Independent 3rd Party Review of AMI Conversion Saves Utility $2.5M in Project Cost
Overview
Holistic provided independent review services on a 30,000 account AMI conversion to save $2.5M on project
Texarkana Water Utilities (TWU) serves over 70,000 residents and businesses in both Texas and Arkansas. In an effort to improve efficiency and system accuracy, they decided to implement a full conversion to Advanced Metering Infrastructure (AMI) in 2024.
Progress
The project was to be completed through an Energy Saving Performance Contract (ESPC). The Energy Service Company (ESCO) completing the project was selected via Request for Qualification in 2023, prior to HolisticUS being involved.
After approximately 9-months of development, meter testing, and pricing development, the Investment Grade Audit (IGA) was completed.
Per the Texas Local Government Code 302 statute governing Energy Savings Performance Contracts, an independent 3rd party review was required prior to finalizing the contract with the ESCO. TWU issued an RFQ for this service and selected Holistic Utility Solutions. In addition to the mandatory review, they asked for an independent review of project scope and cost as well.
Solution
Holistic Utility Solution and their partners completed a thorough review of the process used in the Investment Grade Audit.
This included review of meter test results, sampling methodology, and application of the data to revenue calculations.
In addition, a full open book pricing analysis was completed on all of the pricing.
Result
During the review, Holistic identified an error in the savings calculation by the ESCO. This error involved improper application of the meter accuracy adjustment to the rate tariff, resulting in an overstatement of anticipated water/sewer revenue of over 30%.
Since Texas ESPC law requires that project savings completely offset project cost, this reduction in savings required an adjustment in cost to ensure the project met the legal terms of the legislation.
Holistic worked with the administration to negotiate the terms of the final contract, ultimately resulting in a savings of $2.5M without impacting the scope of the project.
The end result was a strong scope and contract that will ensure the utility realizes their expected return on investment.
