NW Energy plans to replace street lights; Missoula City Council not sold on benefits

NorthWestern Energy plans to replace 1,800 lights within the city of Missoula with LEDs as part of a project that will swap 43,000 lights across the state. But members of the Missoula City Council are skeptical, saying the project’s $24 million cost will be passed on to ratepayers. (Martin Kidston/Missoula Current file photo)

Members of the Missoula City Council remain skeptical of NorthWestern Energy’s plans to convert more than 1,800 street lights in the city to LEDs, saying the project’s costs could lead to a future rate increase and have little impact on Missoula’s lighting network.

NorthWestern will begin the work next year as part of a larger $24 million project to retrofit 43,000 high-pressure sodium lights across Montana with LEDs.

“There’s two primary reasons for approaching this project in the manner that we are,” said Rick Edwards, director of community connections for the utility. “First and foremost is the energy savings. Secondly, many of the distributors are no longer, or are getting away from, providing high-pressure sodium lights.”

Edwards said the LEDs use 50% less electricity and last two or three times longer than their sodium predecessors. NorthWestern owns 1,800 street lights in Missoula and roughly 600 lights in Missoula County.

Calling it a “like for like” replacement, the conversion would replace the utility’s existing light fixtures with a similar fixture equipped with LEDs. Once the conversion is made, NorthWestern expects customers will see savings on their monthly bills.

“For the city of Missoula lights – those 1,800 lights – we’re projecting the savings to be about 718,000 kilowatt hours a year,” said Edwards. “At today’s rates, that would equate to about $79,000 per year. There is a fairly significant savings for the customers from a supply perspective.”

Customers in the county would save 156,000 kilowatt hours a year, or roughly $17,000, he said.

“There are no upfront costs to the city or county, but you or your customers would see the immediate savings,” said Edwards. “There would be the reduction in the supply piece of their bill.”

While members of the City Council lauded the project for its reduction in energy use, most remain skeptical of the project, including concerns over light trespass, or compliance with the city’s dark skies ordinance.

NorthWestern has not yet guaranteed that its fixtures would comply with city ordinance.

“Dark skies compliant and light trespass are serious issues,” said council member Brian von Lossberg. “We do not want to move forward in a spirit of partnership or trust only to find issues along that front.”

The energy company also is expected to seek a future rate increase from the Montana Public Service Commission to pay for the project.

Sarah Norcott, an attorney representing the company, said the utility hasn’t requested a rate review for electricity costs in 10 years. And while it doesn’t plan to seek that review next year, it could do so shortly after.

“As a fully regulated public utility, we’re entitled to recover our costs prudently,” she said. “We’re estimating this to be a four-year project, starting this year. There’s no guarantee that the entire project would be complete before we go back to the Montana PSC.”

While NorthWestern won’t add the project’s upfront cost to its existing rates, the likelihood of a future rate increase has raised questions over the project’s value.

As it stands, council member John DiBari said, the city and NorthWestern customers have little say in how the utility structures its rates, or how the PSC allows it to recover costs.

“It’s hard to separate the lighting piece of this from the corporate piece of this,” said DiBari. “I’m hopeful we can figure out a path forward where the citizens of Missoula, and every other community, are getting a better deal in their relationship with NorthWestern Energy than they’re currently getting.”

Norcott described the process of setting rates as a complex formula guided by state law. Rates must be “just and reasonable,” she said.

“There’s another law that says we have to pursue the least cost resource,” she added. “We have a lot of overview of what we do, and we’re always looking out for the best interest of our customers.”

DiBari questioned the project’s value, saying it lacks a strategic approach.

“To charge forward with this in Missoula is probably not the right thing to do until we have an opportunity to strategically look at the kind of lighting we want to do in the community and create a mechanism for local control of that,” he said. “It’s important for us as a community to consider whether we’re in control of all the lights in the city.”