Clarksville Electric Department plans $30M bond issue for new substations and smart grid technology

In a recent City Council Executive Session held on April 24, 2025, officials from Clarksville, Tennessee, discussed significant developments in the city's electrical infrastructure, highlighting the need for expansion and modernization to meet the growing demands of its residents. The meeting underscored the city's commitment to enhancing its power distribution system amid rising costs and increasing customer numbers.

Clarksville currently operates 13 substations, with two new facilities expected to come online in May. The city has experienced rapid growth, increasing its customer base from 83,000 to 86,000 in just one year. This growth has prompted the need for additional substations to ensure reliability and redundancy in the power supply. City officials indicated plans to construct two more substations, which will be essential for accommodating future demand.

However, the rising costs associated with building and maintaining this infrastructure pose a challenge. The city spends approximately $140 million annually on power from the Tennessee Valley Authority (TVA), and maintenance costs have also surged. For instance, the cost of transformers has skyrocketed from $1,558 in 2019 to $8,900 in 2023, reflecting broader inflationary trends in construction materials.

To finance these necessary improvements, the city is considering a $30 million bond issue. This funding will allocate $20 million for the construction of two new substations, with the remaining funds directed toward smart grid technologies and system enhancements. The smart grid initiative aims to improve operational efficiency, allowing for quicker response times during outages and reducing the number of customers affected by power interruptions.

City officials also discussed the financial implications of the bond issue, noting that it would likely necessitate a 1% increase in electric rates. This approach is seen as more favorable than a potential 17% rate hike if the city were to rely solely on revenue for funding. By utilizing bonds, the costs of infrastructure improvements will be distributed over time, aligning payments with the long-term benefits of the investments.

As Clarksville continues to grow, the discussions from this meeting highlight the city's proactive approach to ensuring a reliable and modern power supply for its residents. The anticipated bond issue and infrastructure developments are crucial steps in addressing the challenges posed by rapid population growth and rising operational costs. The city plans to move forward with these initiatives, aiming to secure the necessary approvals and favorable market conditions for the bond issuance in the coming months.