Electricity use dims in region

Electricity use dims in region

September 8th, 2009 by Andy Johns in News

As families and businesses look for ways to cut back, many are reducing their electricity use, according to local power distributors.

And that's bad news for Georgia and Tennessee electric companies.

"Overall, across the valley, I think most power distributors are seeing a decline in sales," said Phillip Burgess, a spokesman for the Tennessee Valley Public Power Association.

Many distributors have seen the demand for electricity decrease, which they attribute to industry slowdowns, a mild summer and conservation efforts.

"It's a combination of things," said Jeff Rancudo, a spokesman for the North Georgia Electric Membership Corp.

Mr. Rancudo said the member-owned distributor, which operates in seven Northwest Georgia counties, sold 9 percent fewer kilowatt hours of power from July 2008 to June 2009 than in the previous 12 months.

Decatur, Tenn.-based Volunteer Energy saw its sales drop 3 percent in the same time span. Among its largest industrial customers, demand dropped 10 percent, according to spokeswoman Patty Hurley.

How electrical demand reflected economic activity "is very telling," she said.

The reduced demand has made its way up the lines, as well. The Tennessee Valley Authority released a statement last month saying the utility had seen an "unprecedented decline in sales revenue."

The slowdown seems to be less severe for distributors with customer bases skewed toward residential use.

Chickamauga Utilities Manager John Culpepper said the small distributor's 1,000 customers are almost all residential and are "pretty stable" compared to industrial areas.

"We're not making a lot of money, but we're still keeping the bills paid and the doors open," he said.

In industrial areas such as Dalton, Ga., where manufacturers have closed plants or reduced operations, figuring out the dip in demand is simple, Mr. Culpepper said.

"If they're not running, they're not using electricity, and you've lost that margin to keep your system running," he said.

It's a chain of events very clear to the staff at Dalton Utilities, where power consumption is down 7 percent from last year and 19 percent from 2005, when most carpet companies were working at or near full capacity, according to spokeswoman Lori McDaniel.

So far in 2009, the operating margin for electric service has come in $2.2 million below what was budgeted, Ms. McDaniel said.

As to whether the losses will be made up with rate increases, officials said it's too early to tell.

"I don't think anyone can answer that question," Ms. McDaniel said.

Mr. Burgess said distributors have done a "phenomenal" job of cutting expenses so the reduced demand would not necessarily affect power bills.

"I don't know that you can just say sales are down so rates are going up," he said. "It's a lot more complicated than that."