Fitch Ranks EPB AA+ for Financial Performance


Chattanooga, TN (December 6, 2019) – Fitch, a leading national credit rating agency, has reaffirmed EPB of Chattanooga’s financial strength by giving the community-based utility a AA+ bond rating for the second time since 2017.

After completing an analysis of EPB’s continuing financial performance and future market prospects, Fitch determined that EPB’s AA+ rating reflects “very strong revenue defensibility, very low operating risk, and a very strong financial profile.”

Fitch’s analysis also cited EPB’s “robust historical and prospective electric system investments” to maintain Chattanooga’s infrastructure. Fitch noted, EPB’s “five year $279 million capital plan includes expenditures related to system growth, as well as ongoing distribution and technology investments.”

Although Fitch’s analysis focused solely on EPB’s electric division, the rating agency acknowledged the value of the community-wide fiber optic network, “The local economy has also become increasingly diverse, with a growing technology sector supported by EPB's fiber infrastructure.”

Greg Eaves, EPB’s CFO, pointed out that focusing on benefit for customers and the community has led EPB to adopt an extremely successful business plan in which services to electric customers are enhanced by advanced technology.

“We’ve been able to keep EPB electric rates level since 2015 and defer the need to borrow from the bond market while continuing to invest in infrastructure,” Eaves said. Most importantly, our customers have ranked EPB as ‘J.D. Power’s Best Mid-sized Utility in the South’ for customer satisfaction for the last four years.”

The EPB Energy division has built and operates Chattanooga’s community-wide fiber optics network as part of the nation’s most advanced smart grid energy distribution system which has helped reduce the incidence and duration of power outages by about 55%. The EPB Fiber Optics division pays access fees and allocations to the EPB Energy division for the use of the fiber optic network to deliver the world’s fastest internet and other services. The access fees and allocations EPB Fiber Optics pays into the electric system more than cover the EPB Energy division’s annual debt service for all of EPB’s infrastructure investments.


Financial Highlights

  • Both EPB Energy and EPB Fiber Optics continue to add customers, grow revenues, and earn positive net income each year.
  • EPB Energy has kept its electric rates level since 2015.
  • EPB Fiber Optics has never increased internet pricing—in fact, EPB tripled its starting internet speed at no extra charge in February.
  • The EPB Fiber Optics division paid off its initial debt and remains debt free.
  • The EPB Fiber Optics division pays millions each year to the EPB Energy division for the use of the community-wide fiber optics infrastructure and other assets – these payments more than cover the annual debt service for all of EPB’s infrastructure investments.
  • EPB pays local governments more than $20 million each year in support of local schools and public services.


Operational Highlights

  • The EPB Smart Grid has helped reduce outages by about 55%, which saves customers about $55 million per year by preventing productivity losses, spoilage, and other negative impacts.
  • Customer rank EPB as J.D. Power’s “Best Mid-sized Utility in the South” for customer satisfaction for the last four years.
  • EPB Fiber Optics was the first in the U.S. to offer access to Gig-speed internet comprehensively across an entire community. Today, EPB offers up to 10 Gig internet speeds to both residential and business customers as a standard offer.

 

About EPB

EPB serves the greater Chattanooga area by providing world-class energy and connectivity solutions as a means of promoting economic development and enhancing quality of life for our community. We deliver electricity to more than 170,000 homes and businesses across our 600 square mile service area which includes most of Hamilton County as well as parts of surrounding counties in both Tennessee and Georgia. In 2010, EPB Fiber Optics, which offers internet, TV, and telephone services, became the first provider in the United States to deliver up to 1 Gig (1,000 Mbps) internet speeds utilizing a community-wide fiber optic network which is accessible to every home and business in its service area. In 2015, EPB became the first, and to date, only American ISP to make up to 10 Gig (10,000 Mbps) internet speeds accessible to all of its residential and commercial customers as a standard offer.

EPB has also utilized its community-wide fiber optic network to deploy the most advanced and highly automated smart grid power management system in the nation. In recognition of EPB’s groundbreaking infrastructure, the Department of Energy and Oak Ridge National Laboratory are utilizing EPB’s smart grid as a national model for researching and developing best practices. EPB is also the first major power distribution utility to earn the USGBC’s PEER certification for having a highly automated, modernized electric power grid.

EPB is an independent board of the City of Chattanooga which began serving customers in 1939. For more information, go to EPB.com.

 

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December 6, 2019


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