don't know what this offers, but we'd be more than glad to hear that, to understand what is so different about them versus the other competitors in the field.

Councilwoman Brown

Does your department have -- we are government. We're not major corporations, but it sounds like to me this falls under research and development. So does that exist any place in government or in the 87 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 Office of Sustainability? I'm asking. I don't know. COMMISSIONER TOLSON: Our research and development comes about through the knowledge of some of the people that we have in our department. For example, Joe Doyle, who is well-versed technically, research-wise, technically in the field of energy usage, streetlight energy, is well-versed, actually teaches courses in this industry. We have people like that. In traffic we have a guy named Charlie Denny. Similarly, these are -- I call them technicians -- people who are well-knowledged in the field.

Councilwoman Brown

Sure. COMMISSIONER TOLSON: So we depend on those type of people who are engineers with experience and who know the industry --

Councilwoman Brown

Sure. COMMISSIONER TOLSON: -- to stay ahead of things. It's my job as the 88 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 Commissioner to encourage them to engage new technology, innovation as a forefront of where we want to go as an organization, and that is important to us.

Councilwoman Brown

Thank you both for your testimony.

Councilman Kenney

Let me just sum up a little bit relative to the purpose today. I wanted to start this public conversation, which we've done and will continue to do. I would appreciate -- and I know you've offered already to do so. I would appreciate it if you would agree to meet with -- and you have agreed -- to meet with this company to see what's different about this particular product as opposed to the others that you've looked at already. And I also would like you to look at the possibility of doing something with an RFQ that would get responses from companies around the country on what it is -- how they see what's coming, both 89 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 from a technological advancement standpoint, from a rate cap removal standpoint, and have them put their best feet forward and see if we can't get at least a database of information to begin to expand the discussion a little bit, because I think an RFP certainly has other implications, but an RFQ is something you can gather information. Of course, the response won't be as in-depth as responding to an RFP or an RFI, but either RFQ or RFI would be an interesting process to see what kind of responses you get based on citywide phase-ins, what they feel they can save in the way of energy costs in the event that we have a different PUC construct. All those things I think would be interesting to start now, because within the next year, two years, 18 months is when everything is going to shift, and I'd rather be prepared -- and I know you are preparing to be prepared, but I would like to see what the private sector responds to in 90 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 the way of just an RFI or RFQ. COMMISSIONER TOLSON: Surely.

Councilman Kenney

Thanks. Is there anything that was put out there in the City Administration's testimony that you'd like to talk about or get back on the record? So, Commissioner and Mr. Doyle, I appreciate your testimony. Again, we want to continue to have this public conversation, but I would like to get them on the record again as to a couple things they may want to respond to so we have a clear record back and forth, not that one assertion is right and one is wrong. I just want to make sure that we have a clear record so we can have a discussion. But thank you for your attendance and your testimony. Gentlemen, if you want to come back. (Witnesses approached witness table.)

Councilman Kenney

Again, it's 91 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 tedious, but please identify yourself for the record again.

Mr. Bruck

Mike Bruck with IntenCity Lighting.

Councilman Kenney

Whoever wants to respond to what was said.

Mr. Bruck

The main thing I want to respond to is the lifetime --

Councilman Kenney

It's easier to respond here. I know you feel rude having your back to them, but the most important person in the room that needs to hear you is right up here.

Mr. Bruck

Okay. Is the longevity of LEDs versus the high-pressure sodium. One thing you have to look at is not just the bulb itself, but the system as a whole. The LEDs we've designed are basically more of a system. The LEDs will last 50,000 hours or more, again, designed properly around that with the technology. One thing that wasn't mentioned in this versus high-pressure sodium is 92 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 how temperature affects those things versus the LED. Typically very cold winters will shorten the life of an HPS bulb, vibration, those kinds of things. Those go away with LED technology. These things love the cold weather. In fact, the colder it is, the longer they last and the brighter they get.

Councilman Kenney

We don't like the cold weather. We don't like it --

Mr. Bruck

We don't have that problem in Dardanelle, Arkansas.

Councilman Kenney

Right, Commissioner, we don't like the cold weather, do we, especially when it's got snow in it? We had a bad winter.

Mr. Bruck

So there's variables there. Also is a system -- again, we're a totally sealed unit as far as the lighting system itself, so we're not getting the dirt and all that. We're not having the degradation of light as 93 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 time goes on just due to dirt and fume infiltration into the system. Also, one thing I didn't mention, which is also patented technology, is the photo control in these. Typically a Cobra head photo control is a twist-lock device that just sits on top, and that is one of the main failure points of a Cobra head system today. I don't know how you do it here, but a lot of cities, when they go out to work on a light, they will automatically change that photo control because it's fairly cheap and they know it's going to fail, so they just change it while they're there. Ours is a downward-looking solid-state photo control that is not sitting on top. We don't have the water intrusion problems with that. From a technical standpoint, it looks at a narrow band of infrared light rather than visible light to trigger it, which is a component of sunlight. Therefore, the 94 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 light itself does not turn itself back off. So it's looking at a totally different component of sunlight than we're emitting. And being as part of this sealed unit, we don't have bird problems, dirt problems, again, water intrusion, those kinds of things.

Councilman Kenney

How about bullet problems?

Mr. Bruck

We have tested that.

Councilman Kenney

Well, it's an issue, sad to say.

Mr. Bruck

It's going to be. It depends on the size and velocity of the bullet.

Councilman Kenney

Okay.

Mr. Bruck

Basically. BB guns, no problem. It will withstand it without a problem at all. Twenty-two's most likely will withstand. You go up above that and it's going to be where you hit it kind of thing.

Councilman Kenney

Right. I 95 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 understand.

Mr. Bruck

Vibration, with this being all solid state, is not an issue at all.

Councilman Kenney

Okay. Anything else you want to add just to finish up or are there any other items that you want to touch on that were touched on by the Streets Department?

Mr. Neely

One of the issues that we'd like to talk about is in the documentation that we prepared for you, we did some comparisons. Those are based off of assumptions that we had off of very limited documents just to get this whole thing going. So those numbers we can sharpen up as we move into further discussion and have more access to that information. The other side of it is that the biggest thing that we have to all remember here is that we're talking about apples and oranges. It couldn't be more different than the two technologies. 96 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 They're all meant to do the same job. The technologies are incredibly night and day different. The benefits of each are great. Some are greater than others, and the LED is definitely the way that we are moving forward. I've worked personally with PP&L over the last three and a half years to get them to commit to a rate structure that allowed for LED lighting to their municipalities. That was just filed on March 31st with the PUC. The PUC had no problems with it. The rate case itself did go back, not relevant to the LED portion, but the rate case itself did go back for further discussion, and July 1, I believe, is the next vote date on that. January of the following year would be the --

Councilman Kenney

I was not aware until the testimony of the Streets Department that two-thirds of the $15 million is the privilege of plugging into the system. So, I mean, again, that's something maybe I don't know if you knew 97 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 in your calculations on energy savings, which again cuts it down to a third right now. It doesn't mean that won't change. With the PP&L one, was that a similar situation?

Mr. Neely

With PP&L, they --

Councilman Kenney

Where they weren't giving the municipality credit for energy savings?

Mr. Neely

PP&L's agreement with their municipalities by sound of the testimony today -- and I haven't looked at your agreement with PECO, but PP&L's agreement is quite a bit different than that scenario. If you don't mind, I'd like to let Peter answer that. He's a little more versed in that.

Councilman Kenney

Sure. Please identify yourself.

Mr. Wernsdorfer

Right, restate my name. Peter Wernsdorfer, Municipal Streetlight Services. There were a couple of things, Councilman Kenney, if I can go back to 98 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 it. One of the things I brought up is this issue of configuration. What's germane to the discussion is that while there may be 108,000 area lights inside the City, I don't think anybody is advocating replacing every one of them. I mean, there's some applications where LEDs aren't going to be applicable, and I don't think anybody is thinking about that. But the issue of configuration comes to mind, because specifically because of the -- and, yes, I was aware of that. That's one of the reasons we ran our model the way we did. We work in a number of the different utility territories in the state and we're quite familiar with how the utility companies approach it. So the issue of configuration leads you to the point where you can use appropriate lighting to use the cost of removing fixtures. Just say you took 10,000 -- you have 108,000. Say you took 10,000 of them and you had $7 a month. Right there you're saving -- 99 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 that leads you to some serious capital to put into LED. And when I said it yields immediate results, that's specifically what I was trying to address.

Councilman Kenney

Okay.

Mr. Wernsdorfer

So I appreciate the chance to just clarify that for the record.

Councilman Kenney

So your testimony was with knowledge of the current rate structure?

Mr. Wernsdorfer

Yes, sir. Oh, absolutely, yes.

Councilman Kenney

Well --

Mr. Wernsdorfer

And -- I'm sorry, not to interrupt, but we do look forward to having the discussions with the Commissioner and Mr. Doyle to move that forward.

Councilman Kenney

The two things --

Mr. Wernsdorfer

A lot of information to be exchanged.

Councilman Kenney

I guess the 100 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 two things I would ask you guys to do -- and you've heard this, but just formally, is to again meet with them and also try to determine what is the best kind of demonstration street that you could help us with in taking a look at.

Mr. Wernsdorfer

Absolutely.

Councilman Kenney

And you're willing to do that?

Mr. Neely

Yes. We'd like to look at some of your worst-case scenarios actually and see what we can do to make those. If we can make your worst-case scenarios much better, then we're very confident --

Councilman Kenney

I think we'll have to bring the Police Department in for some advice on that one. So that might be helpful if they could give us an idea of what their needs are, too. So that's an agreement, and then we can move forward from here and hopefully we can have either another hearing or some other discussions on 101 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 this.

Mr. Neely

Absolutely.

Councilman Kenney

Is there anyone else to testify on this resolution? (No response.)

Councilman Kenney

Is there anything you gentlemen need to add? (No response.)

Councilman Kenney

Thank you very much. We enjoy having hearings we actually learn something, which there's a number of issues that both from you guys and the Streets Department this Committee was illuminated and it will be in the forefront going forward. So we do appreciate your time and your testimony and for coming in and everybody's attendance. Thank you. That will conclude the business of the Committee on Environment and Streets and Services.

Mr. Neely

Thank you. (Joint Committees on the 102 6/14/10 - ENVIRONMENT/STREETS - RES. 100291 Environment and Streets and Services concluded at 3:45 p.m.) - - - 103 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on June 14, 2010, and that this is a true and correct transcript of same. -------------------- MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)