Dickson Electric Grows Customers But Profits Tighten

Photo: Dickson Electric (Justin Spurlock)

Dickson, TN — The Dickson Electric System reported strong revenue growth and rising customer numbers in its latest annual report — but shrinking profit margins and new long-term debt tell a more complex financial story.

General Manager Darrell Gillespie presented the system’s annual report during the Feb. 2 meeting of the Dickson City Council, outlining both gains and emerging financial pressures.

Revenue and Customer Growth

Operating revenues increased 10.41 percent, reaching $110,080,685.

At the same time, total consumers across DES’s five-county service area grew from 38,634 to 39,152, reflecting steady regional expansion. Kilowatt-hour sales also rose 3.09 percent, a notable jump compared to just 0.21 percent growth the previous year.

The growth signals continued development across the service area — more homes, more businesses, and greater energy demand.

Costs and Margins

Despite higher revenue, net margins tightened significantly.

Net revenues dropped from 8.89 percent of overall revenues to 1.89 percent, representing a sharp decline in profitability.

Several factors contributed to the shift:

• Cost of purchased power: $78,456,033 (71.27% of operating revenues), down slightly as a percentage from the prior year

• Operating expenses: $12,129,709 (11.02% of revenues), improved from 15.59%

• Maintenance expenses: $8,092,088 (7.35%), improved from 10.13%

• Depreciation: $5,053,083 (4.59%)

• Taxes and tax equivalents: $1,845,209 (1.68%)

One major new factor: interest on long-term debt totaling $2,505,508 (2.28% of revenues) — compared to having no long-term debt the previous year.

That new debt load is a key reason overall margins narrowed.

What It Means

Utilities are capital-intensive operations. Infrastructure upgrades, system expansions, and reliability improvements often require borrowing.

While DES improved efficiency in several operational categories, the addition of long-term debt interest reduced net revenue as a percentage of total earnings.

For customers, tighter margins can raise broader questions over time about:

• Future rate stability

• Infrastructure investment needs

• Long-term financial planning

However, the report also demonstrates that DES remains financially stable, with revenue growth, increasing customers, and improved expense ratios in several operational areas.

The Bigger Picture

Dickson Electric plays a dual role in the region — not only powering homes and businesses, but also serving as a financial contributor to local governments through tax-equivalent payments.

As the system grows, so does its responsibility to balance expansion with fiscal sustainability.

The latest report suggests that while growth remains strong, profitability is becoming more compressed — a trend city leaders and customers alike will likely watch closely in the coming years.