Background

Sustainability Director

Erin Gill
egill@knoxvilletn.gov
(865) 215-4430

400 Main St., Room 503
Knoxville, TN 37902

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The following table provides a “snapshot” summary of the City's current (pre-retrofit) bill:

Estimated Current Annual Street Lighting Costs (Paid to KUB)
Bill Component Amount Calculation Notes
Energy Charge $ 1,995,484 27,305,476 kWh @ $0.07308/kWh
Facilities Charge $ 1,993,407 $13,795,205 * 14.45%
Glassware $ 30,000 Actual cost for replacement lamps and glassware
Total Annual Bill $ 4,018,891  


Concurrent with the design of the new LED lights, the City will also work with KUB to arrange to reimburse the utility for approximately $5,155,000 million of past infrastructure investments in the lighting system. This reimbursement will eliminate Facilities Charges and minimize maintenance costs going forward. 

The City estimates that the total cost for this project – including the approximately $5,155,000 payment to KUB – will be approximately $15 million . This includes the "turnkey" price of conversion, including (but not limited to) labor, materials, supplies, equipment, facilities, disposal, retrofit design, and processing for all utility rebates. One of the City’s primary objectives is that the cumulative cost savings resulting from the project offset all upfront capital costs (including any financing costs) within 10 years of project commencement.

Based on industry research and experiences in other cities, the City fully anticipates that the retrofit project will achieve the desired payback. The equivalent replacement LED luminaires are expected to use 50-60% less energy than the existing HPS lights, yielding annual savings of $1 million to $1.2 million in reduced energy charges. Additionally, given the 10 year warranties now offered routinely by LED manufacturers and the very low failure rates among the early adopters of LED street lights, the City anticipates significant reduction in maintenance costs. The City anticipates that maintenance costs will fall about 50% below the current Facilities Charge of nearly $2 million.