TVA Board Approves 1.5% Retail Rate Increase

Thursday, August 22, 2013

The Tennessee Valley Authority board of directors approved a $10.5 billion fiscal year 2014 budget at its meeting Thursday and a 1.5 percent retail rate increase – TVA’s first increase in two years.

The rate adjustment will add about $1.50 to the monthly power bill of a residential consumer using 1,000 kilowatt-hours of electricity.

5px;"> “While we never like to raise rates, this small adjustment is necessary to meet our 2014 revenue requirements and operate our system safely and reliably,” said TVA President and CEO Bill Johnson. “We will also make critical capital investments to keep reliability high and meet environmental standards and contribute to paying down debt.”

TVA’s fiscal year 2014 budget anticipates 4.6 percent lower sales year over year and is about 6 percent less than 2013, including capital expenditures of $3.3 billion for Watts Bar 2 nuclear plant and clean air controls at Gallatin Fossil Plant.

Mr. Johnson said TVA’s priorities include “living within our means” by bringing operations and maintenance expenses in line with recent trends in declining electricity sales and revenues.

“Demand for our product is down and that won’t change anytime soon. The weather, the economy, energy efficiency/demand response, and rate design are all factors,” he said. “We’re working harder than ever to reduce our costs, but they are not declining at the rate of our sales and revenues.”

TVA is executing a plan to reduce O&M costs by $500 million by 2015 with employees and leadership identifying efficiencies, cost reductions and cost avoidance opportunities. Nearly $150 million in reductions have been achieved this fiscal year with plans for an additional $150 million by the end of 2014 and another $200 million in 2015.

“We are taking action to improve TVA’s operations and financial health so it continues to serve the region for years to come,” Mr. Johnson said.

Additional priorities include evaluating future operations of the remainder of the coal fleet, preserving the unfinished Bellefonte nuclear plant as an option for future power generation, continuing to explore Small Modular Reactor nuclear technology, promoting economic development in the region and updating the Integrated Resource Plan, the long-term strategy for TVA’s energy supply as they enter FY14.

Mr. Johnson said that TVA employees remain focused on delivering outstanding service while carrying out TVA’s unique mission of delivering safe, clean, reliable energy at low rates as well as promoting economic development and providing resource stewardship.

The new budget and rate adjustment go into effect with TVA’s new fiscal year, which begins Oct. 1, 2013.

            The board also approved new programs to foster economic growth in the Tennessee Valley. The TVA Valley Commitment Program will give credit to manufacturing customers for their ongoing commitment to the Valley. The Small Manufacturing Rate Program will give small industrial customers a rate alternative for operating during off-peak demand periods. These new programs and enhancements are intended to serve as interim measures while TVA works with customers and other stakeholders on a longer-term rate strategy, Mr. Johnson said.

            In other action, the board:

  • Approved a five-year extension of the Environmental Adjustment; up to $3.5 billion in contracts for fuel and purchased power, and up to $4 billion of long-term bonds.
  • Approved TVA entering contracts for hydroelectric modernization and transmission system construction and modification services.
  • Approved changes to the annual and long-term employee performance goals incentive programs.

 


A Memorial Day Reflection

I wish I could find that combination of words that would capture an inclusive meaning of Memorial Day.  I have attended many Memorial Day programs at the Chattanooga National Cemetery, so many that now they have merged into one memory.  But what stands out is that each year there are more friends and veterans to visit.  Some gave their all many years ago.  And ... (click for more)

Roy Exum: Keep Your ‘Dirty’ Feed

Mark Twain once observed the difference in a cat and a lie is that a cat only has nine lives. You might remember that when you hear that a group of Tennessee Walking Horse trainers just donated two tons of horse feed “to aid and assist in the rehabilitation” of 55 horses that were rescued from deplorable conditions at a West Tennessee farm. The truth is that the horses were taken ... (click for more)

Gilpin, Stocks Victorious In Chattanooga Chase 8K

John Gilpin has done plenty of training in North Chattanooga and is very familiar with the Chattanooga Chase and the series of hills the oldest race in Chattanooga is known for. Jennifer Stocks has done more than her share of workouts on those roads, so she was fully aware of the challenge she faced when the starting horn sounded. Both were overall winners in this unique 8K ... (click for more)

Golf and Chattanooga Have Lost Another Oehmig

  It was a classic Father’ Day golf picture. No, not Jack and Arnie and their kids relaxing at Augusta National with the Dogwoods blooming. But the Oehmig men – Lew, the family patriarch, with his youngest son, King, and his then two grade school age sons Henry and John, all crowded into, what else, a golf cart and donning that Oehmig glasses look – round, turtle shell-colored ... (click for more)