LEDs a Step Closer in Powercor and Citipower Areas

June 2013
Ross McKirdy

Victorian councils in the Powercor and Citipower distribution network areas have received a letter from the distribution business stating that they believe LED technology is now ready to be used in residential street lighting. Feedback is sought from councils regarding this option (specifically in the use of non-standard LED lighting). 

This is no doubt exciting news. LEDs genuinely have massive potential as a financially viable energy efficient alternative, but there have been many hurdles along the way, as we outlined last year.  

There is, however, still a little way to go. The information from Powercor/Citipower does not demonstrate a clear comparison between current energy efficient options (the 2x14W T5 and 32W CFL) and there are some questions around maintenance and replacement charges which will need to be considered to decide which options are best for each council.  

We've had a few dozen councils contact us for our take, so we sought and obtained the following clarifications from Powercor/Citipower that may assist.

The Powercor/Citipower Offer

Firstly, it's important to stress that the LED option has not been approved, and therefore is unlikely to be an option for councils going ahead with bulk replacements in the short term. For example if you have funding (eg, CEEP) then you may be constrained by milestone deadlines. For now, Powercor and Citipower are simply seeking feedback. However it does suggest that the approval of an LED option is close.

The annual Operating, Maintenance and Replacement (OMR) fee CitiPower/Powercor has outlined ($17.12 in Powercor and $21.94 in CitiPower) includes:

  • Bulk PE Cell changeover (8yrs)
  • Luminaire inspection for damage and visor cleaned and minor repairs completed. (This may include visor replacements, broken/missing clips and tightening of bolts etc as required)
  • Pole inspections including visual observations of any damage or performance impediments to the luminaire. Any observations that require attention would be actioned as part of Powercor/Citipower's maintenance program included in the OMR price. Note this inspection cycle would vary depending on non fire / fire areas.

 However, the OMR fee does NOT include:

  • LED module (i.e. the lamp) replacements
  • LED driver/control gear replacements
  • Full luminaire (i.e. the entire fitting) replacements
  • Cleaning of the luminaire

This means that, with the exception of PE cells replacement, visor cleaning, pole inspection and minor repairs, any maintenance or replacement costs would have to be paid by council in addition to the OMR charge.

Lastly, if an existing luminaire is being replaced, council would be liable to pay the Written Down Value minus the Avoided Costs associated with the luminaire being replaced. These values are regulated and non-negotiable and would also apply to any bulk luminare changeovers (eg, T5s and CFLs as well). Note that the purchase and install cost of $500 to $550 ex GST is similar to costs previously suggested by CitiPower and Powercor

Key Points for Councils to Consider

Before making any decision, councils should consider the following key points:

  • the reduced energy consumption of the LED
  • the higher upfront capital cost of the LED luminaire compared to existing, approved energy efficient replacements (i.e. T5s and CFLs)
  • the on-going cost of luminaire and lamp/module replacements being the responsibility of council

Recommended Approach

If you're interested in an LED option then we would certainly suggest you respond by indicating your interest to Powercor or Citipower. However we would suggest you do not accept any offer without first obtaining a detailed financial and risk analysis of any formal proposal. As is often the case, the devil is in the detail, and you don't want to left carrying more risk than you bargained for. 

We can provide this analysis in the form of an updated business case that includes a comparison of any LED option with the existing approved T5 and CFL options for council consideration. The release of this information by CitiPower/Powercor meansthis analysis can be done now.

If you would like assistance or just have questions or concerns you want clarified then please contact us.