How Victorian Councils Just Saved $22 Million on Street Lighting

Alexi Lynch

In July 2015, Ironbark Sustainability was engaged by Victorian councils to submit a response to the Electricity Distribution Price Review* (EDPR) on behalf of the Local Government sector. Fast-forward a few months and the Australian Energy Regulator (AER) has just passed down its preliminary determination on electricity prices and the results are quite staggering. 

A review of the five separate determinations indicate a total minimum streetlight OMR saving across the state of around $22 million over the next 5 years that can are directly attributed to our submission. Yep, $22 million coming off your OMR bills over the next 5 years.

The submission was lead by the Eastern Alliance for Greenhouse Action (EAGA) and the Northern Alliance for Greenhouse Action (NAGA) and provided a technical analysis and evaluation of the five regulatory pricing proposals provided by Victoria’s electricity distribution businesses (DNSPs). The objective was to capture cost savings for councils through public lighting charges and supporting innovative initiatives that reduce emissions. The full submission can be accessed here.

$22 Million. 5 Years. Just like that.

The $22 million savings only refers to reductions that can be directly attributed to our submission, and only includes the following key lighting types;

  • 80 Watt Mercury Vapour
  • 150 Watt High Pressure Sodium
  • 250 Watt High Pressure Sodium
  • 2x14 Watt "T5"
  • 18 Watt LED
  • 32 Watt CFL

If we were to add in the other mercury vapours, low pressure sodium and metal halide lights the savings would be even higher!

Savings from public lighting are not evenly distributed and vary across distribution region and technology type. For example, in the Jemena DNSP area, Jemena’s proposed OMR for a 2x14W “T5” light for 2016 was $53.97. Our submission alone has reduced the price by $17.73 per light. With other savings, it is down to $32.03.

There were no savings identified in the Ausnet Services region however it should be noted that these councils will benefit from an earlier LED OMR negotiation in 2014 where Ironbark worked with the MAV and a group of councils to secure costs reductions of up to $6 million.

Want to find out how much your council has saved through this work? Download our Calculator!

You can download our EDPR Savings Calculator here

Then simply type in the number of lights you have in each distribution area and presto! You can find out how much your council has saved.

For more detail on how we derived these figures please get in touch.

What else do I need to know?

Firstly, we’d suggest a quick email or call to Scott McKenry from EAGA and Rob Law from NAGA to thank them for initiating and managing this work. The sector should also be grateful to the councils that provided funding for this research and submission to go ahead. The savings are truly enormous and if there weren’t a bunch of councils prepared to contribute a small amount of budget in July this year then Victorian councils would be paying an extra $22 million in street lighting maintenance. Next time the alliances ask for councils to chip in for these projects make sure you answer the call – the overall return on investment for this advocacy work has been around ~2,200% so we think it’s money well spent.

Secondly, the proposal to move dedicated public lights to a “negotiated framework” was also rejected by the AER, based on advocacy by councils as we reported earlier.

Thirdly, this decision from the AER is not final. All stakeholders have a second opportunity to respond to the AERs determination through a second submission processes (due 6th Jan 2016). This is likely to be a short submission, addressing a few anomalies in the AERs decision, which could generate additional savings for councils in the United Energy and Ausnet regions. Following this consultation, the AER will revoke its preliminary decision and substitute it with a final decision to be published by the end of April 2016.

* What is the EDPR process? 

Under the National Electricity Rules, the AER conducts a pricing review for electricity distribution every five years. Through the EDPR, the regulator determines the prices the network businesses can charge for safe, reliable electricity supply to their customers. The current pricing period expires on 31st December 2015. This includes setting the operation, maintenance and replacement (OMR) charges for street lights where even minor changes can have significant cost implications for councils. The outcomes of the determination process also impact ability of the distribution business to undertake distributed energy or demand management projects, which can be implemented in partnership with councils. The AER released their preliminary decisions on each of the 5 Victorian distribution determinations for the 2016-20 regulatory control. To access or download the relevant determinations first go to the AER website and then choose a DNSP (for example the "Jemena - Determination 2016-20"). Then click on the "Preliminary Decision" on the left hand side and scroll to the Public Lighting decision in Appendix 16.