Delivering $2.69 billion in community benefit
Independent research documented $2.69 billion in community benefit during the ten years after EPB built America’s first gig-speed community-wide fiber optic network and used it to establish the nation’s most advanced smart grid power distribution system.
The study, conducted by Bento Lobo, Ph.D., head of the Department of Finance and Economics at the University of Tennessee at Chattanooga, documented community value in a range of areas including:
- Job creation: The fiber optic network directly supported the creation of about 9,500 jobs — about 40% of all jobs created in Hamilton County during the study period.
- Reduced power outages: The smart grid’s ability to automatically re-route power around damage resulted in a 40-55% annual decrease in outage minutes saving EPB customers as much as $55 million per year by avoiding spoilage, lost productivity, and other negative impacts.
- Decreased environmental damage: The smart grid has helped EPB decrease carbon emissions by 7,900 tons through demand management and reduced truck-miles.
- Smart City research: EPB has partnered with Oak Ridge National Laboratory and dozens of other national and local research partners to play a significant role in more than $110 million in Smart City Research.
- World-wide media recognition: Since 2010, Chattanooga’s community-wide network and smart grid have earned Chattanooga more than 2,200 media placements with a reach of about 4 billion people world-wide.
- Increased funding for public services: Because of the extensiveness of the fiber optics infrastructure, EPB is the largest contributor to local tax coffers paying more than $20 million per year in support of schools and other public services.
Helping our neighbors in need during the COVID crisis
Throughout the COVID crisis, EPB worked from a mission-driven commitment to help our customers weather the challenge. At the outset, as many of our residential and commercial customers faced financial peril, EPB suspended disconnections for non-payment and waived late fees.
This ensured that customers could maintain the power and connectivity services they needed for earning, learning, and maintaining a sense of normalcy. The measure remained in place for six months to help customers get through the summer and give customers ample time to access special federal COVID utility assistance.
At the same time, EPB partnered with TVA in supporting the United Way Restore Hope Fund, a special initiative to raise funds to assist those financially impacted by COVID-19. EPB launched an in-kind media campaign to promote giving to Restore Hope and joined TVA in providing $320,000 as an investment in economic recovery. In addition, EPB employees donated $20,000. In total, United Way Restore Hope raised nearly $800,000.
While these efforts were underway, EPB worked with community partners to rapidly install more than 130 free EPB Quick Connect WiFi Hot Spots in publicly accessible areas as a resource for families and students who did not have internet at home. By the end of June 2021, EPB Quick Connect provided access for more than 123,419 individual user sessions using 63,617 gigabytes of data (see Bridging the Digital Divide for Education to learn about HCS EdConnect, a partnership that took this initial effort to provide internet access a major step further).
EPB also donated 5,000 masks to Hamilton County Schools and La Paz Chattanooga, as part of the “TN Strong Mask Movement.”
Bridging the digital divide for education
Soon after the COVID-19 crisis began, EPB joined with Hamilton County Schools and other private and public community partners in addressing another rising crisis — the need for at-home learners to have access to high-speed internet regardless of their financial position.
Unlike the stop-gap internet services instituted by other cities, HCS EdConnect addresses the digital divide for education in a lasting way. The new program provides high-speed fiber optic internet services at no charge for at least ten years to every economically-challenged K-12 student in the Hamilton County School system.
Launched in July, the program grew rapidly to provide internet access to about one-third of all Hamilton County Students. Taking into account all of the family members in these households, about 25,000 children and adults now receive internet access through HCS EdConnect.
Qualifying families receive 100 Mbps internet with symmetrical speeds and no data caps provided through EPB’s 100% fiber optic network. Additionally, EPB professionally installs a WiFi router at no charge and provides assistance setting up learning devices.
HCS EdConnect was made possible because Chattanooga’s comprehensive fiber-to-the-home network was already in place. Public and private partners came together in providing $7.9 million to cover the upfront costs necessary to provide the final link in delivering the services quickly and affordably. Thanks to this partnership, HCS EdConnect will not have any impact on EPB operations or the pricing of our services.
Funding for HCS EdConnect was provided through a public-private partnership that includes Hamilton County Schools, Tennessee Department of Human Services - Tennessee Community CARES, BlueCross BlueShield of Tennessee Foundation, Hamilton County, City of Chattanooga, the Enterprise Center, Smart City Venture Fund, Benwood Foundation, Community Foundation, Footprint Foundation, Robert L. and Katherina Maclellan Foundation, Lyndhurst Foundation, and individual donors.
Plans are in place to raise additional funding as necessary to maintain the program on a permanent basis beyond the initial ten years.
Keeping infrastructure strong with $75 million bond issue
Taking advantage of historically low interest rates to keep costs as low as possible for our customers, EPB initiated a $75 million bond issue as part of our regular cycle of financing to proactively invest in maintaining and updating Chattanooga’s smart grid fiber optic infrastructure and other components of the electric system.
The bond issue allows EPB to access additional capital funding while putting off the need for an electric rate increase until at least 2022. Leading up to the bond issue, two of the nation’s top rating agencies recognized EPB’s strong financial health and stewardship by issuing very favorable bond ratings. Fitch re-affirmed EPB bonds as AA+, and Moody’s gave a comparably high Aa1 rating. Both rating agencies forecast a stable outlook.
Because of the low interest rates and the way the bond issue is structured, EPB expects its annual electric debt service will not increase significantly. This includes the debt service for both the new bond issue and a previous bond issue that took place in 2015. Both bond issues are set to mature in 2041.
Since payments from EPB Fiber Optics to the electric system exceed $20 million a year for the use of the community-wide network and other infrastructure, all electric system customers benefit from the revenue generated by EPB Fiber Optics whether they subscribe to fiber optic services or not.
EPB Fiber Optics does not have any debt.