In the US, Cleveland Utilities has voted in favour of applying for a larger loan from the State Revolving Fund (SRF) to progress its plans for an advanced metering infrastructure system for water meters, reports the Cleveland Daily Banner.
The Cleveland Board of Public Utilities recently supported the application of a low-interest loan of US$2.5 million from the State Revolving Loan Program so it can contract a local engineering company to prepare project specifications, advertising, bid coordination and engineering services.
If approved, the loan will have an interest rate of about 1 to 1.5 per cent and include a principal forgiveness of US$500,000, which the utility would not have to pay back.
AMI rollout plan
Ken Webb, CEO of Cleveland Utilities, said: “I hope we will soon know that funding has been secured through SRF under very favourable terms. If approved, the project will continue on an accelerated pace, and we will begin making plans on the funding to complete the phase two installation of the remaining meters.”
The opening phase of AMI and automated meter reading installation is expected to include about 15,000 water meters. Before the project is completed, some 34,000 water meters will have been converted by Cleveland Utilities.
Metering financing options
Without the availability of an SRF loan, CU’s remaining option to finance the costly project would have been municipal bond issues that carried an estimated 4 per cent interest rate. Comparing that to the SRF’s lower interest rate and the half-a-million dollars in loan forgiveness made the decision a lot easier, Webb cited.
Webb said: “… We can take this four-to-five-year project and hopefully condense it down to two to three years, [thereby allowing us] to get this project behind us,” Webb said. “This will allow us to start getting the benefits [sooner] of having AMI meters in the water system.”
Accessing green funds
As one of the benefits of the AMI system will be less Cleveland Utilities vehicles on the road, the project also qualifies for SRF’s Green Project Reserves.
Automated meter reading qualifies as a green project because the whole concept of AMI technology is that meters — electric or water — can be read automatically without the use of meter readers who rely on gas-burning vehicles to run their routes. AMI technology supports the reduction of vehicle exhaust into the air because fewer are on the roads.
SRF is a state loan program operated through the Tennessee Department of Environment and Conservation in partnership with the U.S. Environmental Protection Agency. SRF provides low-interest loans, and partial loan forgiveness, to utility companies across the state in support of water and wastewater projects.
Loans are repaid by utility companies over a designated term and the money is returned to the SRF fund. The money is then recycled into additional loans for other public utilities to support their water and wastewater improvement projects.
If approved by the SRF board, Cleveland Utilities US$2.5 million loan application would become the local utility’s second SRF contract.
The term of the loan is 20 years.