Smart Grid Paybacks: The Chattanooga Example

Author(s): 
David A. Talbot
Maria Paz-Canales
Publication Date: 
Wednesday, 2017, February 1

A new article from the Berkman Klein Center for Internet and Society takes a look at the pay in and pay off from Chattanooga’s investment into its fiber-optic network. The article, Smart Grid Paybacks: The Chattanooga Example, was written by Davd A. Talbot and Maria Paz-Canales.

From the Abstract:

After building a fiber optic network throughout its service territory, the city-owned electric utility in Chattanooga, Tennessee, became the first U.S. company to offer Internet access speeds of 1 gigabit per second to customers. The fiber also serves as the backbone for a sophisticated smart grid.

Data show that the savings produced by the smart grid, plus revenue from access fees paid by the utility’s Internet access business, more than cover the capital and operating costs of the smart grid. What’s more, we estimate this would still be true even if the utility hadn’t received a $111.6 million federal stimulus grant, and instead borrowed the extra amount. We reach this conclusion after counting direct savings in the utility’s operating costs (such as labor, truck maintenance, and fuel), avoided purchases of expensive wholesale power at peak times, and avoided power losses.

The region is also experiencing second-order benefits including economic development and savings to local businesses thanks to fewer and shorter power outages. The data on the following two pages were provided by the utility (known as the Electric Power Board of Chattanooga, or EPB), and include data on second-order benefits originally published by Bento Lobo at the University of Tennessee at Chattanooga.

The authors detail direct and indirect paybacks to the community from the smart grid investment. The grand total? $67.1 million.

Check out the full article here.