Morristown Utility Systems: Power to the People
Energy Executive Spotlight
Written by Eric Slack   
Friday, 29 February 2008
Morristown Utility Systems: Power to the People - American Executive - RedCoat Publishing
Jody Wigington tells us how this rural utility is bringing water, power, and telecom services to its community.
Premier Business Partners:

Alcatel-Lucent
ETI Software Solutions
Lamar Dunn & Associates
Public utility systems are often accused of being unresponsive to community needs and slow to change. But for Morristown Utility Systems (MUS) of Tennessee, responding to community concerns is a must.
After all, MUS has served this municipal area for more than 100 years. Its electrical services are confined to the Morristown city limits, but its water services are regional, selling to four large utility districts. The utility serves about 14,500 electrical customers and a population base of 35,000 with water services. According to Jody Wigington, general manager, keeping consumer costs low is one of MUS’s guiding principles.

Morristown Utility Systems: Power to the People - American Executive - RedCoat Publishing
Jody Wigington
“We keep our electrical and water losses low, which improves efficiencies and allows us to operate at a lower overall cost,” he said.

MUS’s water and electrical rates both rank ninth in their respective categories in Tennessee. Unlike most power distributors, about two-thirds of MUS’s load is industrial. This helps keep rates lower, as MUS doesn’t have as many miles of line. The power system is kept up through $2 million a year spent on capital projects to build or renovate substations every other year. Wigington said MUS faces about $6 million in power projects over the next three years. Although projects are funded through the rates, MUS will borrow when needed to help keep rate costs down.

Four years ago, MUS also spent $10 million to upgrade its water filtration plant. By doubling capacity, the utility virtually guaranteed its ability to service its water customers for the next 20 years. Over the next five years, there are likely to be another $10 million invested in water delivery infrastructure.

“Those projects will be funded through a combination of rate increases and borrowing. The water system doesn’t generate quite the revenue stream that power does,” said Wigington, adding MUS does long-term studies to identify short-term, intermediate, and long-term needs. “We have those projects in our strategic plan. We don’t have a large capital budget for water like we do in power, where you make significant annual investments on your infrastructure.”

Call to arms
Earning a place as one of the top 10 utilities in the state came about through innovation. One of the utility’s most recent innovations was the addition of telecommunications services to its portfolio a couple years ago. Under the name FiberNET, MUS entered the telecom industry at the behest of a community fed up with the only service in town. According to Wigington, locals were displeased with the services and prices offered by the local cable provider. With the entrance of FiberNET to the local telecom scene, Morristown residents finally had a choice for phone, internet, and cable services, with fiber to the home courtesy of MUS.

“Our studies indicated the project could indeed be feasible, so we went through the processes of getting business plan approval from the state comptroller and funding approval through the city council,” said Wigington, noting MUS’s ability to hold rates steady for almost two years. “The local cable provider raised its rates three times since we rolled out the service. We’re a good 15% below them now.”

MUS built its telecom system with the ability to service all city residents. It also obtained franchise rights to serve residents of the county under the same requirements granted to the local cable provider. However, there is a third party attempting to seat itself at the area’s telecom table. There is pending legislation before the Tennessee State Congress, with the muscle of AT&T behind it, attempting to bypass local franchise requirements. He said AT&T wants to serve video customers only in the most profitable areas. MUS is adamantly opposed to the passage of this legislation.

“We’re waiting to see what the state does. We are ready to compete and feel our products compete very well on a level playing field. We just feel it is fair that everyone should follow the same franchise rules,” Wigington said.

With constant upgrades to existing systems, as well as building an entirely new line of business, MUS has also invested in its own internal systems and staffing. The utility has a full customer service center people can reach over the phone or in person just by walking in the door. Wigington said MUS has very little turnover in power and water, and the utility made sure to hire experienced telecom professionals when it ventured into that arena. MUS also invested in systems to make sure customer service reps are able to respond efficiently to customer inquiries. This includes a back-office system from ETI, a company that provides automated management software solutions for telecommunications.

With the Tennessee Valley Authority set to change rate structures during the next few years, more changes may be on the way. Wigington said MUS is in the planning stages of deploying automatic metering infrastructure. This would allow the utility to read customer meters from the central office, rather than absorbing the cost of sending trucks to every customer location.

Although MUS earned its reputation through expertise in water and power, Wigington is confident the telecom project will prove a valued asset to Morristown residents in the long run, reflecting what must be a pioneering regional attitude. After all, the great Davy Crockett used to call this area home. Dealing with the rising cost of materials, the push for higher environmental standards, and the uncertainty surrounding the AT&T legislation, Wigington must sometimes feel like three-year-old Davy facing down the bear. But let us not forget who won that famous duel.

“We’re creating a different culture, and our employees have done a great job in accepting this responsibility,” Wigington said. “We feel the telecom venture is a good investment that will help bring business to Morristown and improve the quality of life. The fiber optic system is a bullet-proof investment for our future.”
 
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