This post was written by Keith Dawson for UBM Tech’s community Web site All LED Lighting, sponsored by Philips Lumileds. It is archived here because the All LED Lighting site has gone dark. This material is Copyright 2013-2015 by UBM Americas.


How a Street Light Replacement Project Goes Wrong

The city of Chattanooga, Tenn., signed with a local company, which had moved its factory from China, to replace 27,000 street lights with LEDs. Then things got weird.

We have seen a couple of instances where a local utility has appeared less than enthusiastic about the prospect of upgrading street lights to more efficient LEDs. In many cities, suppling street lighting represents the utility's largest project -- and often the largest single contributor to its income. Saving 40% or 60% off the electric bill might look quite appealing to a city, but it could look less so for the supplier, which may have to scale back and lay people off because of lost income.

Chattanooga's journey to LED street lights has been a twisty one, and the final chapter hasn't yet been written. The city prides itself on its inventiveness and boasts of having built one of the few municipal fiber installations in the country where anyone within 600 square miles can have gigabit-per-second Internet service if they want it. (Chattanooga was years ahead of Google Fiber.) We were introduced to Chattanooga's energy supplier, EPB, last summer.

Global Green Lighting (GGL) won a contract in 2012 to replace the city's street lights with smart -- no, make that "brilliant" -- lighting tied into EPB's fiber. GGL pulled back its China operations into a 180,000-square-foot (16,700-square-meter) factory in Chattanooga and set to work. The first phase (for one-fourth of the lights) was completed by October 2013. The city council had imposed a rule that required an evaluation of this phase before committing to the rest of the rollout.

That evaluation was supposed to be completed in January but has now stretched out into May amid rancor and finger pointing. The counter-party is the electric utility, EPB, which has been supplying Chattanooga's lighting for decades. GGL accuses EPB of trying to undercut its contract because it is losing the work. EPB counters that profit doesn't enter into it, since it simply passes on the cost of lighting to the city.

The conflict heated up when the city ruled that GGL does not have the certifications necessary to go up on EPB's light poles and install new lighting. The installation job fell to EPB itself, which surprised the city and stunned GGL by laying down a $2.8 million price tag for the work.

This unexpected expense, among others, has pushed out the payback period for the project to 15 years. The city is now demanding a 15-year warranty on the lights, which were designed around a target of eight years.

Green light?
For its part, GGL is demanding a go/no-go decision from Chattanooga by April 15 -- a date the city says it cannot meet. GGL is threatening to pull up stakes and move its factory to Memphis, Tenn., where negotiations for a citywide project are ongoing.

The reason Chattanooga hasn't completed its evaluation of the first phase boils down to its getting flooded with conflicting data from GGL and EPB. How many lights have failed in the initial installation? Twenty percent, says EPB. Ridiculous, counters GGL, since many of those failures were in fact EPB's old lights. For technical reasons, EPB hasn't been keeping pole-by-pole records of energy expenditure, complicating the calculation of energy savings with the LEDs. And so on.

What we're seeing play out in Chattanooga is a textbook example of how not to get your street lights modernized. GGL's future is on the line, and Chattanooga's carefully cultivated image as an innovator could be tarnished, along with EPB's.

Many if not all of the problems in Chattanooga could have been avoided if the parties had sat down and talked, early and often. Ambition, both political and commercial, may have caused them to cut corners in the process. That was never going to work.

— Keith Dawson Circle me on Google+ Follow me on Twitter Visit my LinkedIn page, Editor-in-Chief, All LED Lighting

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