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1. Skeptical about ROI claims – Return on investment was calculated using actual test data from a sampling of meters from our system. Finance and Public Works staff has conducted extensive review of Chevron’s projections and believe them to be very conservative. As an added measure, the legislature added a requirement for performance contracting proposals to be reviewed by a third party to ensure that the methodology used to calculate the return on investment is correct. The City hired EEA Consulting Engineers, Inc. of Austin, Texas to perform a third party review and they confirmed Chevron’s methodology. Chevron is guaranteeing the ROI. 2. Open Architecture – a. Sensus’ Flex Net system does utilize open architecture in that it will accept readings from several other major metering companies including Neptune and Badger. From staff’s perspective, that is the open architecture that we are looking for because it does not lock us into using only one meter manufacturer for the life of the system. In that manner, we are able to maintain competitive pricing on all new meter purchases. b. Flex net does use a secure FCC licensed radio frequency to transmit meter readings back to the collectors. There are other more open architecture radio frequencies out there but they do not offer the security and dependability of a licensed frequency. 3. Rapid Advancement and impending obsolescence – a. While it is true that technology is progressing rapidly, City staff has been studying AMR technology for over ten years now waiting for a dependable fixed-base system like Flex Net to develop. We have built the cost of software maintenance into this project so that we get all software upgrades as they are made available. b. We do know that changes will be made with the metering components because the USEPA is mandating that meter manufacturers provide a “No Lead” meter by 2014. This is why Sensus is changing to the iPearl meter which uses a composite body instead of the traditional bronze body. The Flex Net system, however, uses open architecture as far as meter selection goes so we are not locked into a single particular meter manufacturer. c. We have no reason to believe that the Flex Net system is anywhere near obsolete. The City of Arlington (100,000 services) is currently in the implementation phase of their Flex Net installation. This is the largest single AMR project to ever be
conducted in Texas. Arlington, like Victoria, has waited and watched AMR evolve over the years until a dependable fixed base system was developed. Now that there are several dependable systems on the market, they chose Flex Net and are moving forward with their project. 4. iPearl meter is non open architecture, non modular, and non C700 compliant - The City of Victoria is not using the iPearl meter for this project. We are using Sensus’ PMM meter, which is the meter we are currently using and that we have used for several years. As mentioned earlier, the Flex Net system does utilize open architecture and does not limit us to a single meter manufacturer. At some point in the future, we may purchase the iPearl meter, but not with this project. We prefer to stay with a tried and true meter that we have used in the past and that we are confident in. The system is modular in that we can install several different manufacturers’ meters right in place of the PMM if needed. The PMM is AWWA C702 compliant which is the AWWA standard for multi-jet meters. C700 is the standard for positive displacement meters. 5. Sensus is a privately owned company (all eggs in one basket) – Sensus has been in the water meter business for over 100 years. They are the old Rockwell meter that was the mainstay of most of the water utilities in Texas, including Victoria, for many years. Sensus employs almost 4,000 people in 41 facilities on five continents. The Flex Net system does not limit us to Sensus meters. 6. Chevron has switched meter vendors from iTron to Sensus, why? – The City of Victoria Public Works staff selected the Sensus system for this project, not Chevron. Chevron solicited bids from several meter manufacturers. Based on those bids and on the merits of the different systems, Chevron submitted a short list of three vendors to the City. That short list included iTron/Badger, Neptune, and Sensus. Based on presentations from those three companies, City staff selected Sensus’ system as the system to use for this project. 7. Chevron has a minimal track record with AMR, especially iPearl –
a. Since we are using performance contracting to purchase and install this system,
Chevron is our Energy Services Company or ESCO. With performance contracting, you enter into an agreement with a private energy service company (ESCO). The ESCO will identify and evaluate energy-saving opportunities and then recommend a package of improvements to be paid for through savings. The ESCO will guarantee that savings meet or exceed annual payments to cover all project costs. If savings don't materialize, the ESCO pays the difference. To ensure savings, the ESCO offers staff training and long-term maintenance services. Even though we are contracting with Chevron to implement and oversee this project, they are not performing the role of the typical contractor. They will make the equipment purchase, hire an installer, and oversee the entire implementation of this project
including installation, configuration, customer relations, inspection, and training. Additionally, Chevron is guaranteeing the return on investment necessary to have this system pay for itself within a 15 year period.
b. Chevron does have extensive experience with performance contracting. They
recently implemented a project that replaced all of the City of Victoria’s traffic signal bulbs with LEDS which are saving the City approximately $42,000 per annum.
c. Chevron recently completed a $13,827,774 project in Lawton, Oklahoma in which
they replaced 29,000 meters and installed an AMR system just like the system we are proposing for Victoria. We talked directly to Rick Endicot, Finance Director for the City of Lawton, Oklahoma about their experience with Chevron. Mr. Endicot told us that their experience with Chevron was a very good experience and that looking back; he would not change their course of action. He confirmed that they have seen the return on investment that Chevron indicated they would.
Corporation is an American multinational energy corporation headquartered in San Ramon, California and is active in more than 180 countries. It is one of the world's six "supermajor" oil companies. For the past five years, Chevron has been continuously ranked as one of America's 5 largest corporations by Fortune 500 and it is currently ranked 3rd after ExxonMobil and Walmart. In 2011 it was named the 16th largest public company in the world by Forbes Global 2000. Chevron has the resources to implement this project and to financially guarantee our return on investment.
8. Will Chevron use Mlog Leak Detection devices in this project? No, staff made the decision to not include Mlog in the project. Mlog is a leak detection system designed to work with the Flex Net system. The Mlog components are connected to a main water line and detect water movement between the sensors. While we are interested in leak detection on City mains, the additional cost of this technology was not included in this project. We will be providing leak detection to our customers using the Flex Net system because we will have datalogging capabilities with the Flex Net system. That is one of the enhanced customer services that this system will enable us to provide. The actual guarantee on the meter accuracies for this project will be proven by periodic meter testing. 9. Will Chevron guarantee savings? – Absolutely. That is in the contract. 10. No meter can detect dripping leaks – C702 mandates that new 5/8” x ¾” meter be at least 97% accurate at low flows (¼ gallon per minute) and at least 98.5% accurate at intermediate (1 gpm) and high flows (10gpm). Sensus’ PMM meters are AWWA C702 compliant.
11. Industry standard C700 meter is only 5% accurate – C700 is for positive displacement meters, which are not the meters we are using in this case. Residential meters meeting C700 standards must be at least 95% accurate at 1/4 gallon per minute and 98.5% accurate at 2 gpm. 12. Radio frequency is unpredictable – These radios output at up to 2 watts of power (most competitors output at 1 watt) making them much more predictable and reliable than previous rf systems. This system also uses a licensed FCC frequency that is not a shared frequency to avoid interference. We currently use radio frequencies to transmit our critical SCADA system data all over the City with a minimum of problems. If the rf system goes down, the meters can still be read manually. 13. Security - This system uses a licensed FCC frequency that is not a shared frequency. Additional security is provided in the software. Manual read is always available. 14. Meter battery needs replacement – These are 20 year lithium batteries. They carry a 20 year warranty. Replacement, if needed, is easily performed in the field. 15. Future synergies – While we believe that there may be opportunities to partner on billing endeavors in the future, there is not currently a sole source solution to automatic meter reading that is financially beneficial to all parties. The only cities that we know that are metering gas and water or electricity and water on the same system are those cities that own and operate their own gas or electric utility. If there were a system out there, like suddenlink, there would be an on-going charge for collecting and transmitting that data. With this system, the backhaul will be provided by our own fiber optic network so there is no ongoing expense associated with transmitting the data back to the billing office. 16. Alternatives – Reduced levels of manual reading do not provide O&M savings and do not offer enhanced customer service. 17. Competitive Bids – Bids were taken, however, this is performance contracting. The system was selected largely because of its features. 18. Pilot Project – We have tried pilot projects on three separate instances. The systems all work. Some provide different options than others. A pilot project does not result in O&M savings or increased revenue needed to make the system pay for itself. 19. What’s the rush – Every month that we delay, we are capturing less revenue than we could and we are expending more O&M dollars than we need to.
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