Once again, the staff and city commission of the City of Truth or Consequences are relying on a smart meter vendor to help them decide whether to buy and install smart water meters at the properties of the city’s 3,500 water utility customers.
T or C paid YESCO—Yearout Energy Services Company of Albuquerque—about $60,000 in 2017 to study whether the city should replace electric and water customers’ analog meters with smart meters, according to documents the Sun received from the city in response to an Inspection of Public Records Act request. Unsurprisingly, YESCO’s recommendation was “yes.”
YESCO proposed to sell the recommended equipment for about $9 million dollars to be paid over 20 years, a deal left on the table by the city commission. It declined, not because it had sought and received neutral, third-party advice about the cost-benefits of smart meters. The city commission recognized the price was simply too expensive, according to city commission meeting minutes.
Four years later, YESCO will again be afforded the opportunity to present the reasons why the city should replace its water customers’ analog meters with smart meters at a public hearing to take place at this Wednesday’s commission meeting. By labeling what will be in effect a sales presentation as a public hearing (a governmental fact-finding tool for which official notice must be provided and official minutes kept), the city is again obfuscating YESCO’s status as a vendor, when in fact the company is not a neutral third party giving disinterested advice.
Wednesday’s public hearing will give T or C residents an opportunity to ask questions and to hold the city commission accountable for seeking and providing answers to those questions before it embarks on the second go-round of smart meter purchases. During the first go-round, there were no public hearings to educate the commissioners before they awarded a $1 million-plus contract to Landis + Gyr to supply smart electric meters.
The first, most obvious question that must be answered is: Why is the city considering spending millions on smart meters when it does not have the resources to repair its failing water system infrastructure? T or C’s aging water lines spring 20 to 25 leaks a week—as City Manager Bruce Swingle has been reporting since he was hired in May.
A third-party water system audit conducted in 2019 by Wilson & Company, a national engineering company with a branch in Las Cruces, determined that the city lost 33 percent of the water it pumped in 2015 and 2016. Wilson estimated the water loss for 2017 and 2018 at 38 percent. The cause of these losses, according to Wilson & Company: “poor conditions of the system.” Wilson’s Water System Preliminary Engineering Report made no mention of customer meter-reading problems.
YESCO, on the other hand, states in a document included in the commission’s Wednesday, Oct. 13 meeting packet that more than half of its estimate of T or C’s water losses can be traced to faulty meter readings. YESCO, which describes itself as a “design-build contractor” on its website, asserts that the city has been losing about 115 million gallons a year since 2018. That is equivalent to a loss of 26.6 percent of the water pumped, YESCO states. Using data gathered in its 2017 study, YESCO attributes 14 percent of these losses, which it labels “nonrevenue water,” to antiquated meters producing readings that are too low.
Whether the design-build contractor’s estimated water losses and assessment of their causes are more accurate than those provided by the engineering firm is a question that should be asked and answered.
Another is whether replacing and upgrading T or C’s water system lines, pumps and other infrastructure would result in less “nonrevenue water” and more financial savings than meter replacement.
YESCO’s meeting packet document states that the installation of smart water meters will yield additional revenues of $250,000, but does not specify the timeframe over which these revenues will be collected. As evidence, YESCO cites its own 2017 study, which estimated that the city would gain $200,000 in revenues if it replaced both its electric and water meters with smart meters, although again it did not specify the timeframe. YESCO appears to have made an error in logic. Shouldn’t its estimate of $250,000 in increased revenues from water meter replacement be lower, not higher, than the $200,000 figure it estimated would be gained if both electric and water meters were replaced?
In addition, shouldn’t it be possible for the city to precisely calculate whether it has seen an increase in electric utility revenues due to the supposedly more accurate readings provided by the smart meters that have been in place for about a year on the properties of T or C’s 4,000 residential and commercial electric customers?
YESCO also claims operating and maintenance savings for the water and sewer department will be $40,000 in the first year after analog water meters are replaced. Its packet document provides no explanation of how the savings figure has been calculated.
YESCO’s price for replacing the analog meters of the city’s 3,506 water customers with smart meters is $3.5 million, to be paid over 13 years, according to the document in the commission’s Oct. 13 packet. It appears that YESCO is willing to compensate the city for the smart meter “backbone” already installed by Landis + Gyr, with the appropriate amount to be subtracted from the overall $3.5 million price tag.
There have been no definitive studies on the health effects of daily exposure to high radio-frequency waves by which smart meter readings are transmitted. Again and again, citizens have pleaded with the city commissioners to take into consideration the possible health threats posed by this technology. They should be asked once again to factor the risks to their constituents into their decision making. There are less expensive alternatives to ensure greater accuracy of analog meter readings, as was pointed out by other venders in their responses to the RFP for the smart electric meter purchase.
YESCO’s packet document does not explain its proposed financing terms. Is this a lease-purchase arrangement, with the city owning the equipment at the end of 13 years? Principal and interest are not broken out of the overall price, nor are the costs of the equipment and labor separately identified. These information gaps should be filled before a decision to purchase smart water meters on time is made.
Landis + Gyr charged $1 million-plus to supply more than 4,000 smart electric meters, according to a one-time statement by then City Manager Morris Madrid—still the only public accounting of the replacement project’s cost. By comparison, YESCO’s price seems very high.
As part of its due diligence, T or C should prepare a detailed accounting of the smart electric meter purchase and installation costs and any ongoing expenses in order to assess if YESCO’s offer is reasonable.
The wisdom of buying smart meters over time should also be questioned. Landis + Gyr said during an early 2020 city commission meeting that smart meters have a five-to-seven-year lifespan. If this is true, the timeline for YESCO’s proposed meter purchase is about twice as long as the life of the equipment.
The Sun asked City Manager Swingle in a Sept. 27 email for answers to many of the questions presented here. He declined to offer any of the requested explanations, replying only:
“If [we didn’t hold] a public meeting the small group would throw it in the commissions face for not having [one]. This will be my first opportunity to hear YESCO or any other party speak about smart metering. At this point there is no plan to do anything but educate the city.”