There will be no rate increase from EPB in 2027. Mike Kaiser who has just stepped into the chief financial officer position after the retirement of Greg Eaves, said, despite challenges, the utility tries to space increases out every four years. The last increase was in October 2023. Cost pressures from outside, and especially storms and the higher cost of transformers, drive much of the necessity to increase rates. Although there is no rate increase this year, increased fuel costs were budgeted.

Storms are a major factor driving expenses for EPB. This past year, large storms cost $8.2 million and $1.5 million was spent on small storms. EPB is eligible for reimbursements from FEMA for what is spent to restore power during the biggest events. But the money is slow to come. If a storm qualifies for that assistance, it takes around 18 months for the parties to submit the data to FEMA, for them to come to an agreement, and then receive a contract. It takes about three years before receiving the money. As an example the board was told that it has taken six years for EPB to get all the reimbursements for the storms in 2020. The last three-five percent is still due. And the costs related to the winter storm Fern in January 2026 are not included in this year’s budget because the contract is not expected to be signed until July. This coming year the amount planned for storms is roughly the same amount as the current year at $6.9 million, but that is conservative, said Mr. Kaiser.

Controlling vegetation before it causes power line damage is a major cost for EPB. Now the problem areas are being targeted more strategically with the use of Artificial Intelligence. This year the budget includes $10.2 million for that maintenance. And EPB has a $75 million line of credit to pay for storm damage if it is drastically above what is budgeted.

A fairly significant storm occurred last Sunday afternoon, said Ryan Keel, president of energy and communications. That storm affected about 6,500 customers and illustrates how the utility responds to a damaging weather event. When 40-45 MPH winds began, contract line crews were called to help the EPB crews. Auto restart did a good job and got 12,000 residents’ service back online. EPB does Requests for Proposals relating to storm crews each year. When a storm does occur, they are lined up and are chosen by who can get there the quickest. They are paid on an hourly basis and includes travel time. This gives the ability for repairs to ramp up quickly. Damage from this storm was repaired in 24 hours.

Other expenses that impact the EPB budget include replacement of poles. Around 10 percent of them need to be replaced each year. It would be prohibitively expensive to change all existing overhead power lines to underground, but for the last 25 years, any new power lines have been buried. The installation is slow. but the payback is that repairs do not have to be made. GRIP grants can help pay for installing lines underground. Currently 78 percent of the lines in EPB’s service area are overhead and 22 percent are underground.

The cost of equipment is a big part of the budget and those costs have gone up. There is a need to rebuild the inventory of transformers and, while the cost increases for those have become manageable, that is not true for vehicles. There have been 19 new bucket trucks ordered and the cost has increased 70 percent. And the delivery time for vehicles continues to be long. With the increase of costs, a $40 million storm in 2020, would be $50 million today, said outgoing CEO David Wade.

As a way to flatten the cost curve, said Mr. Kaiser, the goal has become to find areas that EPB can control such as fiber, broadband solutions and the increase of using batteries to provide electricity to customers. Those actions are examples of strategic initiatives. EPB has named Robert Long to serve as president of strategic initiatives. He will lead the efforts to identify, develop and advance initiatives to leverage what EPB offers. New initiatives, plus cutting expenses, are the strategies now being used to take the pressure off high costs. This year $5.6 million was saved by using the new, large batteries that have been installed in strategic locations. TVA bills EPB based on the highest point of usage each day. During those times, which are the most expensive for buying TVA power, EPB has the ability to switch the power source to that being generated by the batteries, saving money. The batteries are also being used if there is a power outage where there is no other way to reroute it. Then the batteries can take over and keep electric power turned on.

Another challenge that EPB is facing is cyber security. There are thousands of intrusions attempted on a daily basis, said Mr. Wade. The business uses both outsourced and in-house security to monitor the system every day. Most threats come from people who click on links that they should not, especially on social media, he said.

At the meeting, Mr. Wade announced that the end of his career at EPB would be September, when he will retire. He said that he feels totally confident with the new team and every person in it to run EPB.

Board Member Jon Kinsey said, “You’ve left quite a legacy here, and I’ve seen what you have done to transform the organization. It’s been a real pleasure.”