EPB board hikes residential electricty rate by 3.5 percent, cites 'extreme weather' as one reason

EPB board hikes residential electricty rate by 3.5 percent, cites 'extreme weather' as one reason

Rates to cost homeowners $5 extra per month; hike blamed on weather

June 27th, 2015 by Tim Omarzu in Local Regional News

By the numbers

$588 million: EPB electric system>$131.1 million: Fiber optic system

3 percent: Average employee raise

475: EPB employees

Source: EPB

 

The cost of electricity will go up by $5 a month for the average Chattanooga resident on July 1 after EPB directors unanimously approved a 3.5 percent rate hike Friday.

Extreme weather — hotter summers and colder winters, both of which produce bigger storms — was cited by EPB's President and CEO Harold DePriest as a reason for the rate increase, the first since 2011.

"For 15 years, I budgeted about $2 million a year for storm restoration work," DePriest told the board at its regular business meeting. Now that's climbed to $6 million annually — punctuated by tornado-ravaged 2011 when, he said, EPB spent $26 million fixing storm damage. Federal Emergency Management Agency funds helped offset that, he said.

The board also adopted budgets: $588 million budget for EPB's electric system and $131.1 million for its fiber optic system. The budgets allocate an average 3 percent raise for the utility's 475 employees.

No one from the public spoke at the board's meeting, which was held at 8:30 a.m. in a seventh-floor room with limited seating. Visitors have to sign in and get an electronic key pass from a security guard that lets them access the otherwise locked-off seventh-floor elevator stop.

Public response varied Friday afternoon among EPB customers interviewed downtown on Martin Luther King Boulevard.

"My initial reaction is, well, that's probably something that they have to do," said Ann Coulter, who was eating at the Camp House coffeeshop. "I'm a big fan of EPB. It's owned by the customers, so I trust how they go about making decisions."

Roshanna Stallings, owner of Roshanna's Hair & Beauty Bar, wasn't happy.

Joe Ferguson, right, chairman of EPB's board of directors, responds to questions in this file photo. EPB Chief Operations Officer David Wade, Hamilton County Mayor Jim Coppinger and Chattanooga Mayor Andy Berke, from left, listen.

Joe Ferguson, right, chairman of EPB's board of...

Photo by Tim Barber /Times Free Press.

"Again? That's crazy. We're already paying enough now," Stallings said, though she was resigned to the increase. "You got to come up with the money. Can't close your business because you can't pay your lights."

The cost of storm repairs would be even higher, DePriest said, if it wasn't for EPB's "smart grid" electrical distribution system. It can react automatically to some types of power outages and reduce the time customers are without power to seconds, rather than hours, EPB says.

"Our costs would be substantially higher if we didn't have those automatic switches out there," DePriest told the board.

Another reason for the hike, EPB officials said, is the effect of large monthly temperature fluctuations on the peak energy demand charges that EPB pays to the Tennessee Valley Authority, which wholesales electricity to EPB.

The new rates apply to EPB's residential, commercial and smaller industrial customers.

For residential customers who use a monthly average of 1,000 kWh of electric power, the hike will mean an increase of about $5 monthly, EPB said. The 3.5 percent hike includes increases to EPB's base energy rate and the fixed monthly customer charge.

DePriest doesn't expect rates to increase again soon.

"We anticipate that we will make this rate increase last several years," he told the board.

Contact staff writer Tim Omarzu at tomar zu@timesfreepress.com or www.facebook.com/tim.omarzu or twitter.com/TimOmarzu or 423-757-6651.


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