Trustees OK patch for smart meters ahead of future install for new system

Aug. 1—Duncan Public Utilities Authority trustees gave the green light with a 3-1 vote Tuesday to pay over $405,000 for a patch for current smart meters in the city ahead of a new system installation that's about 18 months away.

The first item in regards to the smart meters before the trustees came for a purchase of a remote meter-reading system upgrade from Honeywell Smart Energy with a price tag of $92,954.30.

City Manager Kim Meek said the request comes as customer service, IT, water and electric departments deal with the "continual degradation of the existing Elster Meter Data Management operating system" which she said is "out of date and out of technical support options."

"To make up for the many and varied shortcomings of the obsolete Elster System our departments are making do through the application of more labor; labor mostly coming from reducing system maintenance hours worked by field crews and sometimes via overtime work in all departments," Meek said. "Even with the extra effort and reduction in water and electric systems maintenance, still, the long slow descent into complete meter reading and customers utility consumption billing ineffectiveness continues. There is a solution available to replace the outdated system and to make the existing meters more useful until the water meters can be replaced."

In Duncan, smart meters rolled out in 2010 when Honeywell implemented the smart metering network in an effort to help the City of Duncan improve conservation in the area and make collecting data a simpler process.

In creating the network, Honeywell reportedly replaced existing meters with more than 9,000 electric meters and 12,000 water meters, which came from Elster Integrated Solutions. The project reportedly totaled $14.2 million, according to Banner archives.

In 2013, more than a year after the project installation completed, The Banner also reported Honeywell replaced 8,000 water modules in Duncan because the ones installed originally were deemed to not work well enough. Additional meter work in 2013 also included replacement of most of the 12,000 water modules installed and also 12,000 new meters.

The topic resurfaced for discussion in 2019 when residents began experiencing high water bills and some instances of "uncharacteristic billing."

In January 2020, City of Duncan entered a contract for consulting services through Diameter Services Inc., which was tasked with evaluating and making recommendations on the city's water meters and its infrastructure.

According to Meek, the Elster Company, along with their products and software systems, were purchased a few years back by Honeywell.

"Elster and now Honeywell continue to market the OS (operating system) to public and private utility customers throughout the USA and Europe," she said. "The most recent upgrade was a complete replacement — not just a 'patch' for bugs — of the Honeywell OS called Connexo NetSense."

Meek said the installation of the new version of Connexo NetSense software, data migration from the old release to the new release, installation of the latest patches, installation / upgrade / configuration of applicable integration software, and custom configuration on a cloud service of the city's choosing comes at a "discounted price" of $71,082.70 and an annual system maintenance fee for 2022-2023 or the next consecutive 12 months, based on actual meter count, is estimated at $21,871.60.

Before the motion went to vote, trustees had several questions, which trustee Nick Fischer opened.

"We've been down the path with these folks before — and I'm not saying good, bad or indifferent — but, are we ok?" Fischer asked.

Meek responded by saying they were in the process of replacing all of these meters.

"Unfortunately, the only available to use is what is already in place, so Honeywell has these meters ... and they're the only ones that can do it," Meek said. "We have their system, we have to use them until we move to the new system."

She said, "this keeps our system running until we can get the new system in place."

Mayor Robert Armstrong asked about the timeline on the new system, and Meek said bid packets went out and are scheduled to be opened on Aug. 10.

"It'll take about a year to 18 months probably to install the entire system," Meek said. "Assuming we get back a bid that is what we borrowed and (we have) enough money."

Armstrong then asked Meek what strain the departments and citizens would face if the agenda item wasn't approved and Meek said more and more meters won't send in the data needed.

"What's happening is that we are having more and more meters that won't send data from the meter to the billing system, so we are actually having to send people out and read meters," Meek said. "We have more and more rereads or actual reads that we have to do, so it's more labor and it drives the labor cost up. You'll probably need to hire more people."

Armstrong then directed his attention to City Attorney David Hammond and asked if there was any recourse in the contract and if they spent money on this, what would happen if results don't improve.

Hammond said they entered into negotiations with Honeywell about a year or two ago to get part of those problems resolved.

"On the software purchase, that will be under a new agreement, so we would have recourse on that if it doesn't work," Hammond said. "But my remembrance is we had them shave quite a bit of money off of what we owed previously ... It actually ended their maintenance contract so the new software and the remotes and everything we're ordering now, we'll have recourse in the contract if they don't work."

Peters then asked if the operative point was to use this to keep the city going short-term until the long-term plan of installing a new system is finished, to which Meek said yes.

Two other agenda items related to the meters then appeared before the trustees.

Before the first one went to vote, Fischer asked about longevity of the system, and Meek broke down how this patch will work.

"So this is the software piece that allows the two pieces to communicate, and those updates didn't get done because we ended that contract," Meek said. "So these new pieces will bring the data over and that makes everything talk to each other in the proper way. Then, in the next item, we're buying more meters so we can remotely disconnect meters and not require people to disconnect meters in somebody's backyard. And then the next one is an IT direct company that does handling of these systems, it's what they do, so that would put them in charge of all of that, and even when we do bring on the new system, they'll continue to handle that IT portion of it. It keeps your IT portion of it separate from your meter portion instead of having Honeywell doing all the things. So this is a patch to get us until we get a new system. It will last until we have a new system."

The motion passed with a 3-1 vote that saw Armstrong vote no and Trustee Patty Wininger absent.

The next item as Meek said came for the purchase of 2,500 radio read Elster meters from Honeywell for $312,512.50.

Meek said Duncan Power needs to purchase these for system-wide use and that they must be Elster Electric Meters to work with the wireless meter reading system.

"The meters are for new accounts, stock, non-radio read meter replacement and will be deployed by the staff in an expedited manner," Meek said. "The house meters are required with the remote disconnect feature at $115 each ($287,500 total) and there is an unavoidable import tariff of $25,012.20."

The motion again passed 3-1 with Armstrong voting no.

The third item, as Meek said, was for the purchase of a remote meter-reading system hosting and electric system analytical service.

"At present, the existing Elster Meter Data Management OS is located on a City of Duncan server and its functionality is limited by the hardware that makes up the server," Meek said. "Most electric companies and their customers are requiring more data about their electric utility service which means regular upgrades to OS and server hardware, and don't forget the need for data backup."

Meek said an invitation to bid went out to three approved bidders on June 20, 2022, and when bids were opened on July 11, they received sealed bids from Utilismart Corp. and AriesPro. The third company, Landis+Gyr, submitted a no bid.

Utilismart Corp., according to Meek, bid a total of $618,244 with some alternates while AriesPro bid a total of $158,050.

"The two responsive bidders used a five-year and a three-year term respectively," Meek said. "Staff used annualized cost to determine a comparable cost. AriesPro is the lowest bid on an annual cost to own and operate basis. Both companies proposed to host our OS in their respective clouds, have many public utility customers in the U.S. and are recognized as leaders in data analytics in the public utility industry."

Meek again clarified this service will carry over with the new system.

The board approved the item with a 4-0 vote.

In other Duncan Public Utilities Authority news, the board approved:

—A pay request to Freese and Nichols for $4,014.86 for services on the "Water Project FY 2022."

—A pay request to Freese and Nichols for $20,578.92 for services on the Clear Creek Lake Dam Phase II embankment evaluation. The study and engineering plans are about 57% complete at this time.

—A pay request to Portland Utilities Construction Co. LLC for $45,252.17 for services on the Sanitary Sewer Rehabilitation Project.

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