Borough of Poole. Transportation Services. Business Case for Investment in Street Lighting

Transcription

1 Borough of Poole Transportation Services Business Case for Investment in Street Lighting 0

2 Transportation Services Business Case for Investment in Street Lighting Contents 1. Executive Summary page 1 2. Strategic Fit page 2 3. Business Need Page 3 4. Existing Arrangements page 5 5. Project Scope page 7 6. Financial Appraisal page Procurement Options page 22 1

3 1. Executive Summary The purpose of this business case is to: Highlight the issues due to the condition and age of the Borough s Street Lighting stock and Highlight the savings that are achievable from the implementation of LED lighting in the Council s Street Lighting stock. Present a costed project that, while funding LED and column replacement, will also generate savings that can be incorporated into the Council s forthcoming MTFP refresh Respond to a motion submitted to Council in April 2014 requesting investigation into LED technology for street lighting 67% of the street lighting infrastructure in Poole is currently aged beyond its design life of 25 years. There is a history of chronic underinvestment in street lighting throughout the country. The budgets currently available for the replacement of lighting columns are very limited and only allow us to replace approximately 1% of our column stock every year. Therefore, the condition profile of our lighting column stock is deteriorating at a faster rate than replacement is taking place, resulting in increased risk of column failure. Although the majority of the older columns are of concrete construction there are still risks associated with the metal columns which have been installed thereafter. Between February and March 2014, a total of 36 steel columns failed structural tests and had to be removed immediately for safety reasons. A breakdown of the age profile of the street lighting stock is shown in Appendix 1, Table 1 As well as the age issues with our column stock, another is the increasing pressure on our revenue budgets. A particular area of concern is energy costs for street lighting that have more than doubled in the last 10 years. The cost of energy is expected to steadily increase in future and some suggestions propose that this could be at a rate of 5% to 6.5% per year. Calculations using a more conservative increase of 2.5% per year (in line with long term expectations for RPI increases) suggest that by continuing to rely on existing lighting technology, the Borough will have to find an additional 12.8m to cover energy increases in street lighting alone over the next 30 years. The 2.5% assumption is consistent with the bottom of a range of forecast energy price increases supplied by the Council s Energy consultant for the next 30 years. It also reflects the possibility that, over such an extended period of time, changes in technology and the discovery of new sources of energy may mitigate the type of price rises experienced in the last few years. In addition policy changes on the part of central government may also affect future energy price expectations. Street lighting accounts for approximately 25% of the Council s total energy consumption and, as the Borough of Poole is committed to reducing its carbon footprint, street lighting is an area where potential savings need to be considered. 2

4 Various options have been considered for energy reduction in street lighting including part night lighting (which has been introduced in selected areas on a trial basis) and dimming of lights. The wide scale introduction of energy efficient LED lighting, incorporated into a programme of increased investment in lighting column replacement is considered to be the best option to provide a solution that will not only achieve significant energy and cost savings but also deliver a better quality street lighting operation to the residents of Poole. This would involve the replacement of most life expired street lights in the Borough with new lighting columns complete with LED luminaires and the installation of LED luminaires on the remaining columns. The project is based on the cost savings accrued on an annual basis (due to a reduction in overall energy consumption) along with the cost avoidance achieved in relation to projected increases in energy rates being reinvested into further column replacement in subsequent years. There are a number of options available, including the addition of further monetary resource by way of financial borrowing in an effort to accelerate the rate of column replacement and therefore the rate at which savings in energy reduction and cost avoidance are accrued. The Street Lighting Energy budget for 2014/15 is 718,180 (section 4). The Street Lighting Maintenance Budget for 2014/15 is 526,020 (section 4). As a result of efficiencies in the running of this contract, savings of 90,000 per annum have been identified on this budget. At this stage it is assumed that this saving will not be used to fund the Street Lighting programme but will instead feed into the forthcoming refresh of the Council s MTFP (2015/16 to 2018/19). The expected impact of the preferred option on the Council s revenue account for the period of the 2015/16 to 2017/18 MTFP is as follows: Table 6.2: IMPACT OF STREET LIGHTING PROPOSALS ON REVENUE ACCOUNT, 2015/16 to 2019/20. Net Pressure/(Saving) Option 2016/ / / / /21 Option 02 Replace a mixture of 17,420 columns & lanterns (231,611) 28,745 18,246 13,098 21,068 Pressures = energy price increases & Prudential Borrowing Repayments. Savings = reduction in energy consumption as a result of either part night lighting or the introduction of LED lighting. 3

5 2 Strategic Fit The following Corporate Priorities are relevant to this Business Case: 2.1 Promoting the health and wellbeing of our population, especially those who are vulnerable A common complaint relating to the current part night lighting initiative is that residents no longer feel as secure. New LED lighting would operate throughout the hours of darkness and still deliver substantial energy cost savings. 2.2 Protecting and enhancing our natural and built environment Included within this priority is the key objective; The carbon footprint of Poole is reduced and the downward pressure on energy costs for the Council is maintained The following objectives in our Place Theme are relevant to this Business Case: 2.3 Place Theme - To shape and sustain Poole as a great place to live, work, learn, play and do business 2.4 Strategies & Plans - To ensure Poole looks and feels like a place that has been planned, is joined up and makes sense both now and into the future 2.5 Improvement & Investment - To attract, enable and deliver investment to make Poole a better place 2.6 Maintaining The Place We Have - To help us ensure the natural and built environment, including public spaces and where we live, is safe, clean, protected, attractive and easy to use. 4

6 3 Business Need 3.1 Lighting column age issues As previously mentioned, 67% of our lighting stock in Poole is currently aged beyond its design life of 25 years. As the current budgets available to us for the replacement of lighting columns only allow us to replace approximately 1% of our column stock every year, additional investment is required in an effort to reduce the risk of column failure. The Institution of Lighting Professionals Technical Report no. 22 (TR22) - Managing a Vital Asset: Lighting Supports - aims to provide highway lighting authorities with guidance in the management of their lighting supports through the creation of strong management cycles, foundation of positive and consistent condition assessments and the application of a risk assessment strategy. The Borough of Poole has adopted the recommendations set out in TR22 with a view to achieving an efficient delivery of asset management requirements to ensure effective allocation of funds available for the replacement of lighting columns by way of prioritisation models. The guidance included within the TR22 report helps us to calculate the theoretical life expectancy of each column based on its construction, location, ground conditions, road traffic flow and exposure to potentially harmful atmospheric conditions (e.g. marine environment). The prioritisation of column replacement uses this information, along with a score based on the consequences of column failure, to help identify the columns in most need of replacement. Although the theoretical life expectancy calculated using the TR22 model gives the most accurate basis on which to form the prioritisation of column replacement, the options considered have been developed on the basis of affordability and consider replacement of columns older than 40 years. Ideally columns should be replaced within a 25 year lifetime as this is generally accepted to be the recommended design life. The risk of failure in columns falling into the year age bracket could be mitigated with regular structural inspection and testing procedures. 3.2 Energy costs As previously mentioned there is an increasing burden on our energy budgets for street lighting and as the cost of energy is expected to steadily increase in future this pressure will only intensify. Various options have been considered for energy reductions in street lighting including part night lighting (which has been introduced in selected areas on a trial basis) and the dimming of lights. Part night lighting, where lights are switched off between approximately midnight and 6am, is not particularly desirable due to an increased fear of crime for residents, although there is little evidence to suggest that crime does actually increase when lights are switched off overnight. 5

7 Dimming of lights is a better way of delivering energy savings while still maintaining an acceptable level of light throughout the night. Unfortunately, the equipment is not compatible with our existing lighting units due to their age, so a dimming regime can only be incorporated into new lighting units upon column replacement. As a signatory of the Covenant of Mayors the Borough of Poole has made a commitment to reduce Borough-wide energy / carbon emissions by more than 20% by As street lighting accounts for approximately 25% of the Council s total energy consumption, any potential savings in this area would provide a valuable contribution to the overall reduction target. For example, if the preferred option identified in this business case were adopted, a saving of approximately 70% on our street lighting energy consumption is achievable. This equates to a saving of 17.5% of the Council s total energy / carbon usage. The carbon savings for each option considered in this business case are included in Table Potential solution to accommodate column age issues and energy increases The vast majority of our street lights in Poole utilise high pressure sodium (SON) lamps. These have been the most common lamps used in street lighting within the UK over the last 30 years or so due to their efficient light output in relation to energy consumed. One problem with SON lamps is that they have poor colour rendering properties. Colour rendering refers to the ability of a light source to render colours of surfaces correctly when compared to a natural light source (such as daylight). The human eye cannot differentiate colours very well under conditions with SON lighting but a good determination of detail is maintained. LED technology has developed rapidly within the street lighting industry over the last 5 years and is likely to become the standard light source for street lighting over at least the next decade or so. The main benefits with LED technology are the provision of a better quality white light and the ability to make substantial energy savings due to the energy efficient properties of the light source. The white light produced by LED s is much closer to that created in daylight and allows the human eye to identify colour and surroundings in more detail when compared to the existing SON lamps. This gives the benefit of increased visibility for drivers and pedestrians resulting in a better feeling of general safety and security during the hours of darkness. Recent developments in LED technology have resulted in them delivering similar levels of light when compared to conventional road lighting lamps while delivering significant energy savings. Consequently, replacing existing street lighting with LED lighting will significantly reduce both energy bills and carbon emissions. 6

8 For example, a typical street light in a residential road in Poole currently uses a 70W SON lamp which, including the control gear that is required to operate the lamp, consumes a total of 90W of power. An equivalent LED lantern that will provide sufficient light to match or improve that of the SON lantern, consumes 29W of power. Therefore, using the LED solution would deliver a 68% saving. In an effort to achieve further savings, we have based our business case on the use of LED lanterns complete with photocells (light sensors) for each unit that are optimised to modern lighting technology which requires less time to warm up to full output. This is known within the street lighting industry as trimming and basically means that the lights will switch on slightly later at dusk, resulting in a reduction in the total hours of operation throughout the year. We have also allowed for a dimming profile to be programmed into the LED lanterns. This would automatically dim the lights to around 50% power between midnight and 6am when highway use is limited. This, along with the aforementioned trimming arrangement would deliver significant further savings (75% using the before mentioned example of an existing 70W SON lamp) while still providing an appropriate level of light in residential areas. The provision of dimming is far more desirable than part night lighting (when lights are switched off completely between midnight and 6am), as there would still be a provision of light in our streets throughout the night to increase the general feeling of safety and security for residents, which was a common complaint fed back during the consultation process for our part night lighting trials. The savings involved with the provision of LED lanterns complete with the trimming and dimming profile mentioned above, exceeds that achieved in our part night lighting scheme so the benefits are desirable to all. A recent article in the Daily Mail has raised concerns about LED street lighting and makes reference to a recently published study into the effects of LED radiation on the human eye. This study noted that LED s produce high levels of radiation in the blue band of the light spectrum, which can cause damage over time. And with the use of LED s ever increasing, the report authors raised concerns. LED s are now in use within a wide range of products we use on a daily basis, including indoor lighting, mobile phones and televisions. Therefore, the exposure to potentially harmful light from these sources will be much higher than that from street lights. The Institute of Physics issued a response to the study noting LEDs produce light at the same frequency range as sunlight; it s called visible light on the electromagnetic spectrum. Unlike sunlight, however, the light from LEDs is not intense enough to damage someone s eyes. Only ultraviolet and higher frequencies on the electromagnetic spectrum can cause damage to cells. 7

9 The study tested someone looking at the equivalent of a 100 watt light bulb, at a distance of 12 inches for 12 hours a day, and this isn t something a person would normally be doing. The LED technology we are proposing to use for street lighting in Poole produces a colour of light at a lower level that the blue spectrum referenced in the study. It is therefore considered that the use of LED lanterns for street lighting does not increase the risk to the public over that posed by the current lanterns. 8

10 4 Existing Budget and Maintenance Arrangements Below is a breakdown of the revenue budgets currently available to the street lighting team to cover maintenance of our lighting stock. These are Council Revenue budgets which will be under pressure over the coming years as the Council makes significant savings. Revenue Budget, 2014/2015 Street Lighting Maintenance JJ5200 Support (including staffing costs) 74,680 JJ5205 Routine Maintenance 110,420 JJ5206 Non-Routine Maintenance (repairs) 160,530 JJ5207 Vandalism/RTC (Repairs) 100,550 JJ5209 Night Scouting 8,750 JJ5210 Electrical Testing 17,220 JJ5211 Maintenance of Illuminated Signs 43,160 JJ5213 Structural Testing 10,710 Total 526,020 Lighting Energy Budgets JJ5204 Street Lighting 718,180 JJ5211 Illuminated signs 168,900 Total 887,080 Capital Budget The current year s allocation for street lighting from the Maintenance Block Allocation is 270,000. This budget is confirmed for 2014/15. The Treasury Report Investing in Britain s Future indicates that funding could increase by up to 35% in 2015/16 and then stay at that level until It has therefore been assumed that from 2015/16 a capital budget of 300,000 is available for street Lighting Maintenance (11% increase on current budget) The current maintenance regime in place for street lighting includes the following; Every 2 years; Columns and lanterns are cleaned, tested, inspected for operation and structural condition Lamps with 2 year guarantee s are replaced Every 4 years (additional to the above); Lamps with 4 year guarantee s are replaced Every 6 years (additional to the above); 9

11 Full electrical inspection and test is carried out in accordance with the requirements of BS 7671: Requirements of Electrical Installations Structural Inspection Regime All columns are visually inspected every two years as part of our routine maintenance schedule. The Institution of Lighting Professionals Technical Report no. 22 (TR22) recommends that columns and brackets are inspected at least once every 3 years but as the majority of our stock has exceeded its design life, we carry out the inspections on a more regular basis in an effort to monitor condition closely and identify any columns requiring urgent replacement. It is worthy of note that, prior to 2011, inspections were carried out on an annual basis but the service was reduced during a budget review at the time. The structural inspection of the column includes a visual record of all parts of the lighting column where deterioration is likely to occur - in particular the base compartment, door aperture, the joint between the base section and shaft (if applicable), the joint between the shaft and lantern bracket and the mounting spigot for the lantern unit. Any major defects are reported to the street lighting engineer for immediate consideration. 10

12 5 Project Scope 5.1 Items being considered within business case: All street lighting columns owned and maintained by Borough of Poole (including PHP, Leisure and Property Services units) ranging from 5m to 12m in height 5.2 Exclusions from business case: Heritage cast iron gas style columns - cast iron structures to be considered separately due to long life expectancy and high cost of replacement Aluminium and stainless steel columns - as these have superior life expectancy compared to concrete and steel columns Wall mounted lights - to be considered separately due to limited quantity High masts - 32 no. specialist lighting masts in Poole to be considered separately due to large investment required for replacement (approx. 20k+ per mast) Wall and ceiling mounted lights - to be considered separately Combined street light / mobile telephone transmitter masts - we are only responsible for road lighting luminaires and associated bracketry as the column structures are owned by the mobile providers Sign posts - low level posts are considered to be lower risk than lighting columns. The DfT s Traffic sign review due in 2015 is expected to relax the illumination requirements of many non-critical signs so there is a potential for de-illumination. There is a potential for energy budget savings as a result of sign de-illumination or conversion of signs to LED technology - to be reviewed in 2015/2016. Illuminated bollards - the majority of these have recently been upgraded to LED units and majority of ageing steel bollard stock has already been replaced Feeder pillars - these are low level and have a minor risk of structural failure Zebra crossing beacon poles - standalone 3m beacon poles are not included. Where beacons are mounted on lighting columns, the column is accounted for. Further information on the types of street lighting columns is contained in Appendix Structural Testing Programme The street lighting team introduced a non-destructive testing (NDT) regime in 2004 in an effort to monitor the condition of our steel lighting columns that have known structural defects and mitigate the risk of future structural failure as much as possible. There are a number of different types of NDT available to provide analysis on the structural condition of lighting columns. Some involve the application of a predetermined static load on the structure to assess the structural capability of the column. Others involve the use of probes to assess the remaining wall thickness of the steel tubes that make up the column structure. This probe process allows the condition of the root section of a column to be assessed by measuring the wall thickness to a depth of up to two metres below ground level without the need for excavation. A full and detailed analysis of the hidden and potentially vulnerable 'swaged joint' (i.e. the joint between the base compartment and column shaft) is also carried out as part of the testing process. 11

13 The street lighting team decided to adopt the latter version of testing as it offers good value for money while delivering a suitable level of data to assess the condition of our columns and mitigate the potential risk of failure where possible. The testing supplier offers indemnity insurance based on the theoretical remaining life expectancy of the lighting column in accordance with the results of the testing process. This basically means that the Council is protected by the insurance, which will cover the cost of column replacement if premature failure occurs due to structural defect within the calculated remaining lifetime. However, the costs covered are determined by the insurance provider and are based on the minimum amount required to replace a column. Therefore, the amount paid out may not cover the full costs incurred by us for column replacement in accordance with the rates included within our term maintenance contract. History of columns in Poole failing structural test inspections: 2004/05-3 no. columns (2 x 10m columns, 1 x 12m column) 2007/08-14 no. columns (3 x 8m, 8 x 10m, 3 x 12m) 2008/09-18 no. columns (17 x 10m, 1 x 12m) 2009/10-29 no. columns (17 x 10m, 12 x 8m) 2010/11-23 no. columns (16 x 10m, 7 x 8m) 2011/12-6 no. columns (6 x 12m) 2012/13-0 no. columns 2013/14-36 no columns (5 x 5m, 8 x 8m, 23 x 10m) Note - a reduced testing schedule was carried out in 2011/12 and 2012/13 due to a smaller number of columns being due for test renewals. The general pattern over the above period of testing suggests that the condition of the steel column stock with known structural defects is deteriorating steadily and this will result in increased risk of failure. Details of column failures are contained in Appendix 3. Photographs showing evidence of street light failures due to structural defects are shown in Appendix 4. 12

14 6 Options and Financial Appraisal 6.1 Option Appraisal All options are based on the following assumptions: It is assumed that the capital budget remains unchanged An allowance has been made for reductions in maintenance costs and contract price increases. Since the start of the current contract in April 2011, prices have been increased on average by 3.7% per annum. The condition profile is based on concrete and steel columns only which make up 98% of the stock. Stainless steel, aluminium and cast iron columns which make up the remaining 2% are not included. The amounts for investment have been calculated based on average replacement costs for the various column types and heights across the Borough. Comparisons have been made with similar projects being considered / undertaken by other Local Authorities in the South West. A summary is included in Appendix 5. Options Considered Option 01 - Continue with next phase of Part Night Lighting. Continue with current replacement programme which renews on average 180 columns each year and switch a further 6354 lanterns to part night operation (where lights are switched off between the hours of midnight and 6am). This option also allows for 70,000 to be spent annually on ad hoc lantern replacements. This option would not change lanterns to LEDs. There would be some energy savings due to the reduced hours of operation. Phase 2 of the part night lighting programme is due to be reviewed with affected residents being asked if they wish it to continue. There is the possibility of lighting being switched back on again meaning that the associated energy savings are lost, thus generating a pressure within Transportation Services which the Unit will have to identify alternative savings to offset. The outcome of the upcoming consultation may have a bearing on the ability of this option to realise the predicted energy savings. For further consideration, a brief overview of the current part night lighting trials is included in Appendix 6. Adopting this approach would mean that the condition of the stock will continue to deteriorate. It would be likely that maintenance costs would rise as the lighting stock becomes increasingly obsolete. The risk of column failure would also increase. 13

15 This option is not generally recommended due to an increased fear of crime for residents. Although there is little evidence to suggest that crime does actually increase when lights are switched off overnight, a number of complaints have been received from concerned residents in relation to our part night lighting trials. The provision of dimming is far more desirable than part night lighting as there would still be a provision of light in our streets throughout the night to increase the general feeling of safety and security for residents. The outcome of this business case will determine if the aforementioned consultation process for phase 2 of the part night lighting trials takes place. If the preferred option is adopted, it is proposed that the consultation process is abolished as the trials would be superseded by the replacement project. Lights in the trial areas would then be converted within the project timescale. Information to confirm our position in this respect would be covered by way of letters to affected households (if cost approved), press releases and updates to our website pages Option 02 Replace a mixture of up to 17,420 columns & lanterns. In order to generate maximum energy savings the replacement of 8,640 lanterns is carried out in the first year of the project. At present there are 7,583 columns that are over 40 years old and 2954 that are aged between 30 and 40 years. The number of columns replaced is all of those currently older than 40 years plus those that will fall into this category over the project period making a total of 8,780. These columns are replaced over years 2 to 5 of the project Option 03 - Replace a mixture of up to 17,130 columns & lanterns. As Option 02 the lantern replacement is carried out in year 1 of the project. The increased early savings offered by this option means that it is not possible to replace all columns over 40 years old. It is estimated that at the end of the project 290 columns over 40 years old will remain. These would be replaced in year 6 using the capital maintenance allocation. 6.2 Financial Implications Cost comparisons have been made on the following bases. In each case only Prudential Borrowing (PB) is considered as a funding option. a) Continue with the next phase of the part night street lighting project (PNL). This will involve the switching off of a further 6,354 street lights out of a potential 10,590. (The implementation of this option will likely be subject to various non-financial difficulties dealt with elsewhere in the business case). 14

16 b) Replace a number of columns and lanterns such that a net saving to the Council s revenue account is maximised while also taking account of the state of the Councils stock of Street lighting columns Potentially 10,590 more lights could be subject to the implementation of a further phase of part night lighting. However, in a consultation after Phases 1 and 2 of the part night programme it emerged that only 60% of the residents affected by those phases supported the programme. Therefore in the workings for this business case it has been assumed that only 60% of the remaining lights would be switched off during the night (i.e., 10,590 x 60% = 6,354) Table 6.1 summarises the findings for three options Option 01 (PNL), Option 02 (replace a mixture of up to 17,420 columns & lanterns) and Option 03 (replace a mixture of up to 17,130 columns & lanterns) The total cost of the proposed capital schemes vary from 10.5m to 10.2m (02 and 03 respectively) spread over 5 years It is expected that it will take at least 10 months to finalise the tender process prior to the contract starting The different options assume the project would be funded through a mixture of Prudential Borrowing and Transportation s Maintenance Block Allocation for Street Lighting. The repayments will be made over 25 years and will total 13.34m for Option 02 and 13.36m for Option Energy prices are assumed to increase in line with the assumptions built into Transportation Service s current MTFP for the period 2015/16 to 2018/19. Thereafter increases of 2.5% are used. The latter reflects information that was provided by the Council s energy consultant. 15

17 Table 6.1 Street Lighting Capital Project: Install LED Lighting and Column Replacement Capital Expenditure funded by Prudential Borrowing (PB) &, for Options 02 & 03, Base Capital Budget Narrative Option 01 Option 02 Option 03 Continuation of Part Night Lighting (6,394 lanterns converted) Number of columns to be replaced Na 8,780 8,490 Number of Lanterns to be replaced Na Business as usual ad hoc replacement of lanterns (non- LED) Funding PB PB & base capital budget Repayment term of Prudential Borrowing Duration of Capital project (years) Energy price inflation assumed MTFP to March 2018; 2.5% thereafter 8,640 8,640 PB & base capital budget 3 years 25 years 25 years MTFP to March 2018; 2.5% thereafter MTFP to March 2018; 2.5% thereafter Capital Scheme costs 337,700 10,492,140 10,227,370 Amount Borrowed 337,700 8,413,000 8,581,120 Funding from base - 1,500,00 1,500,000 Capital Budgets (i.e., 300k per annum) Maximum Annual PB 114, , ,434 repayment Total cumulative energy 3,863,349 23,414,406 23,408,493 cost saving (after allowing for energy price increases) over 25 years Total cumulative 343,375 13,344,350 13,610,850 prudential borrowing repayments over payback period) (principal & interest) Total Cumulative Net Revenue Saving 3,863,349 10,070,056 9,797,643 Additional Cumulative Net Savings Total Carbon Saving per annum (CO2) once project completed 219,000 (i.e., 73k p.a. for 3 years) 3,748,756 (over 25 years) 3,872,089 (over 25 years) 565 tons 3,200 tons 3,150 tons 16

18 Savings will result from two main sources: The relative efficiency of LED lighting when compared to old sulphur lanterns: LED lighting is considered to use just 30% of the power required by Sulphur lanterns. Expected savings in the Street Lighting Maintenance Contract which would likely result from the implementation of LED lighting. A 73,000 saving on Street Lighting Maintenance costs which materialised in 2013/ Option 02 is forecast to generate total net savings over the lifetime of the project (i.e., 25 years) of 10,070,056. The equivalent figure for Option 03 is 9,794,280. Forecast Impact of Options on MTFP (Net Savings/Pressures) Based on the comparison in above, the estimated costings for Option 02 have been reviewed to assess their impact on the Councils and Transportation s MTFP This option would be introduced over a 5 year period with separate tranches of column replacement commencing at the start of each financial year. The related Prudential Borrowing repayments would commence the following year. This has the effect of the Prudential Borrowing charge increasing year on year until the fifth year. It then stabilises until year 20 when it gradually starts to reduce year on year It is assumed the project will commence in 2015/16. This means that savings and Prudential Borrowing Repayments will commence in 2016/17. 17

19 Savings in excess of 200k are reinvested. This amounts to 8,173 in year 1 (2016/17). Table 6.2: IMPACT OF STREET LIGHTING PROPOSALS ON REVENUE ACCOUNT, 2015/16 to 2019/20. Option 2016/ / / / /21 PB Repayments 128, , , , ,097 Savings Energy Costs (239,259) (53,637) (83,852) (87,823) (79,819) Savings Other (Contract Savings & 73k Miscellaneous) (97,281) (7,617) (7,617) (7,617) (7,617) Reinvestment of savings over 200k 8, Total PB repayments less Savings Energy price Increases 14/15 MTFP Price Increase removed Revised Energy Price Increase Total Energy Price Increase (200,000) 39,257 9,613 6,277 14,661 (31,611) (30,034) ,522 8,632 6,821 6,407 0 (10,512) 8,632 6,821 6,407 Net Impact on MTFP (231,611) 28,745 18,246 13,098 21,068 Pressures = energy price increases & Prudential Borrowing Repayments. Savings = (i)reduction in energy consumption as a result of either part night lighting or the introduction of LED lighting. (ii) Savings on the street lighting maintenance contract resulting from introducing LED lanterns and a separate, recently identified 73k saving on street lighting budgets. 6.3 Summary Option 02 provides the best solution to the authority in terms of overall improvement of the street lighting stock, reduction of the associated risks and reducing energy costs and carbon consumption and overall savings If the preferred option is approved, further refinement of the cost estimates would need to be undertaken as currently these are based on rates contained within the existing maintenance contract. This work along with confirmation of funding route would then confirm the actual (rather than targeted) MTFP saving that could be made. The target is to have all columns over 40 years old and all lanterns being replaced as part of this project whilst offering a 200,000 annual saving to the 2015/16 to 2017/18 MTFP (i.e., the columns shaded yellow in table 6.2). 18

20 The option for the continuation of part night lighting is not recommended due to safety concerns and in particular the high number of complaints we have received in relation to trials we have carried out in recent years. If the preferred is adopted, it is proposed that the consultation process for phase 2 of our part night lighting trials is abolished as the trials would be superseded by the replacement project. Lights in the trial areas would then be converted within the project timescale. Information to confirm our position in this respect would be covered by way of letters to affected households (if cost approved), press releases and updates to our website pages. 19

21 6.4 Notes of other items considered but not included within financial option appraisal Aluminium Columns Aluminium columns have recently been used in Poole on the link roads to our Twin Sails Bridge. It is proposed that they are also used within the regeneration area of the town to ensure a consistent aesthetic approach. Aluminium was mainly chosen as the column material to be used due to an extended design life (approximately 50 years - double that of a galvanised steel column) and its resistance to corrosion, particularly as the columns are located very close to the marine environment. Some manufacturers offer a 50 year warranty on their columns which is attractive for long term peace of mind. Other benefits are a pleasing aesthetic appearance and the avoidance of the need to apply an external paint finish to the columns. The cost of aluminium columns is between 1.5 and 2 times the cost of conventional galvanised steel columns. To make a fair assessment of the lifetime costs for each, comparison would need to be made over a 50 year period. This shows that the use of aluminium columns could deliver a cost saving of 2.9m over a 50 year period. Broken down, this equates to an annual saving of approximately 3.30 per lighting column. Passive safety No allowance has been made for the use of passively safe lighting equipment in this business case. The Borough of Poole currently has a policy to consider the use of such equipment on any road with a speed limit of 50mph or above. We would propose that any consideration will be made separately and a cost benefit analysis made between the use of passively safe equipment and other relevant safety measure options (such as crash barriers). 20