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City stamps LED agreement with NW Energy, but not without reservations

While the city of Missoula will save nearly $80,000 in annual electrical costs after NorthWestern Energy converts its street lights to more efficient LEDs, aspects of the agreement continue to vex members of the City Council.

On Monday night, less than a week after moving the agreement from committee, council member Heidi West voted against it. She was joined by Jesse Ramos in billing the agreement as less than ideal.

“While I’m excited about an upgrade to LED technology, I’m really against this for two reasons,” West said. “I don’t think it’s the best financial way of funding our lighting districts.”

Members of the council have expressed concerns over the districts and the lights within them, including the lighting quality and the location of the lighting poles.

But their concerns run deeper and fix on costs, which will likely increase in subsequent years as NorthWestern looks to recover the estimated $24 million expense of its statewide upgrade to LED technology.

“When we discuss this upgrade, we are always discussing savings at current rates and there’s no guarantee these rates are going to stay the same,” said West. “NorthWestern considers approaching the Public Service Commission on an annual basis, and I foresee them approaching the PSC because they’ll have to recoup their material costs for these upgrades.”

During last week’s hearing, city staff also expressed concern. Among them, the lighting districts have grown obsolete and the city has already paid for them many times over.

“Our takeaway from this is that we’d be better off doing our own lighting, and owning and maintaining it ourselves,” Public Works Director Jeremy Keene told council members last week. “That way we can recapture the cost to install lighting and we don’t have to pay it back multiple times over time.”

West on Monday said an independent analysis determined that the infrastructure payoff would be as little as two or three years. But the city would continue to pay the same rates long into the future, even after the infrastructure had been paid for.

West also expressed concerns over equity, saying the state’s larger cities would benefit at the expense of Montana’s smaller and more rural communities.

“Rates are set on a statewide basis and as we’re transitioning to LED, there are communities who are going to be lighting behind,” said West. “When those rates are reassessed, folks that have not been upgraded to LED fixtures will see increased rates without the increased efficiency.”

Council member Jordan Hess didn’t disagree with West’s concerns, though he and a majority of council members lent their support to the agreement with the utility.

“I think this is an imperfect deal, but I think it’s a better deal than we have now,” said Hess. “The energy savings that comes along with this conversion project are a net win overall, but it’s not without sharing some of her reservations.”