CEO of EPB David Wade, at the monthly board meeting on Friday, took a look back at the way that EPB’s business has evolved since the launch of fiber optics 15 years ago. He gave credit to the board of directors at the time for making the tough decision that “the opportunities it provided were greater than the risk.”
Mr. Wade said in 2007 and 2008 nobody was talking about streaming or video on demand or working from home. The first iPhone was available in 2007, and the Internet really was not on peoples’ minds.
Originally, the most popular service from fiber optics was video. Today, 98 percent of fiber customers have Internet service. The $169 million cost to install the system made it a risky decision, he said. But EPB was interested in things that were innovative and that no other utilities were doing, such as automating its systems.
The first fiber optic customer in EPB’s service area in 2009 had 15 megabits per second (Mbps) of upload and download speeds. It was not long before EPB realized that fiber had unlimited capacity and so Mbps were doubled for all customers.
Today, he said, EPB delivers speeds up to 25 Gig. It has been able to avoid price increases, and in some cases has reduced prices, since services launched in 2009.”
With the introduction of fiber optic services, EPB also began the country’s most advanced smart grid that reduces power outages up to 55 percent each year. That results in savings by avoiding lost productivity, spoilage and other negative impacts. The smart grid had a goal of reducing outages by 40 percent, but during its first 10 years of operation, it delivered outage reductions of up to 55 percent each year.
“Fiber optic service has dynamically changed the community and helps to fulfill the mission to enhance quality of life here,” said Mr. Wade.
The original business plan for fiber optics included 35,000 Internet customers that would be needed to be successful. And it was projected that by 2024 that part of the business would generate $101 million in revenue and would pay $16 million each year in access fees and allocations to the electric system. Actual financial performance has outpaced the projections significantly with fiber optics generating $186 million in revenue in 2024 and $48 million in access fees and allocations. And there are now 131,000 Internet customers.
The money coming from the fiber business that has been paid into the electric system has also strengthened Chattanooga’s electric grid and helped to keep rates lower for customers. An independent study showed that EPB’s fiber optic system and smart grid generated nearly $2,7 billion in community benefit in the first 10 years of operation. “Looking back, there’s no target that we didn’t exceed, said Mr. Wade.
Following EPB Fiber Optics’ success, other community-based providers around the country began seeking advice from the company to use in their own fiber optic departments. That launched another business for EPB, which now provides support, planning and technical services to those Internet service providers that are outside of Chattanooga’s market. That new business generated $6.7 million in the last fiscal year and created local jobs.
Offering fiber to the home service paved the way in 2020 for Hamilton County Schools EdConnect, powered by EPB. This program provides Internet service at no charge to qualifying Hamilton County Schools students and their families with help from community partners. That program is now serving more than 16,000 students and including their family members, 28,000 residents.
Looking forward, on the electric side of the business, Mr. Wade said, are things that have been put in place such as re-routing power when and where it is needed. And EPB is in the process of putting in battery storage to help manage outages and to use as a source of power during peak hours of usage . Now the electric system is broken up and designed to operate from both large and small sources. EPB is building a local mix for sourcing power that results in versatility and being in a better position than before.
And into the future, the utility is trying to understand how Quantum technology fits the business and finding the opportunities that it provides. Learning the properties of Artificial Intelligence is also being studied. The same way that federal grants helped with the risk when fiber optics was developed, grants are becoming available for Quantum technology, said Chairman of the Board Vicki Gregg.
As part of its launch of fiber optics, EPB focused on exceptional customer service. Now 24/7/365 customer service is available. And EPB continues incorporating customer feedback.
Another community benefit is that EPB has more than doubled its annual payment-in-lieu-of taxes (PILOT) from around $8.5 million before fiber optics to almost $18 million in 2024.That makes EPB the largest payor to local governments for schools and other public services.