Indianapolis reaches deal with IPL to add 4,000 streetlights, convert existing lights to LED

One year after ending a decades-long moratorium on installing and replacing streetlights, Mayor Joe Hogsett's administration has reached a deal to add at least 4,000 new lights across the city.

Indianapolis Power & Light Co. and the city have agreed to terms on a six-year contract that covers operation and maintenance for 29,642 IPL-owned lights. The deal, which is subject to approval by the Indiana Utility Regulatory Commission and the City-County Council, calls for converting 27,240 lights to LED at a cost to the city of $12 million.

Under the deal, a minimum of 4,000 new lights will be installed over six years, most of which are expected to be in place by 2020. The city plans to pay for the new streetlights with the savings from switching existing lights over to more efficient LED bulbs. Indianapolis could exceed 4,000 new streetlights if it saves more money than expected on operation and maintenance — a point of contention between the city and IPL during negotiations.

For Indianapolis, the deal is a step toward solving a longtime problem. A 2016 IndyStar investigation revealed that the city's 35-year policy of not replacing streetlights has contributed to hundreds of pedestrian deaths since 1980, mostly in poor neighborhoods where residents can't afford to pick up the cost of adding lights. Some of the city's most affluent neighborhood have funded new streetlights on their own.

Hogsett made streetlights a campaign issue when he ran for mayor in 2015. With the city's streetlight contract expiring at the end of the year, Hogsett pledged during his April state of the city address that he would only agree to a new deal with IPL that "puts us on a path toward a full embrace of energy-efficient LED technology within the next five years."

IPL and Hogsett say the new deal accomplishes that goal. The LED conversion is scheduled to be completed within three years of the new contract being approved by the IURC.

"That means Indianapolis streets will be brighter than ever before, and they will be brighter sooner rather than later," Hogsett said.

IPL CEO Rafael Sanchez called the deal a "major transformation for our city."

The contract could have implications beyond Indianapolis. IPL did not previously have a model in place for billing municipalities for LED streetlights. After Indianapolis begins converting to LED, other Central Indiana municipalities could follow. IPL's municipal customers also include Beech Grove, Carmel, Cumberland, Lawrence, Mooresville and Speedway.

"We have reached out to our other municipalities within our service territory to gauge their interest and we're having those conversations right now," Sanchez said. "There is definitely some interest. We're still having those conversations."

Indianapolis' agreement with IPL is the result of more than a year of negotiations fueled by Hogsett's campaign promise. The talks were tense at times.

Hogsett wanted to bring Indianapolis' streetlights under city ownership. IPL rejected that offer, but made a key concession: If the cost of operating and maintaining new LED bulbs is less than IPL is projecting — $30 per light annually — the utility will decrease the city's bill to as low as $15 per light.

That compromise went a long way toward bridging the gap between IPL and the city, which expects the cost per light to be significantly less than IPL's projection.

"I think there's a lot of literature out there on LEDs and on what the operation and maintenance costs are on an ongoing basis," Sanchez said. "The technology has not been out long enough to give it a proper evaluation, so there are going to be differing opinions on what the costs are going to be.

"The compromise we reached was, 'OK, if we believe X and the city believes it's Y, we'll true it up at the end and we'll figure this out as we go. That's the sign of a true partnership, if you ask me."

If operation and maintenance costs come in below IPL's projections, Indianapolis plans to use the savings to pay for more streetlights.

"This is the first time in 35 years the city's going to have a way to get essentially a refund (on) our operation and maintenance costs," said Thomas Cook, Hogsett's chief of staff.

Indianapolis pays IPL $4.5 million per year to operate and maintain its lights. The Hogsett administration expects that cost to remain flat because the city will add more lights as it realizes savings on LED bulbs.

"This will mean streetlights that use less energy and require fewer tax dollars," Hogsett said.

The city has not yet determined where the new streetlights will go. Under Hogsett, the city has received 500 requests from residents for new lights. IPL has completed a study that provides recommendations on factors to consider, but the final decisions will be up to the city.

Indianapolis has about 2,000 streetlights that are not yet slated for conversion to LED. That's because some of them are specialty lights, such as the ones around Monument Circle and in historic neighborhoods, which cannot easily be converted to LED.

In addition to city-funded streetlights, Indianapolis residents, businesses and homeowners associations pay IPL for service to about 21,000 lights. Those privately funded lights, as well as tens of thousands of lights in other Marion County municipalities, are not included in Indianapolis' deal with IPL.

Indianapolis' moratorium on new streetlights began under former Mayor Bill Hudnut and persisted through the administrations of Stephen Goldsmith, Bart Peterson and Greg Ballard.

Hogsett on Wednesday acknowledged that it is somewhat a matter of luck that his administration will make the city's first major investment in streetlights in more than 35 years.

"This is not an idea that I came up with," he said. "I think it's fair to say that Mayor Goldsmith, Mayor Peterson and Mayor Ballard, all three of my predecessors, realized that Indianapolis had neighborhoods that were too dark. But they could never effectively make the numbers work."

The difference is that LED bulbs offer a path to lower streetlight costs, he said.

"It's the savings that have driven IPL and the city to come up with what I think is a great agreement for the city, a great agreement for IPL and a great agreement for the taxpayers of our city."

Call IndyStar reporter James Briggs at (317) 444-6307. Follow him on Twitter: @JamesEBriggs.