Q&A with a City Manager: Utilizing ESPCs to Modernize Infrastructure

In the summer of 2022, the City of Alamo, TX partnered with Schneider Electric on a comprehensive infrastructure modernization project. The city aimed to address outdated water metering, upgrade lighting sustems, and improve operations citywide. Schneider Electric awarded the city with a sustainability innovation award for the benefits that resulted from this initiative, including major decreases in utility and resource usage.

Here's a Q&A with Alamo's City Manager, Robert Salinas on the impact this project has made for Alamo. (The following is an excerpt from Energy Service Today's article "The City of Alamo Funds $4.4M Infrastructure Modernization Project with Energy Savings." Read the full article here.)

ESM: What led the City of Alamo to pursue an infrastructure modernization project?

Salinas: One of my goals was to progress the City into considering modern technology ideas. For example, when I came on as City Manager, we did not have an online payment platform. My hope was to bring some effiencies to our city operations and city residents with the implementation of modern technology, like paperless online bill pay and using online forms—simple things. 

We received positive feedback as changes were made, so when we started to experience many issues with our water meters, I took the same approach: How can the City raise the performance standards for our residents? 

We had 20+ year-old mechanical water meters out in the field. The meters did not provide accurate measurements, and we often ran into issues finding replacement parts because of  how dated they were. We had water loss because they did not perform well, and residents did not have the ability to see in real-time how much water they were using. We routinely ran into issues with the pace of billing; if a technician could not physically go out into the field and read the meters, we wouldn’t be able to complete the meter reads on time. Overall, it was a significant problem faced by the City and a point of frustration for Alamo residents. 

After the smart meters were installed, getting a read is literally by a touch of a button. It’s very easy, and billing is automated. I’m not getting complaints anymore. 

ESM: Was the lighting upgrade part of this project’s initial scope, or was that an opportunity identified after the project started to develop? 

Salinas: Our primary focus was on implementing smart water meters. The LED lighting project came about as the project developed. When we started to explore the automated water 
meter project, we were unaware that we could fold the lighting upgrade into the project. As we partnered with Schneider Electric, they brought to our attention that adding the lighting 
upgrade was possible, and the savings from the lighting upgrade would help pay for the overall project.

We saw this as very beneficial to the City, reducing the lighting utility bill and the amount of energy being used. The lighting upgrade took place at a very large sports complex that has four baseball fields. It was a win-win: the City is saving money and energy, and the sports complex now has high-performing lighting.

ESM: Were you aware of how the City would fund the project? 

Salinas: As I started in my role, the City was working through how the project would be funded. Schneider Electric approached us about the prospect of executing the project with an Energy 
Savings Performance Contract (ESPC).

Before we committed to any project scope, Schneider Electric offered to complete an Investment Grade Audit (IGA). They looked at our infrastructure as a whole and provided a comprehensive report that included all upfront costs, energy savings, and operations and maintenance costs. 

We knew exactly how much it would be and were confident in the ESPC model. I felt very confident moving forward. If the savings figures they presented and committed to were wrong, they would be responsible for paying for the difference because Schneider Electric contractually guaranteed the energy savings. 

Again, it’s a win-win. It just made sense to us.

ESM: What were some takeaways or challenges from this project that could be shared with other municipalities interested in a project like this? 

Salinas: Thankfully, we did not run into any major issues outside general challenges during COVID-19. 

Really, our largest hurdle was just communication. As a municipality, our constituents are our bosses. We are here to serve them, and transparency is critical. If we are going to be spending millions of dollars on a project, we better have a good reason why. We put a large effort towards a communication and media plan. 

As much as possible, we inform. For example, if you walk into our lobby today, you’ll see a banner sign that shows the savings that we have already gained and the savings we will 
achieve over the next 20 years. 

We also educated our residents on the new customer portal, where they can see their water usage and what they are spending. We want people to look at everything that’s being 
sent regarding their water usage. If they aren’t home and the data shows that no water is being used, that’s a good thing—that means there are no leaks. 

Another thing to take into consideration is the impact of installing new technology. We had to retrain our staff, and these meters were completely different from traditional mechanical meters.

For more information on how Schneider Electric helps public entities tackle their top priorities with utility savings, visit perspectives.se.com/government