EPB
The Electric Power Board of Chattanooga (EPB) is a municipally owned, not-for-profit public utility that delivers electricity, fiber-optic broadband internet, television, and telephone services to approximately 180,000 customers across Hamilton County, Tennessee, and parts of seven surrounding counties.[1][2] Established in 1935 under the authority of the Tennessee Valley Authority (TVA), EPB began distributing wholesale hydroelectric power to its first residential customers in 1939, rapidly expanding access to affordable electricity that spurred industrial and economic growth in the region.[3][4] In the early 2000s, EPB pioneered one of the first citywide fiber-to-the-premises networks in the United States, achieving symmetric gigabit-per-second internet speeds by 2010, which earned recognition as the world's fastest residential broadband at the time and attracted tech startups and remote workers to Chattanooga, often dubbed "Gig City."[3][5] This expansion integrated a smart grid system, enabling automated outage detection and real-time energy management, which has deferred electricity rate increases for over a decade through revenues from telecommunications services.[6][7] EPB's initiatives have not been without challenges, including legal opposition from private cable providers like Comcast, who sued in 2008 to block the fiber rollout on grounds of unfair competition from public funds—a case EPB won, affirming the project's separation of utility revenues.[8] More recently, EPB faced scrutiny over streetlight billing discrepancies with the City of Chattanooga, resulting in a 2016 admission of overcharges exceeding $1.2 million, which were refunded following an audit.[9][10] Governed by a five-member board appointed by the Chattanooga City Council, EPB operates as a distinct legal entity while prioritizing community reliability and innovation over profit.[11]History
Founding and Early Development (1930s–1950s)
The Electric Power Board (EPB) of Chattanooga was established in 1935 amid efforts to provide affordable electricity to residents through distribution of power from the federally created Tennessee Valley Authority (TVA). On March 12, 1935, Chattanooga voters approved a referendum by a 2-to-1 margin—over 19,000 in favor and approximately 8,000 against—to issue bonds funding a municipal power system, challenging the dominance of the private Tennessee Electric Power Company (TEPCO).[12] [4] That year, the Tennessee legislature enacted a private act creating EPB as an independent authority under city oversight, with directors appointed by the mayor, tasked specifically with acquiring and distributing TVA-generated electricity to enhance economic development and quality of life.[3] [8] EPB signed a 30-year contract with TVA to receive power from dams such as Norris Dam, rehiring nearly all TEPCO employees to build infrastructure while negotiating the eventual purchase of private assets.[12] Operations commenced modestly in January 1939, when EPB served its initial six residential customers in East Chattanooga from temporary offices at City Hall, marking the onset of public power delivery ahead of full system acquisition.[3] On August 15, 1939, following protracted negotiations and U.S. Supreme Court rulings affirming TVA's constitutional authority to sell power, EPB finalized the $10.85 million purchase of TEPCO's local distribution network from Commonwealth & Southern Corporation, instantly assuming service for 42,000 customers across a 600-square-mile area encompassing Chattanooga and parts of Hamilton County.[3] [4] This transition integrated TVA's low-cost hydroelectricity—sourced from facilities like the Chickamauga Dam—into the local grid, displacing TEPCO's higher rates and extending reliable service to previously underserved rural and urban fringes.[4] Through the 1940s and 1950s, EPB focused on infrastructure expansion and service reliability amid postwar population growth and industrial demand in the Tennessee Valley. The customer base expanded by 70% between 1945 and 1958, while kilowatt-hour consumption surged 288%, driven by household electrification, commercial development, and regional manufacturing booms.[3] In its inaugural decade, EPB's distribution of inexpensive TVA power catalyzed urban and rural transformation, enabling broader access to electricity that private utilities had neglected, and positioning Chattanooga as a hub for publicly owned utilities in the United States.[4]Postwar Expansion and Electrification (1960s–1980s)
In the postwar decades, EPB sustained its role as a key distributor of TVA-generated electricity, benefiting from the agency's rapid expansion in power production, including the shift to coal-fired steam plants that by 1959 accounted for approximately 76 percent of TVA's output, enabling reliable supply to Chattanooga's industrial and residential users amid regional modernization efforts.[13] This period aligned with TVA's broader strategy of leveraging inexpensive electricity to foster economic development in the Tennessee Valley, where distributors like EPB promoted low-cost power to attract manufacturing and support population shifts through suburban extensions.[14] Despite Chattanooga's overall population decline of 9 percent from 1950 to 1970, EPB extended service to annexed areas and maintained infrastructure across its 600-square-mile territory, originally established via the 1939 acquisition of private assets.[15][4] The 1970s energy crises prompted EPB to pivot from promoting increased consumption—prevalent in earlier decades—to active conservation campaigns, reflecting national shortages and rising fuel costs that affected TVA's operations.[3] This adaptation included public outreach on efficiency, aligning with federal initiatives to curb demand while preserving service reliability for EPB's customer base in Hamilton County and surrounding regions. By the 1980s, as Chattanooga grappled with deindustrialization, EPB focused on grid maintenance and upgrades, such as substation enhancements, to ensure resilience amid economic stagnation.[16] These efforts underscored EPB's commitment to cost-effective distribution, drawing on TVA's long-term contracts to mitigate volatility.[17]Prelude to Broadband and Smart Technologies (1990s–2000s)
In the late 1990s, EPB initiated investments in fiber optic infrastructure primarily to enhance monitoring and management of its electric grid, laying the groundwork for advanced communication capabilities within its power distribution system.[18] [15] This early deployment focused on utility-specific applications, such as real-time data transmission for grid reliability, rather than consumer services.[18] By the early 2000s, EPB expanded its fiber network and launched EPB Telecom in 2000, introducing high-speed data and internet services targeted at local businesses over a three-year rollout period from 2000 to 2003.[3] [18] These offerings provided affordable telecommunications alternatives, enabling competitive access to broadband for commercial users amid growing demand for digital connectivity.[19] In July 2002, the Tennessee Regulatory Authority approved EPB's expansion into broader broadband services, signaling regulatory support for municipal entry into telecommunications.[15] Parallel to telecom growth, EPB began strategic planning for a smart grid in the early 2000s, recognizing fiber optics as essential for integrating advanced sensors, automation, and two-way communication to improve energy efficiency and outage response.[20] This effort culminated in a 2007 board decision to pursue fiber-to-the-home (FTTH) alongside smart grid development, incorporating a high-capacity "Mensa grid" for data-intensive operations.[18] [15] By 2008, after approximately a decade of research, EPB secured bonding authority to construct Chattanooga's Automated Grid, a fiber-enabled system designed for next-generation electric distribution with embedded telecommunications potential.[3] These initiatives positioned EPB to leverage its electric infrastructure for convergent broadband and smart technologies, setting the stage for residential gigabit services in 2009.[15]Gigabit Era and Infrastructure Overhaul (2010s)
In 2009, EPB received a $111 million grant from the U.S. Department of Energy under the American Recovery and Reinvestment Act to deploy a smart grid across its 600-square-mile service area in Chattanooga, Tennessee, which accelerated the construction of a fiber-optic network to every home and business as the communications backbone for advanced grid technologies.[3][21] This funding enabled EPB to install over 17,000 miles of fiber optic cable by integrating it with existing electric infrastructure, facilitating two-way communication for real-time monitoring, automated fault detection, and remote control of distribution systems.[5][22] The smart grid overhaul, completed in phases through the early 2010s, incorporated 170,000 smart meters, distribution automation equipment on 1,700 transformers, and voltage optimization tools, resulting in a 40% reduction in outage duration and a 25% decrease in overall outages compared to pre-upgrade levels by 2013.[5][23] These enhancements improved grid reliability and efficiency, with EPB reporting annual operational savings exceeding $10 million from reduced truck rolls and faster response times enabled by fiber-mediated data analytics.[24] Leveraging the same fiber infrastructure, EPB launched the United States' first community-wide gigabit-per-second internet service in September 2010, offering symmetric speeds up to 1 Gbps to residential and business customers without data caps.[25][26] This initiative transformed Chattanooga into a "Gig City," attracting tech firms and spurring economic growth, with broadband revenue surpassing $100 million annually by the mid-2010s and contributing to over 4,000 new jobs in the region.[27] The dual-use fiber network not only supported gigabit broadband and television services but also enhanced electric operations by enabling predictive maintenance and integrating renewable energy sources more effectively.[28] By 2015, EPB had upgraded portions of the network to support 10 Gbps speeds for select customers, further demonstrating the scalability of the 2010s infrastructure investments, while the smart grid's fiber foundation reduced energy losses and deferred $200 million in capital expenditures on traditional grid expansions.[29] These developments positioned EPB as a model for municipal utilities, though critics noted that ratepayer subsidies from electric services initially cross-funded broadband expansion amid legal challenges from telecommunications competitors.[30]Quantum and Advanced Network Developments (2020s)
In 2023, EPB launched the EPB Quantum Network, establishing the nation's first commercially available quantum network facility purpose-built for testing and developing quantum technologies in networking, computing, and sensing.[31] This initiative leveraged EPB's extensive fiber optic infrastructure, originally deployed for broadband services, to support quantum key distribution (QKD) and other quantum communication protocols, enabling low-latency, secure data transmission over dedicated dark fiber paths.[32] A significant advancement occurred on January 13, 2025, when EPB partnered with Oak Ridge National Laboratory (ORNL) to demonstrate a novel method for protecting quantum networks against signal degradation. The test, conducted over EPB's fiber infrastructure in Chattanooga, utilized automatic polarization compensation to maintain quantum signal integrity over distances exceeding traditional limits without active intervention, addressing a key challenge in scalable quantum repeaters.[33] On April 25, 2025, EPB announced a $22 million agreement with IonQ, a quantum computing firm, to position Chattanooga as the United States' inaugural quantum computing and networking hub. Under this deal, IonQ established a local office to deliver quantum hardware access, networking expertise, application development, and training programs, integrating IonQ's trapped-ion quantum systems with EPB's network for hybrid quantum-classical workflows.[34][35] EPB further expanded its capabilities in July 2025 by hiring a quantum physicist and additional engineers to advance real-world applications in quantum computing and networking, focusing on integration with industries like manufacturing and logistics.[32] In September 2025, EPB Quantum incorporated hybrid computing resources, including an NVIDIA DGX system, in collaboration with IonQ and ORNL, to facilitate seamless transitions between quantum processors and classical high-performance computing for algorithm validation and optimization.[36][37] Looking ahead, EPB Quantum Computing is scheduled to launch in early 2026, providing developers with direct access to physical quantum hardware—distinct from simulators—for algorithm prototyping and commercialization, building on the network's foundational role in fostering a regional quantum ecosystem.[38] These developments underscore EPB's transition from traditional utility services to a pioneer in quantum-enabled infrastructure, supported by public-private partnerships that prioritize verifiable technical milestones over speculative hype.[39]Governance and Financial Structure
Organizational Oversight and Board
The Electric Power Board (EPB) of Chattanooga operates as an independent board of the City of Chattanooga, established by an act of the Tennessee Legislature in 1935 to provide electric power distribution to the greater Chattanooga area.[3] As a publicly owned municipal utility, EPB's governance emphasizes operational autonomy while maintaining public accountability through city-level oversight mechanisms.[11] The board holds ultimate responsibility for strategic direction, financial integrity, and alignment with EPB's mission to deliver reliable energy, communications, and related services that enhance community quality of life.[40] EPB is overseen by a five-member Board of Directors, whose members are appointed by the Mayor of Chattanooga and confirmed by the Chattanooga City Council for staggered five-year terms.[40] [41] [42] This structure ensures representation of diverse professional expertise while tying board composition to elected municipal leadership, fostering responsiveness to local priorities without direct interference in day-to-day operations.[40] The board approves major initiatives, such as long-term power agreements and infrastructure investments, and maintains separation of competitive telecommunications services from electric operations to comply with state law.[43] [44] As of October 2025, the board consists of the following members:| Member | Position | Background |
|---|---|---|
| Vicky Gregg | Chair | Partner at Guidon Partners; former CEO of BlueCross BlueShield of Tennessee; appointed to prior roles including University of Tennessee Board of Trustees. First woman to serve as EPB Board Chair.[45] |
| Mina Sartipi, PhD | Vice Chair | Founding Director of UTC’s Center for Urban Informatics & Progress; expertise in smart city data analytics; reappointed in 2020 for a five-year term.[45] [46] |
| James D. Brown, II | Member | Senior Vice President and Financial Advisor at Pinnacle Financial Partners; over 20 years in banking; appointed September 2024.[45] [41] |
| John Foy | Member | Chairman and CEO of Noon, LLC; former CFO at CBL & Associates Properties; holds a doctorate from the University of Tennessee.[45] |
| Jon Kinsey | Member | President of KPH; former Chattanooga Mayor (1997–2001); involved in downtown development projects.[45] |
Funding, Debt, and Ratepayer Subsidies
EPB operates as an enterprise fund of the City of Chattanooga, funding its operations and capital investments primarily through customer revenues from electric distribution ($613.3 million in FY2024), fiber optic broadband and video services ($178.7 million in FY2024), and other sources, without reliance on general taxpayer funds or direct appropriations.[48] Capital expenditures, particularly for electric system upgrades and grid reliability enhancements, are financed via revenue bonds secured by electric system revenues, with recent issuances including $112.1 million in Series 2023 Electric System Revenue Bonds during FY2024.[48] [49] Outstanding bond debt for the electric system stood at $402.9 million as of June 30, 2024, an increase from $293.3 million in FY2023 and $308.3 million in FY2022, reflecting new issuances to support a $375 million capital plan through FY2029.[48] [47] EPB maintains strong debt service coverage, with a ratio of 3.4 times for electric revenue bonds in FY2024, exceeding the City of Chattanooga's 1.5 times requirement and supported by high credit ratings of AA+ from Fitch and Aa1 from Moody's.[48] [50]| Fiscal Year | Electric System Bond Debt Outstanding ($ millions) | Debt Coverage Ratio (Electric Bonds) |
|---|---|---|
| 2022 | 308.3 | 5.1x |
| 2023 | 293.3 | 3.3x |
| 2024 | 402.9 | 3.4x |