Marc Lefkowitz | 05/25/10 @ 10:00am
Mayor Jackson's Sustainability Chief Andrew Watterson doesn't understand why GE is crying foul about the deal to bring Chinese Light Emitting Diode (LED) manufacturer Sunpu-Opto and 350 jobs to Cleveland.
"It's a lot like the U.S. automakers' response to the Japanese coming on to their turf in the 1970s and 80s," Watterson observes. "GE made the first LED bulb in 1962, and they used it in calculators and in outer space. Six months ago, we spoke to GE about this and they thought LEDs are only for specialty products like signs. They didn't see them as part of their main line lighting products for another three to five years. I met with them a month ago, and their tune was different. They told me they could make what we're looking for."
GE's presence alone in East Cleveland and Cleveland doesn't translate to what the city wants to do today: Use its purchasing power to attract jobs while reducing its carbon footprint, Watterson says. He compares the city's role to the Cleveland Foundation's who helped create the nationally recognized Evergreen Cooperatives, offering residents a start up business like the Evergreen Laundry by cementing deals for contracts from big University Circle institutions.
"At the 2019 summit, the mayor talked about the need to take bold steps. This is demonstrating how. I never thought we would get Cleveland Public Power to change all its street lights in this short a period of time (3-5 years). It will improve their operations tremendously."
GE is fighting the deal, taking out full page ads in the Plain Dealer and, Watterson anticipates, an editorial in the Sunday PD that mirrors the advertised message that the city is wasting its money.
In a letter to the mayor, GE Lighting President and CEO Michael Petras, Jr. writes that "the reason you do not see installations of tubular LEDs (other than for R&D purposes or product trials) is because they are still novelties and experimental. State-of-the-art fluorescent products are very long-lasting, proven products that offer extremely high efficiency – and cost only a small fraction of what LEDs would cost in this type of application."
GE argues that the city could spend less money and still get more efficient fluorescent tubes at City Hall and see a reduction in its energy use.
"GE will say, "our fluorescent tubes also have a 40,000 hour life expectancy, but fluorescent tubes are allowed to have a 50% failure rate and dim more (than LEDs). Most people don't utilize their warranty because they can't prove which bulbs are covered," Watterson says.
The city plans to replace the fluorescent tubes in its buildings, starting with City Hall, and for its utility company, CPP, to replace all 67,000 street lights. GE doesn't manufacture LED street lights, and Watterson says the company told him they don't plan to make them any time soon. The street light replacement would save 50 million Kilowatt/hours and reduce CO2 emissions by 25,282 tons annually. CPP would have to test the new LED lamp and set the rate with FirstEnergy before estimating its cost savings (CPP pays $12 million annually for its street light bill).
If they replaced all of the bulbs at City Hall with LEDs, Watterson says, the savings during a ten-year warranted period is an estimated $552,000, which translates into a three-year return on investment. The advantage that Sunpu Opto offers translates to: years of manufacturing LEDs, their competitive prices and a design for a straight swap of City Hall's existing T12 fluorescent bulb for an LED T12 without changing the ballast, the mechanical part of a light fixture, Watterson adds.
The hold up is Cleveland City Council, where some members have balked at the city's no-bid contract. City Council will take up the issue again on May 17 at 2 p.m. at its Finance Committee. Watterson is trying to address fears that the city is locked into something it cannot adjust later-the contract has guarantees of performance and low cost matching.
Meanwhile, Watterson is trying to spread the word to sustainability advocates, including his 2019 email list, that "LED lighting is the lighting choice of the future and it is important that we move aggressively forward towards a path that will position Cleveland and our region to take full advantage of this new technology."
Sunpo Opto is prepared to move its manufacturing facility to the U.S. and was attracted by Cleveland's lighting cluster, including GE, which buys LED parts from suppliers like Sunpo Opto. "I see it being able to spur innovation for GE. Sunpu is primarily a parts O&M supplier."
Watterson sees only upside to the deal. Cleveland is attracting a company that is planning on spending an initial $1 million to renovate an existing building in the city and is not taking any tax breaks.
"The mayor said, to make progress we're going to have to move quickly and it's going to piss people off, but we have to do business differently." Or as he writes in his email: We have outlined a path forward that will benefit the City of Cleveland's economy, reduce its expenditures on electricity and reduce our carbon footprint by aggressively moving forward with an LED lighting program. We are doing this by utilizing the City's purchasing power to push innovation towards the future.
The city has posted the following documents on the Sunpu Opto deal and LEDs:
- LED Lighting Fact Sheet
- Cleveland's LED Lighting Initiative (letter from the mayor)
- LED Lighting Initiative Myths vs. Realities