Street light costs skyrocket
The skyrocketing cost of lighting city streets is the result of Ontario Energy Board (OEB) rate changes, city councillors were told Monday.
Street lighting costs are budgeted to increase to $645,500 next year, an increase of 41% since 2009.
"(The OEB) went through and looked at what all the costs were to the local distribution companies and they decided that of the money they spend every year, including the infrastructure, that municipal street lighting was getting a sort of holiday at the expense of other hydro users," Peter Dance, director of public works, said about the rate change.
The cost of street lighting now represents about 1.5% of Orillia's tax roll.
The increased rate charges were factored into the public works budget starting in 2010, with municipalities expected to pay 70% of the OEB's estimated costs by 2012.
Councillors Don Jenkins and Patrick Kehoe both questioned whether implementing new technologies would save the city money in the long run.
Under the new OEB rules, the number of connections, not the amount of power used, has the greatest impact on cost, explained Bob Ripley, deputy CAO and chief financial officer.
"Anytime we are retrofitting or replacing now, we are using LEDs (light-emitting diodes)," Dance said, noting that other street lighting technologies haven't shown results in the past. "A lot of this cost we are going to see whether we use a little bit of energy or a lot. We are in the middle of investigating exactly how many connections we have and where they are because that is the biggest change."
While current budgeting measures bring the municipality's contribution for street lighting to the required 70% of the OEB's rate, there is a chance that cost will continue to grow.
"There is a potential when Orillia Power goes back for another rate adjustment, that they will be forced to get closer to 100%," Ripley said.
The Association of Municipalities of Ontario (AMO) is actively reviewing the modelling used to adjust what municipalities pay, he noted.
"AMO suggests that these increases were an example of rate shock that should be avoided," AMO president Peter Hume wrote in a letter to OEB. "In the future, both the OEB and (other bodies) should take greater strides to communicate potential rate impacts to consumers so that they can budget appropriately." The public works department requested about $19,542,000 for 2012, a 3% increase over last year's budget.