Powerful battles over electricity in North Georgia

CHICKAMAUGA, Ga. -- In a town of fewer than 1,100 homes, Chickamauga is served by three electric utilities.

But most residents don't have any choice over their power supplier, unless they build a new home in certain parts of town.

"It can be a little confusing for some people -- and frustrating for others," Chickamauga City Manager John Culpepper said.

Chickamauga and other North Georgia cities sit along the borders separating the power service territory of America's biggest government utility -- the Tennessee Valley Authority -- and one of the country's biggest investor-owned utilities -- Southern Co.'s Georgia Power Co.

Sprinkled in between are a number of municipally-owned power utilities, including Dalton Utilities and the LaFayette Electric Department.

The patchwork of power providers has evolved over the past 75 years, including the 1963 decision by Chickamauga to switch from Georgia Power to TVA. Chickamauga, one of the smallest distributors of TVA power, was one of a handful of cities in Kentucky and Georgia that decided to join TVA's network in the 1960s.

"That decision to switch to TVA has probably been the finest thing that every happened to this little town," said Jim Ed Pierce, a retired electrician for the Electric Power Board in Chattanooga.

TVA has provided cheaper power for Chickamauga residents, he said.

But not everyone in Chickamauga gets power from the city-owned utility, just as not all citizens of Dalton get their power from the city-owned Dalton Utilities or everyone in LaFayette gets electricity from the city-owned electric department.

As those cities have expanded outward, the city utilities have bumped up against areas already served by Georgia Power or the North Georgia Electric Membership Corp. -- the largest of TVA's distributors in Georgia.

To settle the boundary disputes, the Georgia Legislature adopted the Territorial Electric Service Act in 1973. The law provides that the utility providing service to any residential or small commercial customer at the time of the act would continue to be that customer's provider, regardless of city boundaries.

New homes built since then have a choice of suppliers if they are close enough to a utility's service or if all the utilities in an area agree.

Mr. Pierce, whose Jewell Street home was not originally with Chickamauga's electric system when the changeover occurred, took matters into his own hands when the city utility extended a transmission line near his home. He made sure he got on the city utility service and carried his electric meter from Georgia Power, which previously served his home, down to the company's local office.

"I wanted to make sure I got TVA power because I knew it was cheaper," said Mr. Pierce, a 91-year-old retiree who built his home in Chickamauga in 1946.

But Mr. Pierce's neighbors are still hooked up with Georgia Power. A few blocks away, a senior citizens housing complex, the Village of Chickamauga, gets its power from North Georgia Electric.

Chickamauga's biggest electricity user, the Shaw Industries plant on Highway 27, is served by Georgia Power. While that limits sales by the city-owned utility, it helps the city with its finances, Mr. Culpepper said.

The franchisee fees and taxes paid by Georgia Power to serve Shaw, formerly SI Industries, has allowed Chickamauga to go without any city property tax for the past nine years, he said. Chickamauga residents pay only school taxes and local sales taxes.

"In many ways, we benefit by having Georgia Power serve our area, even while our residents get cheaper power by also having TVA serve our city," Mr. Culpepper said.

Large electric users get more choices for a supplier, if they are in an area where competing utilities are willing to extend electric lines to offer service. Georgia law allows users of more than 900 kilovolts to be served by any willing utility.

"We compete quite frequently with Georgia Power," said Ron Hutchins, president of the North Georgia Electric. "It's a competitive market for large industrial customers, and I think our region benefits greatly as a result."

Two years ago, Georgia Power outbid EPB of Chattanooga, which serves Rossville, Lookout Mountain, Ga., and other homes and businesses along the Tennessee border in North Georgia, for the right to serve the new Heritage High School in Catoosa County.

"Georgia Power has more flexibility in their rate structure to get their foot in the door," EPB President Harold DePriest said. "That's one case where we are on one side of Battlefield Parkway and they are on the other and we both have power lines down that road."

By extending service to the new high school, Georgia Power has effectively punched through part of the so-called fence around TVA's service territory that Congress erected in 1959. The congressionally imposed boundary for TVA prevents the utility from selling power outside its service territory on an ongoing basis and removes any requirement by TVA to transmit or wheel power to customers within the Tennessee Valley.

"If someone wants to build a power line into Chattanooga to serve residents here, they could do it, but it wouldn't make much economic sense," Mr. DePriest said.