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City’s electric utility seeks bond authorization, two new substations and a 1% rate increase to fund infrastructure
Summary
Clarksville Department of Electricity staff outlined a plan to issue revenue bonds to finance two substations, smart‑grid investments and system improvements. The department said a bond plan plus a roughly 1% electric usage rate increase (estimated $2–$4 per customer) would cover rising capital costs and prevent a larger immediate rate hike.
City electric staff presented details of a proposed revenue bond issuance to the council on April 24 that would refund a prior 2015 series and finance new capital investments including two substations, smart‑grid upgrades and system improvements.
Taylor, representing the Clarksville Department of Electricity (CDE), told council that the utility has grown from about 83,000 to 86,000 customers and faces sharply higher procurement and materials costs for distribution equipment. He said transformers and other materials rose substantially since 2019 and that recent substations cost more than earlier projects. CDE proposed a financing package that would refund the 2015 bonds and borrow new money (presented as roughly a $30 million issuance netting $25 million for projects while maintaining total issuance not to exceed approximately $47.2 million when combined with the refunding). CDE described allocating about $20 million to two new substations, $5 million to continued smart‑grid technology deployment, and $5 million for other system improvements.
Taylor said the utility expects to seek a modest customer rate adjustment—about a 1% increase to electric usage charges—rather than finance the work entirely from operations, noting that financing spreads cost over the long useful life of assets. He estimated the typical customer impact at roughly $2–$4 per month and said the new rates would not take effect until after CDE board approval, TVA review and an October effective date.
Taylor highlighted smart‑grid benefits, including automated sectionalizing that can cut the number of customers out during an outage quickly; he presented an example where an outage affecting 689 customers was reduced to 122 within seconds after automated isolation. He told council CDE would pursue the bond sale when market conditions are favorable and that refunding 2015 bonds could produce an estimated $1.4 million savings (market dependent).
Council members expressed support for smart‑grid investments and asked for timing details. Taylor said the utility would seek approvals, monitor bond markets and move when conditions are advantageous. The finance committee had voted to support the bond authorization at its committee meeting; no final council vote on the resolution authorizing bond issuance was recorded in the provided transcript.
