San Marcos Mercury | Local News from San Marcos and Hays County, Texas

March 12th, 2010
City growth adds costs to smart metering project

031110meter1A new “smart meter” rolls at Tantra Coffeehouse while the band plays on. Photo by Sean Batura.

News Reporter

The City of San Marcos’ effort to implement “smart metering” technology so residents can have nearly real-time data about their water and electricity usage is costing more than planned.

City councilmembers voted unanimously in February to pay $568,780.76 in unanticipated costs related to the smart metering project. Among the additional costs is $270,916.76 more to Eka Systems, Inc., than originally specified by the contract between the city and that firm.

City officials say the smart metering project will cost taxpayers $7,215,888.96, $5,137,815.38 of which will be paid to Eka Systems for hardware, equipment installation and professional services.

The smart metering item had originally been placed on the city council’s consent agenda, which means it could have been voted on without discussion along with the other consent items. However, councilmembers pulled the item from the consent agenda and drilled city staff for about 15 minutes about the extra costs. Councilmembers Gaylord Bose and Ryan Thomason led the charge.

“The first question I ask is, why wasn’t the extra electric and water meters for growth in upcoming years figured in the cost at the beginning?” Bose asked.

San Marcos Director of Public Services Tom Taggart replied that when the smart metering project began four years ago, city staff opted then to be conservative in its requests for project contingency money. Taggart said another reason for the underestimation of costs is that the city has grown more anticipated.

City Manager Rick Menchaca said the rate of apartment unit growth this year increased by 250 units. Menchaca said the rate of home building in the city also increased.

“We had only 100 houses last year,” Menchaca said. “We built 150 this year.”

Bose questioned the requested $5,000 for the rental of storage containers to house meter equipment, and wondered why city-owned buildings could not be used.

“Even though we stored as many as we could in our warehouse and other facilities, it was simply a greater volume than we could protect,” Taggart said. “We wanted those to be very much secured because of the high cost of those meters — the electric meters, in some cases, were as much as $200 each.”

Bose asked why the relay and gateway box utility pole attachment fees ended up being more than budgeted. Taggart said that it is impossible to know precisely how many relays and gateways will be needed until those already paid for are installed and field-tested.

“The number relays and gateways is about double what the initial projection was,” Taggart said. “The propagation of radio signals in advance of installing a system is not an exact science. Where you’re using line-of-site and there are obstacles like trees and surface features, where you may have vehicles parked in between signals emitted from units close to ground level, at ground level, or below ground level … you have to remember that each one of our meters is basically a radio unit. So, there are at this point in time 30,000 radio units communicating with each other back to the main computer through these relays and gateways, and through each other.”

Taggart said Eka Systems, which conducted the radio wave propagation study, agreed to pay for half the cost of the additional relays and gateways.

Thomason asked why city staff did not know beforehand that metal water meter lids would have to be replaced with plastic covers to address the problem of radio transmission interference. The cost for the replacing the metal lids, included in the change order, is $120,713.

Taggart replied that Eka originally thought that the meters’ radio signal strength would be adequate to penetrate the metal lids. Taggart said the idea of inserting antennas in the existing metal water meter lists was explored, then abandoned because the lids were adversely affecting the shape of the radio signals.

“If our contract with (Eka Systems) was to give us radio frequency water meters, then they should have to eat that $120,000, not us,” Thomason said.

Taggart said the contract does not address lid-related radio propagation issues.

“In terms of the contract language, we didn’t have a strong enough basis to argue this point,” Taggart said.

Mayor Susan Narvaiz advised staff to budget for larger contingency costs and to clarify future contract language to better anticipate costs.

“I know that in the future, when you do that, you’ll be questioned on why you’re putting so much in the contingency line, but at least you’ll be explain and have some of these circumstances, because this ongoing,” Narvaiz said.

Thomaides asked Taggart if there have been other change orders on the project.

“This is the fourth change order,” Taggart said. “The first one was a no-dollar amount change — it was a language change. The second deducted $796. The third added $17,700. This fourth change order is the only significant size change order. I would point out that for total project cost, you’re looking at a 3.4 percent addition to the contract total, which, in this scale project with this complexity, I think we can compare it to virtually anyone’s performance and still come out way ahead of them.”

Menchaca and Councilmember John Thomaides said projects of similar scope as the smart metering initiative assume a contingency cost of 10 percent of the total expected cost. Thomaides said the extra cost of the change order will be vindicated by the project’s end result.

Taggart said the smart metering technology could be adapted to conserve resources and save customers money by allowing the city to send automated phone messages to those whose energy or water use spikes, such as during nighttime hours. Taggart said the technology could also be adapted to turn off customers’ individual electrical appliances, which he said would save customers money should they agree to receive that service.

The current smart metering project is intended to allow customers to deal with leakage problems in advance of billing; allow customers to observe their electric and water usage by the hour, and increase the efficiency of city operations and improve the effectiveness of city conservation programs by allowing city staff to more accurately observe water and electricity consumption patterns.

Taggart said the technology will also help the city cut down on unaccounted for water loss, which amounted to 11.8 percent of total use in 2008, 12 percent in 2007, 13.4 percent in 2006 and 11.9 percent in 2005.

Taggart said installation of the smart metering technology, which began in April 2009, will be complete by the end of summer and implemented in the fall.

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0 thoughts on “City growth adds costs to smart metering project

  1. I am glad we are doing smart metering here in San Marcos. This project is laying the foundation for future smart grid initiatives here in our community. My only “complaint” is that I am with PEC (even though we live right here in San Marcos) with no option to be in the San Marcos system!

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