[lights] that you’re talking about,” Mr. Hilbish said, “and particularly when you’re talking about taxpayer money.”
Electronically similar to computer chips, LEDs send out light when electrons move through semiconductor material. LEDs make more illumination per watt than other lights, and take years to burn out, so governments and businesses are looking to the technology as a means of lowering costs.
The Airport Authority decided to shine a light on its utility costs in May 2007, when it first asked energy services consultants to send in proposals for an energy audit. It took until September 2009 to pick Massachusetts-based consultant Noresco LLC.
The authority contracted to pay Noresco $249,000 for an analysis and improvement plan covering the 9,000-acre facility. If the authority chose to have Noresco manage the recommended improvements, the firm would get a multimillion-dollar contract to produce guaranteed energy savings.
Even as it picked Noresco, the authority worked separately with Imbue and Appalachian to win a grant of as much as $800,000 from the state Department of Environmental Protection to pay half of the cost of replacing its outdoor lights with LEDs.
Imbue’s CEO, Mr. Taylor, is a lawyer and veteran of political campaigns including that of President Bill Clinton. He also worked for two large natural gas companies before helping to launch Imbue.
Nominated to the Port Authority board in 2004 by Allegheny County Executive Dan Onorato, Mr. Taylor made a cameo appearance in a commercial the Democrat ran early in his unsuccessful gubernatorial campaign. Mr. Taylor said Friday that his sales to governmental clients haven’t stemmed from political involvement. “
It’s all about the performance of the products,” he said. In fact, his political involvement occasionally costs him a sale.
When Port Authority recently bought a handful of Appalachian’s lights, for $9,570, Imbue had to stay out of the process to avoid any whiff of impropriety. Port Authority bought Appalachian’s lights instead through The Warren Co., an Erie-based steel fabricator that has a sideline business in light distribution.
Appalachian’s founder and top scientist is James J. Wassel, who entered the LED business after working in wind and solar power. The firm got its first job providing LED street lights to Ellwood City, and later landed jobs providing lights to the Allegheny County Jail and the Pittsburgh Housing Authority, according to Robert W. McAnally, the vice president of Appalachian.
Appalachian buys its components—strips of LED chips, electrical drivers, and the fixtures in which they sit—from manufacturers including some in Pennsylvania and North Carolina. Its 16 employees design and assemble the lights, somehow coming up with a combination that puts out more light per watt than products made by bigger competitors, according to data posted on a U.S. Department of Energy Web site.
How do they do it? “Details, details, details,” said Mr. McAnally, declining to provide them. “I suppose the answer is never being satisfied. It’s always knowing that you can do a little better.”
Appalachian must be “trading off something” to get its superior light-per-watt results, said Jim Mullett, a principal at Bethel Park-based lighting firm LaFace & McGovern Associates. Its LEDs may burn out faster than others, he said.
Mr. McAnally disputes any suggestion that his lights won’t last. The firm’s website posts daily reliability data, which indicated as of Friday that 99.62 percent of the LEDs it had installed were still performing.
In August 2009, Mr. Onorato announced in a news release that Appalachian would supply new lights for the airport.
“Appalachian has a really good reputation for cutting-edge technology,” said Kevin Evanto, the county executive’s spokesman. “We think it’s great because it’s a local company and they’re retaining and creating jobs.”
The news didn’t sit well with local lighting veterans, who felt they’d been kept in the dark about a big contract.
The Airport Authority was “moving forward full-speed with Appalachian Lighting, before we started complaining,” said Pat Gormley, of Monroeville-based lighting broker Gormley Farrington Inc. “We asked for an engineering evaluation to be involved in the decision.”
Noresco then started a painstaking process of inviting bids and performance data. Competing light firms trucked in samples and posted them all over the airport complex, where their output was measured. Noresco demanded a high degree of energy savings and an unusual 10-year warranty, which the distributors scrambled to satisfy.
Mr. Gormley’s firm offered 1,010 parking garage lights, made in Wisconsin, for $421 each. LaFace & McGovern quoted a price of $455 on garage lights from a California firm. Another distributor came in at $585 each for garage lights made in North Carolina.
The authority later agreed to pay to Imbue $562 each for 1,005 of Appalachian’s garage lights.
That decision came after the authority jettisoned Noresco. Airport Authority Executive Director Brad Penrod said the authority opted to pay the energy consultant $249,000 for its audit, but to perform the many energy improvements that it recommended with in-house expertise and other contractors.
Rather than weigh the bids secured by Noresco, the authority decided to buy lights through a state system that allows local governments to pick from quotes submitted to the Department of General Services. Imbue agreed to discount its prices, putting together a package of 1,347 Appalachian lights for the garage, garage deck, and passenger pick-up and drop-off areas, for $1,008,472.
That price is $274,000 more than a similar package of lights offered by Mr. Gormley’s firm.
Mr. Gormley said there’s no established formula for ensuring that municipalities get the right light at the best price. “But I’m not aware of anything in the million-plus dollar range for light fixtures where [governments have] said, ‘Aww, go ahead, let’s hand it to that guy,’ ” he said
“We won on performance,” countered Mr. Taylor. “You can’t look at the purchase price and say, ‘We’re cheaper, you ought to buy us.’ “
The purchase price of a light is just one factor, the others being electricity costs and maintenance, Mr. Taylor said. Appalachian’s is “a better performing product. … And that’s validated through independent testing.”
If the authority hadn’t bought products that created in-state jobs, he added, it would have lost the $800,000 state grant.
Mr. Penrod said that if the authority bought products of a company other than Appalachian, it might not be getting the estimated $160,000-per-year savings on its electricity bill. The contract, he said, is “good for everybody involved.”
Authority officials wrote to the state in August advising that they want to spend leftover grant money on 3,300 more energy-efficient lights. Mr. Penrod said he’ll buy from “whoever’s selling apples at the best price. If you’re selling lemons, you probably won’t get picked.”
Next: the city
Mr. Onorato’s 2009 news release said the airport lighting job would “create and preserve 75 well-paying green jobs for Appalachian Lighting Systems in Ellwood City.” Nearly 15 months later, Appalachian employs just over one-fifth that many people at its humble assembly plant but is eyeing expansion sites as it watches its industry grow.
The county may soon put LEDs in the Kane Regional Hospitals, and may eventually consider the technology for streetlights in parks.
Imbue, Appalachian and their competitors are chasing the region’s biggest illumination job: the coming retrofit of the city of Pittsburgh’s 40,000 outmoded streetlights. The city has gone through a long run-up to an eventual purchasing process, installing demonstration LEDs Downtown and in neighborhoods, while commissioning studies by the University of Pittsburgh and Carnegie Mellon University.
Mr. Gormley said he views the city process as a potential model of competitiveness.
Mr. Taylor is pushing the hometown advantage.
“The city of Pittsburgh has a huge opportunity to realize substantial savings, and if they choose to do business with us, they’ll put a lot of people to work in this region,” he said. “I would argue that there would be something wrong if they city didn’t do that.”
Rich Lord: email@example.com or 412-263-1542