The City of Yakima (City) began a City-wide effort in upgrading its high-pressure sodium street lights to LED in order to provide the community higher quality lighting, enhanced security for our residents, reduction in crimes of opportunity, and the reduction of energy and maintenance costs by 50% to 60%.

The City entered into Agreement No. 2017-142 A (1) with the Washington Department of Enterprise Services (DES).  The City then selected Ameresco, a contractor providing services to DES, to provide a detailed audit of the City’s lighting system, cost estimates and project performance and management.  Approximately 4,700 lights were to be upgraded.  The project began in May, 2017 with the anticipated projected completion date of December, 2017.  The project was estimated to cost $2.4 million.

Approximately halfway into the project, it became known to Ameresco and the City that there was an issue involving Washington State Labor and Industries (L&I).  L&I advised the City and Ameresco that full compliance with National Electric Code requirements would be required for all work performed on all Utility-owned poles and all City-owned wooden light poles and that each of the poles would need to have a service disconnect device installed between the transformer and the light fixture.  Pacific Power owned 1,400 wooden poles and the City owned approximately 900 wooden light poles.  Compliance with the L&I service disconnect requirement would add significant time and an additional $1.7 million to the cost of the project.  The project came to a complete stop.  The parties to the lighting contract began extensive negotiations to attempt to resolve the installation issues and determine how the additional costs would be allocated.  It was the City’s contention that if a detailed audit had been conducted by Ameresco, as required by the contract, the L&I issue would have been identified prior to the start of the project.

At the end of April, 2019, HB 1594 was signed by the Governor, eliminating L&I’s regulatory authority over utility poles owned by Pacific Power.  This meant that no disconnects were required on the utility-owned poles.  This legislation saved a significant amount in additional installation time and costs from those originally projected for the L&I compliance.  However, L&I still remained the control authority over the wood utility poles owned by the City, still requiring service disconnects and ground wire installation work for those poles. 

Ameresco submitted an estimated additional cost of $1,011,420 for the installation of service disconnects and grounding conductors for approximately 900 City-owned poles.  This additional cost is associated with the L&I regulatory requirements determined to be necessary for completing the lighting installation on the City poles.  This cost in addition to the original cost of the project outlined in the City of Yakima’s agreement with DES.  Through extensive negotiations the additional cost to the City was reduced to $579,749.  Furthermore DES, through an Interagency Amendment, has waived their Project Management Fee in the amount of $60,000 to assist in reducing the financial burden endured by the City. Applying the DES reimbursement of its fee to the total additional cost to the City to complete the LED Upgrade project, the total additional cost to complete the project and therefore to realize the full energy cost savings the project will provide is further reduced to $519,749.

Attached to the Resolution is Change Order No. 1 and Interagency Amendment for City Council review.  The remaining project is scheduled to be completed by October 2020.  The City will issue a bond for the cost of this project using recognized energy savings to help offset the annual debt service.  To expedite the completion of this long-delayed project and get the contractor back to work without further delay, the Change Order and Interagency Amendment were signed ahead of the next City Council meeting and are now submitted for City Council ratification.