PORT ANGELES — The City Council has unanimously approved a settlement agreement with Mueller Systems over the company’s problem-plagued “smart meter” program.
The pact, approved Tuesday to the applause of a half-dozen onlookers, obligates the city to buy new water meters from the Atlanta-based company and sees the city being reimbursed $759,891.
Mueller signed a $4.9 million contract with the city in December 2010 for a water and electric meter replacement project that has been mired in software issues and project delays.
Those holdups were at the heart of the city’s dissatisfaction with Mueller, not health concerns over the electromagnetic energy the meters use to wirelessly transmit usage data to city staff, City Attorney Bill Bloor said.
“The project wasn’t moving, wasn’t going forward,” Bloor said after the council meeting.
“That was the problem.”
Default letter
In a default letter that Craig Fulton, city public works and utilities director, sent to Mueller in January, he informed the company that its advanced metering infrastructure system, also called AMI or smart meters, failed to reliably transmit electricity and water usage information to the city’s billing system.
In their response, Mueller officials claimed the city was responsible for delays in performance of the contract.
“The end result is a compromise,” Bloor told council members.
“Mueller will take its equipment and leave town.”
Mayor Dan Di Guilio asked why the city would continue to buy water meters from the company.
“It makes sense,” Fulton responded.
“We are satisfied with their water meters.
“It made the negotiations go much smoother.”
Mueller, which so far has received $1.7 million from the city, will reimburse the city $759,891 for the city’s warehoused and installed electric meters, which contain the electromagnetic transmitting devices.
The meters will be returned to the company at company expense.
That portion of the settlement will be used to purchase new electric meters that will replace old, outmoded ones.
Mueller water meters that have been installed will remain, but their innards will be gutted of smart-meter components by the city, with those costs covered by the reimbursement.
The water meters that will remain are valued at $565,596 and are applied toward the settlement.
Water meters that have been warehoused will be returned for credit.
Between now and the end of 2019, the city will purchase from Mueller at least 4,500 residential water meters and any commercial water meters that need to be replaced using $502,183 from the settlement account.
“This ends the AMI project and our obligations under the contract with Mueller,” City Manager Dan McKeen told council members.
“The council’s goal was to replace inaccurate and outdated meters, and this allows us to move forward and accomplish that council-stated goal.”
Dodges litigation
It also avoids costly litigation that could easily have reached $500,000, McKeen said.
“We could spend that and have an uncertain outcome,” he added.
The settlement also leaves the remainder of the $4.9 million budgeted for the project that the city could “leverage” to reduce utility rate increases, McKeen said.
Council members lauded the agreement.
“It looks like the city is coming out ahead on this one,” Councilwoman Sissi Bruch said.
Deputy Mayor Patrick Downie called the settlement “fair and reasonable.”
“The result here is that there has been a collaborative, cooperative result here,” Downie said.
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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 5060, or at pgottlieb@peninsuladailynews.com.
