Claremore Daily Progress
July 25, 2013
GE meter service could save city $1M in lost revenue
The City of Claremore is considering a proposal from General Electric to install a smart meter system through Claremore Electric.
GE representatives presented the system benefits Monday to the council.
The system has an estimated monthly cost of $80,000 and would include the replacement of water and electric meters for all customers.
As a benefit to the city, the expense of the system is projected to be less than the cost-savings, creating a revenue neutral item for the city.
Essentially, the $80,000 monthly fee would be paid as a result of an increase in electric revenues.
Currently, the city reports that Claremore Electric is losing revenue from meters that incorrectly record data.
For example, a sample of meters revealed that some customers are not paying for their entire monthly usage of electricity and/or water.
The cause for the loss of revenue is due to faulty meter devices, aged equipment or even theft in some cases, according to city officials.
The new system would accurately record all usage for both residential and business consumers, according to GE representatives.
This means the city will see an increase in revenue, offsetting the cost of the monthly fee to GE.
For customers, they could see an increase in their monthly bill if their meter is not working properly.
This translates into customers paying for actual usage, according to city officials.
The tests, conducted by the City of Claremore and evaluated by GE, revealed on average that customers are not paying for all the power or water they receive.
The total estimated savings for the city is anticipated to be about $1 million annually; however, this does not include the internal savings on operations.
The city could save an additional $400,000 annually through a reduction in workforce, fuel expenses, vehicle maintenance and other operational costs.
These funds could be used to make repairs to infrastructure, according to Claremore City Manager Jim Thomas.
Additional benefits include the systems automated controls for consumers.
Claremore Electric customers will have the ability to monitor usage via the Internet or on smart phone devices.
They will be able to prepay for utility services and budget according to daily usage if desired.
The city will get the benefit of debt reduction from these services and will save man-hours, as meters will be able to be remotely disconnected for nonpayment.
Another benefit is outage detection, according to Claremore Electric Director Larry Hughes.
Hughes reports that the current system is timely and costly when outages occur.
Employees must hunt for the location of an outage and often times service is complaint driven.
The GE system will provide detailed precise outage information allowing employees to pinpoint a problem and resolve the issue faster, according to Hughes.
GE has proposed the system based on a 10-year contract, including all maintenance on the approximately 19,000 meters that will be installed.
The city’s meter replacement budget is about $6,000 a year and meters can be anywhere from new to 30 years in age, according to Hughes.
The cost to install new meters without the GE service would be in the millions, he added.
The new meters will eliminate the use of outdated equipment, saving the city from a substantial loss in revenue, according to Hughes.
The system will be operation in six months, if the council votes to purchase the service.
City officials appeared enthusiastic during the meeting; however, several council members wanted more financial information before making a decision.
No vote was taken and it has not been released when the contract will be up for further review.