New study documents $2.69 billion in benefit from EPB community fiber optic network

by Paul Ciampoli
APPA News Director
January 25, 2021

Tennessee public power utility EPB on Jan. 22 reported that new independent research reveals $2.69 billion in community benefits during the first ten years since EPB built the country’s first Gig-speed community-wide network and used it to establish what EPB said is the nation’s most advanced smart grid power distribution system.

The study was conducted by Bento Lobo, head of the Department of Finance and Economics at the Rollins College of Business at the University of Tennessee at Chattanooga.

EPB serves the greater Chattanooga area. It delivers 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 U.S. to deliver up to 1 Gig 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 internet service provider to make up to 10 Gig internet speeds accessible to all of its residential and commercial customers as a standard offer.

“The true economic value of the fiber optic infrastructure for EPB’s customers is much greater than the cost of installing and maintaining the infrastructure,” Lobo said. “Our latest research findings show that Chattanooga’s fiber optic network provides additional value because it provides high speeds, with symmetrical uploads and downloads, and a high degree of network responsiveness which are necessary for the smart grid and other cutting-edge business, educational and research applications.”

In terms of key community benefits from Chattanooga’s advanced infrastructure, the fiber optic infrastructure directly supported the creation and retention of 9,516 jobs which is about 40% of all jobs created in Hamilton County during the study period.

In addition, according to the study, since Chattanooga’s fiber optic network was deployed, it has helped keep the local unemployment rate lower. This effect has been magnified since the outset of the COVID 19 crisis when fiber optics helped many businesses transition their employees to remote work very quickly.

According to the latest available numbers from the U.S. Bureau of Labor Statistics, Hamilton County’s unemployment rate was 4.7% in November which is significantly lower than Tennessee’s rate (5.3%) and two percentage points lower than the U.S. unemployment rate (6.7%) for the same period.

Moreover, having Chattanooga’s fiber optic network in place allowed EPB to join with Hamilton County Schools and other local and state partners in launching HCS EdConnect, a fiber optic broadband internet service provided at no charge to economically challenged families with K-12 students.

HCS EdConnect is designed to continue providing the service for at least 10 years. Currently more than 12,000 students have internet access to continue their studies from home through HCS EdConnect.

Related to the smart grid’s ability to quickly re-route power around storm damage and other problems, the study documents a 40-55% annual decrease in outage minutes providing EPB customers with an average of $26.6 million in savings each year by helping them avoid spoilage, lost productivity, and other negative impacts.

The smart grid has helped EPB decrease carbon emissions by 7,900 tons through demand management and reduced truck-miles, EPB said.

In 2014, the U.S. Department of Energy designated Chattanooga as a Smart Grid Living Laboratory. Since then, EPB has partnered with Oak Ridge National Laboratory and a range of other national and local research partners, like the University of Tennessee at Chattanooga Center for Urban Informatics and Progress, to play a significant role in more than $110 million in smart city research.

The study also notes that since the deployment of the smart grid EPB has moved up to being among the most efficient utilities in the country,” as measured by the System Average Interruption Duration Index metric, which reduces environmental impact while keeping costs lower for customers.

EPB noted that its fiber optic network has performed well in response to the COVID-19 pandemic with the transition to remote work, online education, and telehealth.

In comparing a typical pre-COVID day (March 4, 2020) to a typical COVID day (December 14, 2020), EPB has seen a 75% increase in the total volume of internet bandwidth usage over the course of the day.

EPB has also seen a 64% increase in peak bandwidth usage which still occurs during the primetime hours of the evening and is correlated to more video streaming. Because Chattanooga has a fiber optic network, the community has been able to transition to more intensive internet bandwidth usage utilizing in-place infrastructure, EPB said.