OUCHIE. TVA Electric Rates Going up 20% Oct. 1

Thursday, August 21, 2008 11:10 am

OUCHIE. TVA Electric Rates Going up 20% Oct. 1

TVA service area includes Kentucky. Twenty percent increase comes at a very bad time for struggling consumers.

The Knoxville Sentinel is reporting TVA will raise electric rates by twenty percent which will hit customer bills in October.  The increase is the biggest since 1974.
 
The Sentinel reports:
“The new increase will affect both business and residential customers in TVA's seven-state region. The agency serves 8.8 million residential customers and 650,000 businesses across Tennessee, Mississippi, Alabama, Kentucky, Georgia, North Carolina and Virginia.

TVA said that because of the drought, it has purchased 11 percent more power outside its generation capacity than for the same period last year. The federal utility expects to pay $2 billion for outside power purchases in fiscal 2009. Tom Kilgore, TVA president and CEO, compared that amount to an approximately $500 million budget for outside power purchases in 2004.

TVA's quarterly fuel adjustment, a provision approved by the board of directors in 2003, passes along fluctuations in fuel prices to its customers. The base rate is the guaranteed rate customers pay each month, and changes to that rate require a board vote.

The base rate increase will help cover a $375 million shortfall expected for fiscal 2008, $100 million of which will be covered by a short-term loan."