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Due north of Chattanooga, a power line runs through a wooded tract called Sale Creek before it dead-ends at the Tennessee River. On Oct. 8, this line lost power. But the lights stayed on for nearly 400 customers because Sale Creek has a new tool to neutralize outages.
Chattanooga’s municipal utility, EPB, had installed a Tesla Megapack battery system on this lonely stretch of the distribution grid back in June. If anything knocked out the line, residents would have 2.5 megawatts/10 megawatt-hours of storage capacity at their disposal while crews fixed the problem.
In this case, utility workers unexpectedly needed to de-energize the line to finish making repairs. EPB was able to switch the neighborhood over to battery power for about half an hour until the job was done. Without the battery, EPB would have had to tell its customers it was cutting off their power on purpose.
“This was the first time we used it in an outage situation,” said Ryan Keel, president of the energy and communications business unit at EPB. “In the future, it’ll be even more unplanned. It’ll be a response to a tree falling through the line or a car hitting a pole or something.”
EPB, which serves some 500,000 people across 600 square miles, plans to roll out more targeted, resilience-oriented batteries to other outage-prone stretches of its grid. The nonprofit public power company currently has a 45-megawatt fleet of batteries, almost all of which were built this year. Besides keeping the lights on, they save money for the whole customer base by lowering the utility’s peak electricity consumption.
The United States is racing toward yet another record year of grid battery construction, as power companies tap lithium-ion batteries to store solar power, improve grid reliability, and free up capacity for new data centers. Most of these batteries are getting installed in California and Texas, where they’ve pushed down wholesale prices and banished heat wave–induced power shortages. Utilities elsewhere, though, too often bide their time in exhaustive studies of the technology, which is new by their standards, despite its mass deployment in some regions.
But batteries are starting to catch on in Tennessee: The Tennessee Valley Authority, the federal entity that generates electricity for EPB and scores of other local power companies, just committed to build 1.5 gigawatts of grid batteries across its territory by the close of 2029, its largest battery deployment by far. The TVA board approved this in its November meeting, setting the stage for the utility to solicit competitive bids from battery developers, spokesperson Scott Fiedler told Canary Media.
And although Chattanooga’s battery buildout is far smaller than what’s happening farther west, or even the installations planned by TVA, it shows how a responsive local utility can adopt new clean-energy technology to make life a little better for its customers. It doesn’t take a massive R&D budget or piles of cash from Wall Street shareholders — just a willingness to embrace a readily available technology.
EPB had explored batteries for years. It researched them with the Department of Energy and Oak Ridge National Laboratory, located 100 miles northeast of Chattanooga. But EPB moved beyond research and installed a solar-and-battery microgrid at the Chattanooga Airport, learning how to work with the technology in practice.
Building on that experience, EPB leaders took a new look at batteries after Winter Storm Elliott rocked the region just before Christmas 2022, leaving TVA short on supply as households cranked their electric heating. For the first time since its founding in 1933, the TVA had to cut power to its customers in order to avoid damaging the grid infrastructure. So it told local power companies that they had to reduce demand by a certain amount.
“That event shaped our strategy,” Keel said. “We want to deploy a large amount [of batteries], because it gives us some local insulation from what may be happening on the TVA system that could impact our customers.”
Homes in TVA’s territory use a lot of electric heating and cooling, which drives grid peaks in both winter and summer. Typical hot summer and cold winter peaks for EPB reach 1,200 megawatts of demand, Keel said, but the utility set a demand record above 1,300 megawatts this January.
That means the current battery fleet meets just a small percentage of the total peak demand — enough to help on the margins, but pretty limited in its impact. Keel said his strategy is to raise that capacity to around 150 megawatts.
“Our hope is that if TVA calls for a 10% required reduction of our load, we can achieve that completely with the battery systems that we’ve put in, and we don’t need to do any unplanned outages to customers at all, like we had to” during Winter Storm Elliott, Keel said.
That battery strategy is akin to an insurance policy, responding to the concerning frequency of polar vortices and extreme heat in recent years. But the batteries don’t just sit around waiting for record cold snaps or heat waves. When the batteries aren’t acting as local backup, EPB puts them to work to save money for all customers.
When EPB buys power from TVA, it pays a demand charge for the hour of highest consumption each month. By discharging the batteries when it looks like a peak hour is approaching, EPB can shave its monthly charge. That lowers the rates it pays to TVA, which puts downward pressure on utility bills for Chattanooga residents.
“We make our decisions based on community benefit,” said J. Ed. Marston, EPB’s vice president for strategic communication. “The more we can keep our costs down operationally, the more we can avoid having to do electric rate increases that impact our customers.”
This dynamic parallels the way Vermont utility Green Mountain Power pays for a program that helps customers install home batteries: The utility dispatches all the small-scale batteries to reduce its peak-demand charges to the New England grid operator.
EPB expects to get payback on its battery installations within five years from the reliability and peak-demand uses. The utility has elected not to run the batteries on a daily basis, because the wear and tear that frequent cycling puts on batteries offsets the benefit of short-term savings on energy charges. (TVA territory doesn’t have wholesale markets that let batteries bid in for various services to make money.)
EPB’s battery buildout puts it ahead of many bigger peers, in both absolute and relative terms.
It’s part of a pattern of the municipal utility embracing new technology to help its residents.
Perhaps most strikingly, the nonprofit installed fiber internet in city homes in 2009, before for-profit telecom providers were widely offering it. EPB became the first company to sell gig-speed internet to an entire community network, Keel said. (Current monthly rate for 1-gig Wi-Fi: an envy-inducing $67.99.)
That fiber also improves the efficiency of the electric grid: EPB piggybacked on the fiber to upgrade its grid network to advanced metering infrastructure, which sends real-time information to the utility and allows it to respond instantly to issues. EPB won accolades for the number of “smart grid” automated devices on its high-voltage distribution system per mile or per customer, Keel said.
“EPB has been incredibly impressive and forward-thinking and on the leading edge — sometimes maybe even on the bleeding edge — of technology innovation, all in the spirit of working for the benefit of their customers,” said Matt Brown, regional vice president for the Tennessee Valley at Silicon Ranch, the major solar developer based in Nashville.
Silicon Ranch is working with EPB on a different kind of money-saving clean-energy project. A large-scale solar project in West Tennessee will produce 33 megawatts for EPB as part of TVA’s Generation Flexibility program, which lets local power companies generate up to 5% of their annual demand. The project is slated to be operating by mid-2028.
That solar development will be located outside EPB’s territory, where there’s more land available. So it won’t be able to help with local reliability in Chattanooga, the way that the community batteries do. But it will generate power at cheaper rates than those of TVA, which itself has cheaper rates than most U.S. utilities, meaning that EPB can pass those savings to its customers.
“Prices are going up on everything from food to energy to housing. This provides them comfort to be able to have some rate stability and flexibility,” Brown said.
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