Background: Street lighting is a major cost to council. With contestability soon available, council considered it prudent to identify what price streetlight should be costing them so that they could then put processes in place to obtain that price. Council also wanted to know what other opportunities or issues should be investigated to provide a Best Value solution for rate payers.

The Process: TTEG and NZTF reviewed the streetlight operations of each council and then determined a "fair and reasonable" price for the provision of street lighting (i.e. not simply the provision of energy) for each council. The process and models used to determine "fair and reasonable" streetlight have been developed and proven internationally for over 40 years, and adapted to suit local Victorian requirements. Individual council needs were also incorporated into the process and the models.

We also interviewed councils engineering, planning, environmental, management, and accounting groups to establish existing processes and operational and financial issues.

The Results: Our client councils now know what they should be paying for "fair and reasonable" streetlight. Based on our intimate knowledge of the street lighting and energy markets, savings of up to 45% were identified. Strategies to achieve these "fair and reasonable" savings were also recommended and are currently being implemented via a group of over 20 councils that include TTEG clients.

Details of how TTEG achieved the best commercial deal, including the lowest energy price, are included as a separate project titled "Energy Tender for Victorian Streetlight Energy".

A raft of other issues and opportunities were also presented to council in a timely and effective manner. Where required, TTEG will assist council in these areas, including:

• The need to establish operating Key Performance Indicators for lamp maintenance, fault reporting, and repair etc.
• Combining other energy purchases to obtain pricing and system/control benefits
• The introduction of new technologies to provide lower cost, yet more effective lighting
• Inventory asset ownership, inventory accuracy, and location accuracy
• Accounting, controls, processes etc.

Background: Transport SA (TSA) is the provider of major roadways, highways, and ancillaries throughout South Australia.
The process: With Streetlight contestability due for implementation on January 1, 2003, TSA needed a Technical Specification to include in their energy tender. The specification was required to include not only the energy requirements for street lighting, but also for traffic signals.

In addition, TTEG was requested to provide a preliminary assessment of the costs for traffic signals that should be achieved by TSA in the contestable market.

The Result: The Technical Specification developed by TTEG included a unique request for un-metered traffic signal energy requirements. The Technical Specification was ultimately used by the SA Department of Administration and Information Services to tender TSAs requirements.

TTEGs preliminary traffic signal assessment provided TSA with unique insights into fair charges they could expect in the contestable market. The assessment will be used by TSA to compare to the pending offer from ETSA Utilities (distributor) and as a basis for subsequent negotiations.

Background: With the electricity market for street lighting becoming contestable on August 1, 2001, TTEG was approached by a group of councils to tender for their needs. Many of the councils were historically part of a purchasing group called MAPs, but it was considered that an alternative approach as offered by TTEG would provide a true comparison and a genuine alternative. Ultimately, TTEG tendered on behalf of 16 councils for a total of 65 GWh.

The Process: Under the Local Government Act, councils are required to meet stringent tendering protocols for major purchases. TTEG incorporated these protocols into the tender process.

The Result: TTEG obtained better prices from the marketplace than any other group. The participating councils were also delighted as TTEGs processes provided them with more options (including a choice of "Green Energy" sources and prices) than were provided by MAPs.

Other commercial aspects were also preferred in the TTEG result e.g. 30-day payment terms. Overall, the TTEG result provided cost savings of around 60% versus the historical price and around 7% better than MAPs.

For councils spending around $1 million p.a. on street lighting, this represented roughly a savings of $300,000 p.a. versus historical costs ($900,000 over the three-year contract) and also a saving of over $15,000 for each council versus MAPs. In short, the additional savings achieved through using TTEGs services provided significant savings to our clients well in excess of our professional fees.

Background: The LGA is the peak body for all councils in Southern Australia. With streetlight contestability due for implementation on January 1, 2003, the LGA membership required to have the issues and requisite actions to achieve Best Value identified. In addition, the LGA required a General Service Agreement prepared to enable councils to contract the services of the local distributor, ETSA Utilities. TTEG was selected as the provider of choice for this work following a competitive selection process.

The Process: TTEG prepared a comprehensive Streetlight Issues Paper that incorporated both sector (industry) issues and local issues that needed to be addressed by each council.

The Result: The Issues paper identified problems pertaining to network charges, tariffs, streetlight assets and various other items to ensure the LGA and its membership achieve substantial savings in the contestable market. The Issues Paper will be used to negotiate with both the distributor (ETSA Utilities) and the industry regulator (SAIIR) to achieve these savings.

TTEG provided a General Service Agreement (GSA) to enable individual councils to negotiate fair and reasonable streetlight charges from ETSA Utilities. The GSA addressed items including: asset management, maintenance performance requirements, green energy aspects, reporting and information requirements, billing, indemnities and dispute resolution procedures, and pricing schedules.

Background: Transit NZ is the provider of roadways and ancillaries throughout New Zealand i.e. the VicRoads or DMV "equivalent" for Victoria.

The Process: NZTF was requested to review the existing operations in Auckland.

The Result: A time of use system was established with electricity charges better reflecting actual usage and costs. In addition, this will provide the correct "drives" for better planning and design of street lighting systems, luminaries, and processes.

NZTF determined the inventory versus the charges being made, thereby enabling more accurate billing. This process was extended to cover all of New Zealand. NZTF calculated a "fair and reasonable" price for street lighting including an investigation into distribution charges, which NZTF calculated to represent a fair charge for Transit NZ. With parameters and consumption and established, NZTF was able to conduct a competitive electricity tender for Transit NZ.

Background: North Shore City Council is one of the five major councils in Auckland, New Zealand. The maintenance cost of street lighting was a major expense and becoming more costly as the system became older.

The Process: NZTF reviewed the streetlight operating systems and maintenance costs, resulting in a recommendation for the introduction of a new control system for streetlight to significantly reduce both cost and exposure to council.

Background: Marlborough District Council has over 3,500 streetlights and 150 individual locations, each using electricity and having a separate charge or meter. This was an administrative nightmare for council and at the same time council was not sure if it was achieving the best price that it could in terms of energy consumption.

The Process: On councils behalf, NZTF determined appropriate consumption and other details to issue a combined tender for all councils electricity consumption, i.e. both streetlights and other sites.

The Result: Significantly lower streetlight charges and improved billing efficiencies.