As Volkswagen prepares to start making cars next year at its $1 billion Chattanooga plant, a number of prospective industrial and commercial businesses are considering locating in the Chattanooga area.
“We’re currently talking with 17 different industrial prospects, the bulk of which are related to the new Volks-wagen plant,” EPB President Harold DePriest said Friday. “We are beginning to reap the benefits of Volkswagen, and we expect to see more economic growth as a result.”
Mr. DePriest said EPB also has been contacted by developers with plans for up to 10 new hotels and restaurants in the utility’s service territory.
Although many of the prospects may not come to fruition, Mr. DePriest said he expects both business and residential power sales to grow from new customers in the next year.
After falling nearly 8 percent over the past three years, EPB is forecasting a 3.9 percent increase in electricity sales in the fiscal year that begins Oct. 1. The fastest growth will come from industrial customers, who cut their power loads by more than 12 percent since 2008 due to the recession.
“When you look at other communities that have landed auto plants, it usually takes about three years for them to hit their stride,” Mr. DePriest said.
EPB directors on Friday adopted electric, video and telephone system budgets for the next year totaling a record $611.2 million, or nearly 22 percent more than in the current year.
“We have done our job during this downturn to invest in the future and now we’re starting to see a substantial amount of growth,” EPB Chairman Joe Ferguson said.
Much of the projected increase reflects EPB’s expectation that TVA will continue to raise electricity rates. But the utility also expects to more than triple its revenues from the fiber-optic video and Internet service it launched to residential customers last September.
EPB expects to have nearly 11,000 customers by the end of this month and 20,000 customers within the next year hooked up to either its video, Internet or telephone services. Although the startup of the cable TV venture was two months later than expected, EPB is ahead of its budget projections and expects to cut its net loss for the startup video venture next year to under $2.3 million and grow revenues to nearly $26.9 million.
COMING SUNDAYVW site getting larger water line.BY THE NUMBERS* 171,193 — Number of EPB electric customers expected in fiscal 2011, or 1,036 more than the current level* 50,000 — Number of “smart meters” to be installed at Chattanooga-area homes this year* $611.2 million — Total revenue forecast for fiscal 2011 from EPB’s electric and fiber-optic programs, up 21.6 percent from the current year* $15.8 million — Tax equivalent payments to local governments from EPB, Chattanooga’s largest taxpayerSource: EPB
The loss is less than half what EPB forecast in its original business plan for its TV, Internet and phone services. But the Tennessee Cable Telecommunications Association, which represents rival cable TV providers, warned in a recent study that none of the municipal power utilities that have started TV services have turned a profit.
Aided by a $111 million federal grant, EPB also plans to install “smart meters” on 50,000 homes in the next year to better control its electricity delivery and pricing. If TVA agrees, EPB also could begin to start testing new time-of-day pricing using the new meters.
The growth of EPB in the next year also will generate more tax revenue for local governments, although the increase may not be as much as the 33 percent jump in property taxes sought by Mayor Ron Littlefield. The new EPB budget projects the city utility will pay area governments $15.8 million in tax-equivalent payments as a share of its growing revenues. That’s nearly 22 percent more than what was paid this year by EPB, which is the largest taxpayer in the city of Chattanooga.
EPB Director John Foy also noted that EPB’s investment in video, Internet and telephone services using the fiber-optic lines also used by the electric system generated enough extra money in lease payments to the electric system to hold power rates 2 percent below what they otherwise would have been.
“Because we’ve got into residential Internet and video, we’re going to be saving money for all of our customers,” he said.