TVA rate increase effective March 1


The first hike approved by TVA since October 2008 will increase monthly power bills $2.50 to $5.50. Typical Decatur Utilities customers using 1,000 kilowatt-hours will see an increase of $3.24, said Electric Manager Glenn Boyles.

Colder-than-normal temperatures in January, which boosted sales and fuel costs, triggered the increase, TVA officials said.

Abnormally frigid temperatures affected the Southeast region serviced by TVA, from Virginia to Mississippi. From Jan. 3 to Jan. 10, TVA set power demand records for a single week, a day, a weekend day and a Sunday, said spokes-man Scott Brooks.

Matching expenses

According to the National Weather Service, average monthly temperatures for January registered below normal in Huntsville, Knoxville and Bowling Green, Ky.

Created after Hurricanes Katrina and Rita when fuel costs spiked, the adjustment allows the authority to match its revenue to its expenses.

Officials evaluate the rate on a monthly basis.

In October 2008, the fuel cost adjustment gained attention when TVA implemented a 16.9 percent increase, which added approximately $11 to monthly bills. Since then, TVA has steadily decreased the rate, more than recovering the record-setting hike.

Local utility officials believe the fuel cost has leveled off and distributors will see little variance month-to-month, excluding an abnormal weather event.

Steady until summer

“I believe the point is here. We probably won’t see much change until the warmer months, when the cost may rise a little,” said Boyles.

Even with the increase, the new rate will be less expensive than the cost prior to the 16.9 percent hike. Starting in March, customers will pay .552 cents per kilowatt-hour. In October 2008, customers were paying 1.806 cents per kilowatt-hour.

As part of the authority’s 156 power distributors, DU, Hartselle Utilities, Joe Wheeler Electric Cooperative and Athens Utilities pass along any fluctuation of the fuel cost adjustment directly to customers.

The authority provides power to more than 9 million customers in Tennessee, Alabama, North Carolina, Georgia, Mississippi, Kentucky and Virginia.

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