How one city is resolving its smart cities funding dilemma

Wed, 2018-10-31 16:40 -- SCC Partner

When we ask cities what obstacles are getting in their way of implementing smart cities projects, funding often is near the top of the list. One frequently overlooked option is to make better use of the funds you already have — and one of a city's biggest expenses is energy.

One inspiring example is the city of Bethlehem, PA, which is on its way to cutting its energy bill by half or more — an annual savings of $500,000. Through a partnership with Council Associate Partner Pennoni, it got deep insight into where its energy expenses were coming from, allowing it to take action that resulted in substantial savings. And as a result, the city has more money that's available for higher-impact efforts. — Kevin Ebi

Finding funding for smart cities initiatives is a hurdle that many cities face.

But, what if we told you that implementing a particular smart city solution could offer savings to your city that you can then use to fund additional smart solutions? And what if that solution could also bring clarity to the often-confusing realm of energy management as you look to find the best strategy for your city?

When you are understanding not only where and when to buy your energy, but also how to manage that energy efficiently and strategically, you can reroute those energy savings to other initiatives.

Whether you’re in a regulated or deregulated market, an innovative energy management system  provides transparency into managing your energy use and spend — and provides the factual data to help you understand what the cost components of energy are, where you’re spending your money, and then where should you be focusing your energy. It organizes your data to provide a gateway to show you how to improve your operational strategy and efficiency.

In a deregulated market, the process starts with the procurement of energy. The City of Bethlehem, PA was spending more than $1M per year on energy, but did it need to be? Through the use of OPTICS™, Pennoni offered a way to provide energy savings to the city. While city officials were intrigued, they were comfortable operating like other municipalities, used to price certainty, and they tended to be risk averse.

By introducing OPTICS, the city estimates for budget purposes that it will save $300,000 versus a defined benchmark. But additional estimates place savings as high as $500,000 to $600,000. City officials receive a monthly report detailing where costs are coming from and why they are happening while continuously monitoring for future opportunities, projections and operational efficiencies that result in unit cost reduction.

Conversely, you can still see savings in a regulated market where the focus isn’t on the procurement of energy but on the usage of energy and monitoring that usage to find savings. By analyzing energy use data, you can strategize efficiencies, new designs, equipment replacement, distributed generation and more.

The savings offered through such an energy management system does not stop with procurement. OPTICS is a complete energy management system with multiple templates, a gateway to energy efficiency and asset optimization, and when enabled can create a smart and sustainable energy result. When cities improve their energy management strategy and their savings, they can position themselves at the forefront of innovation.

Joe Viscuso, PE, PLS, ENV SP, is Senior Vice President and Director of Strategic Growth at Pennoni.