A Carnegie firm has won the job of lowering city energy bills, Pittsburgh Mayor Luke Ravenstahl announced yesterday, ending a three-month process that some say minimized competition for the lucrative project.
CLT Efficient Technologies Group will now negotiate a contract with the city to replace traffic lights at 610 intersections, and may finish that work this year.
"Through this effort we are reducing the cost of government, becoming more efficient and protecting the environment," the mayor said in the statement. "Not only will we be upgrading our traffic lights, but we're doing it without costing the taxpayers one single dollar."
The city will save a guaranteed $542,000 a year on its light bill, and will pay that amount to CLT for nearly four years -- resulting in a $2 million payday for the firm. After that's paid, the city pockets future savings.
The city's total utility bill is around $8.4 million a year.
The new system, using light emitting diodes, will use one-fifth the energy of incandescent lights. The savings includes maintenance and labor costs because the new lights last longer.
Losing bidder Johnson Controls Inc., of Milwaukee, would have charged the city $3 million over six years, said Public Works Director Guy Costa. Johnson Controls would have charged between $75 and $95 an hour for labor, plus 10 percent overhead and 5 percent profit, Mr. Costa said.
CLT's hourly rates and profit weren't available yesterday.
The deal gives CLT the inside track on future energy improvements, though the city could pick another contractor to revamp heating and cooling systems, boilers and other equipment.
CLT's founding investor is Charles Zappala, uncle of Allegheny County District Attorney Stephen A. Zappala Jr., and a contributor to the late Mayor Bob O'Connor's campaign. The city began considering an energy usage audit at CLT's suggestion shortly after Mr. O'Connor took office last year.
The city invited qualified companies to submit proposals, requiring responses just after Christmas. One firm, Massachusetts-based Noresco, complained that the timing made it difficult to respond and that the city denied it a requested deadline extension.
An extension "wasn't fair to the other two companies" that met the deadline, Mr. Costa said.
Eighteen contractors are registered with the state to perform energy savings consulting for governments. The fact that only two submitted proposals to the city didn't affect the result, said Mr. Costa.
"We got a good bid, a low bid," he said. "It was $1 million less than the other [firm's]."
The lack of competition for the job can't be good, said Elaine Sadowski, a former city energy manager and later a consultant to governments including Allegheny County that were starting energy saving programs like the one the city is now launching.
"It strikes me as very odd because there are so many firms out there doing this kind of work," she said. "When we did the county, I believe we had seven" respondents. Ms. Sadowski was fired by the city in the mid-1990s and successfully sued for wrongful termination.
The Pittsburgh Housing Authority hired Siemens Building Technologies to audit its energy usage in June, and is now taking proposals from companies that would perform millions of dollars in energy-saving improvements recommended in the audit.
Rich Lord can be reached at firstname.lastname@example.org or 412-263-1542.