GLASGOW – For at least another month, the Glasgow Electric Plant Board will continue to waive late fees and it won’t cut off service for nonpayment of bills in light of the increasingly impactful measures being implemented by federal and state officials.
Children have been home from school for nearly two weeks now and a growing number of businesses are being required to cut back services or close completely, and although many of the adults affected will be able to draw unemployment benefits, those are less than full pay and some may not be eligible. No end date can be determined at this point.
Superintendent Billy Ray had initiated those changes, based on the utility’s mission, but he asked his board of directors at its regular meeting for guidance on how to proceed from here. The four members present – and seated farther away than usual from one another to observe social distancing – voted unanimously to carry on with that for the next 30 days, with the plan being to re-evaluate it each month as necessary.
Board member D.T. Froedge was absent. He had declined, via email, an offer to listen in and be able to comment via telephone, saying, “I will as usual be watching, however since there is nothing on the agenda that needs my input, there is no need to connect me by phone.”
The meetings are broadcast on the Glasgow EPB local access Channel 6, as well as via its Facebook page and YouTube channel, the last of which is how the Glasgow Daily Times viewed it, to also observe social distancing.
Ray said that most other utilities, including others in the nation who get their wholesale power from the Tennessee Valley Authority, are taking the same kinds of steps to help their customers, but, he cautioned that the longer this continues, it could start having some adverse effects on the utility’s finances.
“I wish that it could be that that means electricity is free. It’s not,” he said.
He announced some of the other steps the utility is taking to protect its personnel as well as the people they serve, like closing the lobby to in-person traffic and ceasing going in customers’ homes for troubleshooting and installations.
Ray, showing a graphic illustrating electric usage for March so far compared with other Marches, said that due to business closures and such, GEPB has seen roughly a 10 percent to 15 percent reduction in energy sales.
“Of course we’re all worried,” he said of the TVA-powered utilities, “about how this lack of nonpayment disconnects is going to impact us financially. … It’s nice to know that at least we’re not alone on that one.”
He noted that normally, about 88 percent of customers pay their bills on time, 11 percent during the grace period between the actual due date and cut-off date and 0.7 percent after service is disconnected, and 0.3 percent ends up getting written off. He and other staff members had taken “a stab at” estimating how that would change and then how that would translate to dollars.
“We made just a scientific guess that this 88 percent would degrade to 75 percent,” Ray said, and continuing down the line with the other percentages.
The estimate was a potential loss of $178,500 per month, “which, I don’t have to tell you, is not sustainable. We can’t do that forever,” he said.
He’d asked Melanie Reed, the chief financial officer, to come up with some projections on when they would enter a trouble zone, a chart of which he presented, but it had several unknowns factored in. He pointed out that the GEPB has a $3 million line of credit to which it could avail itself if it became necessary down the road but, but of course, that would come at an additional cost through interest accrual.
After a few questions and other points of discussion, the vote was taken.
Later in the meeting, Ray proposed that the utility move in the direction of using the flexibility provided in its new 20-year contract with TVA for developing alternative power sources. He suggested a pilot project for photovoltaic energy production, with 27 solar panels installed initially for research purposes.
He listed several goals in terms of the types of information they would want to gather, e.g. what changes they would need to make to software for power usage, and thus billing, calculations, and it would be used to help determine the feasibility of larger solar projects.
Ray said he thought the estimated cost of about $13,000 would enable them to answer a lot of questions for a relatively small amount.
Board Chairman Tag Taylor said they would need to weigh the two schools of thought between locking down everything and watching what they spend versus long-term fiduciary responsibilities.
“For a small amount of money, we can give [the public] hope that we’re looking beyond what the virus does. We’re planning on still being around and having other developments that will enhance their life,” Ray responded.
Board member Libby Short asked Ray to refresh her memory on how much the majority of the board had agreed to set aside for this general type of project from savings that were part of another incentive from TVA to sign the 20-year contract, and he told her it was $10,000 a month.
“So we should have that $13,000-plus,” she said.
Ray said the amount was small enough that he could have done it anyway, “but I wanted to take your all’s temperature on this before we move forward.”
The eventual vote on that failed with a 2-2 vote, with Taylor and Short in favor and Marlin Witcher and Glenn Pritchard against.
When the Daily Times followed up with Witcher, the Glasgow Common Council’s representative on the board, and Pritchard via telephone Wednesday, they both said their respective votes had to do with the timing and uncertainties related to the coronavirus-response costs than to the project itself, with which they didn’t necessarily have an issue.