Jamie Davis

The meeting primarily addressed the consideration and second reading of Resolution 1434 regarding a two percent water rate increase for fiscal year 2022, which was necessitated for funding Century 2 programs and water plant resiliency initiatives. Discussion also included the transition of water usage billing from cubic feet (CCF) to gallons, a process that will occur upon future billing system upgrades. Additionally, Resolutions 1439 and 1440 concerned the establishment of a fiber division. Key discussion points included the benefits of fiber infrastructure for electric utility operations, such as system reliability and supporting advanced applications like the Flyster system, and a proposed low-income customer assistance program for broadband access. The financing for the enhanced grid modernization program, totaling $702 million over ten years, was reviewed, alongside proposed electric rate increases (three successive three percent increases in FY 2022, 2023, and 2024) intended to fund these electric system costs.

The board meeting included the approval of the November 18th minutes. Key actions involved the approval of Resolution 1448, amending the Power Purchase Agreement (PPA) to allocate $6 million in pandemic recovery credits for weatherization ($1 million) and low-income energy assistance ($5 million). Resolution 1449 was passed to request City Council approval for Payments in Lieu of Taxes (PILOTs) for the FY22 fiscal year for electric and gas divisions, totaling approximately $32.4 million, noting a $22,000 decrease from the previous year primarily due to Knox County's decreased equalization rate. Resolution 1450 sought approval to amend the Fiber Division budget from $6 million to $10 million, adding $4 million, mostly for immediate purchase of Internet Protocol (IP) addresses due to rapidly increasing costs and availability issues, which will offset future budgets. The meeting also included the annual Employee Excellence Awards presentation, recognizing employee achievements, including an initiative to re-evaluate the outsourced utility locating process.

The meeting focused on continuing a presentation regarding rate setting principles, followed by a presentation on electricity rates. A significant portion of the discussion centered on analyzing electricity usage and energy burdens for low-income customers, specifically examining data related to LIHEAP participants and contrasting it with broader low-income customer demographics. The presenters emphasized that the assumption that all low-income customers are high energy users is overly simplified, showing data that many low-income customers are actually low usage customers, which suggests that high fixed fees disproportionately penalize this group. Analysis based on census data for the KUB service territory was also discussed to provide a more accurate view of customer impacts.

This document provides a mid-year update on KUB's Fiscal Year 2026 organizational priorities. The plan outlines key initiatives including strategic planning to prepare for a fast-paced future, growing the Fiber Division, and initiating the replacement of the Customer Information System. These efforts aim to enhance long-term success, improve customer experience, expand service availability, and ensure operational efficiency across utility systems, staffing, facilities, and financial management.

The meeting included the administration of the Oath of Office for a new member, Pete Pearson. The Board conducted the Officer Election for 2026, resulting in the unanimous election of Cynthia Gibson as Chair, Kathy Hamilton as Vice Chair, and Mark Walker as Board Secretary. The President's Report covered updates on financial and organizational performance for fiscal year 2026, a report on the recent sale of electric and water bonds, and an update on the Board's Community Advisory Panel (CAP). Technical updates included the completion of the Eastbridge Natural Gas Loop project to improve system resiliency and an overview of proactive electric outage notification procedures.