UCM renegotiated the utility's sale price for streetlights, saving the city $697,000.
Rate and Regulatory Consulting
The Full Story - UCM evaluated a proposed $10 million streetlight purchase for a city.
For many decades, more than 96% of the streetlights in a large city were owned by the local electric utility. In 2016, the utility offered to sell more than 17,000 of these streetlights to the city. UCM was hired to evaluate the pros and cons of the streetlight purchase and report its findings to the City Council.
UCM analyzed the purchase from every angle, starting with a breakdown of the utility’s valuation that resulted in a proposed sales price of more than $10 million. UCM reviewed the utility’s testimony and workpapers from prior regulatory filings to assess the correct streetlight valuation and depreciation methodology, identified a discrepancy in the utility calculations, and negotiated a $687,000 reduction in the price. UCM’s report also addressed how to deal with ongoing streetlight maintenance, the expected reduction in electricity charges once the lights were purchased, potential “smart city” applications, and possible risks.
In large part based on UCM’s findings, the city elected to proceed with the purchase and is reaping the benefits of that decision to this day.