EPB, which already maintains electric rates 2.2% below the average for all TVA distributors, will keep its share of power bills constant for the fourth consecutive year in the fiscal year that begins July 1.
EPB directors Friday approved a budget that keeps its share of electric rates unchanged for the next year. EPB, which last raised its share of power rates in 2015, projects electricity sales in its 600-square-mile area should total $596.7 million in the the next year, up slightly from the $591 million the utility expects to generate from power sales in the current year.
Greg Eaves, chief financial officer for EPB, said the city-owned utility will likely have to raise its local share of rates a year from now to keep pace with wage increases, rising health care costs and other inflationary factors.
“We’ve been very fortunately in the past few years that we haven’t had major major storm costs and the weather has been more consistent for us to avoid a lot of cost spikes,” Eaves said.
EPB electricity sales have been relatively flat for the past 20 years as growth driven by both population growth and business expansions has been offset by greater energy efficiency in buildings, machines and equipment, EPB officials said.
“We work hard to control our costs and look for efficiency, and we’ve been very blessed to have our fiber optic network that has made our power system more reliable and helped hold down power rates by about 7%,” EPB Chairman Joe Ferguson said after the board adopted its fiscal 2020 budget.
The Tennessee Valley Authority will decide its budget for fiscal 2020 in August, which could push up the wholesale portion of local electric rates. TVA also adjusts its power rates each month based upon the fuel costs for generating its power, which has tended to be lower in recent years with heavy rains generating more cheap hydroelectric power and natural gas prices falling well below their levels of a decade ago.
TVA distributes its power across its 7-state region to 155 municipalities and power cooperatives. EPB President David Wade compared EPB’s average costs with all other TVA distributors and found only Huntsville Utilities and Memphis Light Gas & Water were cheaper. MLGW has been trying to convince the Memphis City Council to allow it to raise its local rates, but the council has so far balked at such an increase.
EPB benefits by its EPBFi division which uses power lines to also string fiber optic connections for internet, video and phone services EPB now sells to more than 103,000 of its customers.
EPB’s fiber optics division is projected to generate $173.4 million in the next fiscal year from its internet, video and phone services, up slightly from the estimated $171 million that EPB Fiber Optics should generate in the current year.
EPB’s fiber optics division will pay nearly $48 million to the electric system through shared pole and wire connections and other shared staff and services, helping to keep electric rates 7% below what they would otherwise be if EPB didn’t have the fiber system.
“Our fiber system helps us keep our rates lower, but more than that, it helps us be more reliable with our service,” Wade said.
EPB installed its fiber optic network a decade ago to help build a smart electric grid. The build-out was aided by $111.7 mil- lion in federal stimulus grants EPB received in the biggest such grant to any municipal power utility in the country.
EPB serves more than 160,000 electric customers in the Chattanooga area. It is governed by a five-member board, which has included Ferguson for the past 28 years.
Ferguson is retiring from the board and Chattanooga Mayor Andy Berke has nominated CO.LAB Chief Executive Marcus Shaw as his successor.
“Marcus’ efforts to grow our start-up sector has helped make our regional economy one of the most dynamic in the country,” Berke said in his announcement. “He’ll be a great voice on EPB’s board as they work to deliver more resources, services, and value to all Chattanoogans.”
Shaw’s nomination will go before City Council on Tuesday, July 2, and his board service will begin in August.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.