By Jeremy Schwartz
Peninsula Daily News
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Council members Tuesday will consider a “standstill” agreement with Atlanta-based Mueller Systems, the city’s smart electric and water meter installer, that would stop all work on the project and allow the city and Mueller 60 days to negotiate terminating the city’s contract with Mueller.
The council meeting will start at 6 p.m. in council chambers at City Hall, 321 E. Fifth St.
“The city and Mueller [are] looking to negotiate a potential termination of the contract,” said Craig Fulton, the city’s public works and utilities director.
When asked whether this could mean the city dumping the $4.9 million smart meter project altogether, Fulton said, “Yes, there is that possibility.”
City and county residents opposing the project have attended multiple council meetings since September to voice concerns over privacy and potential negative health impacts of the electromagnetic energy the smart meters would use to communicate with City Hall.
Fulton said the city considering terminating Mueller’s contract was not based on public comments on the project.
“This is purely [a] contractual performance issue,” he said.
The project has been delayed by software problems by at least two years, with the city declaring Mueller in breach of contract in January.
Mueller representatives responded in a Feb. 24 letter that they felt the delays were caused by city personnel changes since the project started in 2010, multiple updates to the city’s computer software and city staff inaction.
The meters are designed to transmit water and electricity usage data wirelessly from homes and business to City Hall and receive information from city utility staff.
If the standstill agreement is approved, Fulton said, the questions of whether smart meters already installed in the city will stay in place and how the city would recoup money spent on the project so far would be part of negotiations with Mueller.
“That’s all up for negotiations over that [time] period outlined in the standstill agreement,” Fulton said.
If any smart meters are removed, he said, there are no plans to replace them with analog meters.
The city likely would install non-transmitting digital meters, he added.
About 2,100 smart electricity meters and 1,200 smart water meters have been installed on residences and businesses across the city. All are still being read manually.
Fulton said Mueller has billed the city about $1.9 million for the project, of which the city has paid about $1.6 million.
Alongside the standstill agreement, council members also will consider a not-to-exceed-$140,000 contract amendment with West Monroe Partners, the city consultant that evaluated the smart meter project in October, for technical support during the city’s contract termination negotiations with Mueller.
“Once you get to discussions of how you terminate a very technical contract like this, we will need those experts,” Fulton said.
The city had inked an $86,500 contract with the Chicago-based consulting firm in October to scrutinize the delayed smart meter project through interviews with city and Mueller staff and by reviewing reams of documents associated with the project.
In February, the firm determined the smart meter project was in “imminent failure” without significant changes made by Mueller.
Fulton said discussions between the city and Mueller over how the company could fix the problems led to the thought of terminating the contract as a possibility, which led to the development of the proposed standstill agreement.
“The benefits of a negotiated termination include a shortened time to achieve a resolution of the contract disputes and a road to mutually agreed-upon conditions for terminating the existing contract,” city staff wrote in memo to council members.
“It would also allow the city to move forward with its assessment of other metering possibilities, as outlined by West Monroe Partners at the City Council’s February 4, 2014, meeting.”
These options included a different smart meter vendor or digital meters that would either transmit usage data one-way or be read manually by city meter readers.
Fulton said moving forward with new meters of some type in the future would require further council discussion and consideration.
“The future [of a] meter modernization program is going to be reviewed,” he said.
Reporter Jeremy Schwartz can be reached at 360-452-2345, ext. 5074, or at firstname.lastname@example.org.