EPB Releases Mauldin & Jenkins Report on Street Lights

Chattanooga, TN (September 30, 2014) – EPB has released a report by Mauldin & Jenkins, the independent accounting firm charged with analyzing the process errors that led to questions about billing for public street lights.

The Mauldin & Jenkins report shows that although process errors caused EPB to incorrectly bill for the energy usage of about 6,000 lights, these costs are largely offset by the fact that all 26,000 lights in Chattanooga’s street light system as a whole burned 177 hours longer each year and used 5% more power due to line losses than previously reported. Other offsetting cost factors included facilities charges, the retirement of lights and maintenance charges.

Mauldin & Jenkins began by analyzing thousands of documents including TVA rate schedules and power use studies, EPB process information and work documentation, and the City of Chattanooga’s street light power bills going back seven years. Based on its findings, Mauldin & Jenkins then calculated a “pro-forma” bill for the City of Chattanooga for every month from January 2007 to January 2014.

Warren McEwen, a partner with Mauldin & Jenkins, who led the analysis summarized the findings by reading from the report: “The analysis of the City of Chattanooga street light billings for eighty-nine months indicates a net overbilling of $17,049.”

Harold DePriest, President & CEO of EPB, pointed out that the Mauldin & Jenkins Report provides a good starting point for working directly with the City of Chattanooga and other municipalities to reach a fair resolution on the issue.

“Although the City Auditor and Mauldin & Jenkins reached differing conclusions about some of the offsetting costs, we now have the information we need to sit down with our city partners and find a solution that takes into account all of the factors in this complicated situation,” DePriest said.

According to DePriest, EPB’s efforts to resolve the issue in the near term may be delayed by the lawsuits filed by Don Lepard. “Don Lepard filed his lawsuits even though Chattanooga, Red Bank, and East Ridge did not agree to join him,” DePriest said. “Later this week, we will be filing a motion to dismiss on the grounds that his suit has no merit.”
Despite the lawsuits, DePriest reaffirmed EPB’s commitment to moving forward in partnership with the City of Chattanooga and the other municipalities. “Our goal is to find an agreeable solution for all parties,” DePriest said. “That’s the only way to ensure the best result for citizens of our local communities who are also EPB’s customers.”

EPB is also taking a number of steps to improve its internal processes. The utility has issued a Request for Proposals seeking bids from contractors to conduct a complete physical inventory of all street lights and private lighting in its service footprint. Once the initial inventory is complete, EPB plans to verify its total light inventory on a rolling three-year schedule.