Electricity consumption declined in Chattanooga during the past year to a 23-year low as energy efficiency and the economic slowdown triggered by the coronavirus pandemic combined to more than offset a 25% increase in local electricity customers since the 1990s.
EPB power sales in the fiscal year ending June 30 dropped to the lowest level since 1997 even though the city-owned utility had nearly 37,000 fewer customers 23 years ago than it does today.
"In the last three months, we've been off the charts on the lower end on kilowatt hour sales," EPB Chief Financial Officer Greg Eaves told the Electric Power Board on Friday.
The drop in sales, which EPB President David Wade said stemmed from energy conservation measures and cutbacks in commercial and industrial sales due to shutdowns during the pandemic, cut yearly electricity sales by nearly 5% from the previous year and generated a $4.2 million loss from the utility's net income from power operations even though EPB continues to add more customers.
Most restaurants, retail stores and non-essential businesses closed or limited some operations during April and most businesses have yet to fully return to normal operations due to the pandemic.
"This year, we've also seen a lot of impact on our sales from reductions in commercial and industrial electricity sales when many businesses were shut down due to the Covid concerns," Wade said.
The Tennessee Valley Authority, which supplies nearly all of EPB's power, said April electricity sales to small commercial businesses dropped by 35% and the power load for major industrial customers of TVA fell by about 10% from year ago levels. TVA projects its power sales in the current fiscal year will be down from $300 million to $500 million from last year, primarily due to cutbacks from the coronavirus.
The typical EPB customer in the past year used nearly one fourth less electricity than a generation ago and TVA projects that power demand will remain stable or continue to decline over the next two decades.
EPB currently provides TVA-generated electricity to about 187,000 homes and businesses in the Chattanooga area, or nearly one fourth more than the roughly 150,000 customers that EPB had in 1997 when it sold a similar amount of power.
"Every time someone puts a new appliance in their house or builds a new home, it's more efficient so the overall energy efficiency of homes in our area is definitely getting better," Wade said.
EPB's yearly electricity revenues totaled $561.8 million in the fiscal year ended June 30, which was $34.4 million below what was budgeted for the year.
EPB benefited in the past year by paying less to TVA, which cut its fuel cost allowances during the past year and offered EPB a 3.1% rebate for signing a new 20-year purchased power contract. The new contract is projected to save EPB about $10 million a year from the rebates, assuming TVA continues to pay the rebates.
Even with the drop in power sales, EPB would have been profitable in the past year except for costs incurred from the Easter night tornadoes that ripped through Chattanooga on April 12 and toppled EPB power lines and other equipment.
The series of tornadoes that hit the area in April caused an estimated $37.5 million of damages to EPB's electricity network. Although the Federal Emergency Management Agency is expected to cover a majority of EPB's costs, the storm is expected to end up costing EPB about $11.3 million.
Despite the drop in power sales, EPB's internet and fiber optics business continued to grow to a record high of $175.4 million in revenues, or about $4 million above the previous year's sales. Although fewer EPB customers are buying video service with the growth of more streaming video options, EPB continues to add more internet customers.
A decade after starting the business, EPB has grown the number of fiber optic customers to 112,500. More than 60% of all homes and businesses in the EPB service territory currently subscribe to one of EPB's internet, video or phone services. EPB fiber optics reported net income of $26 million in the past year.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340
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