TVA electric rate increase starts today
20% hike promises to be tough on thousands struggling to pay bills
DUNCAN MANSFIELD
The Tennessee Valley Authority's largest electric rate increase in more than three decades takes effect today as thousands of consumers already are struggling to pay their power bills and avoid service cutoffs.
A 20 percent rate increase from the nation's largest public utility is expected to add $15.80 to $19.80 a month to the average residential bill. It's TVA's biggest rate boost since 1974 and its second this year.
Consumers are worried about how they'll pay the higher bills when other basics such as gas and groceries are costing more, too. Homeowner John Brummett, who works in Nashville's public schools, said his bill has been steadily increasing this year already, and he's worried about another increase with "everything else going up as well."
"I put in new windows and sealed everything. It helped a little but not much," said Brummett, 38.
Nearly all of TVA's 159 distributors in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia are expected to pass the higher rates on to their customers - factories, businesses and some 8.8 million residents.
The electric rate increase was blamed on skyrocketing costs for coal and natural gas to fuel TVA's power plants and a three-year drought.
The higher rates come as major distributors in Tennessee are seeing more utility bills going unpaid.
Before the increase even took hold, utilities were cutting off service more frequently because of unpaid bills. In Memphis, TVA's largest distributor disconnected 69,743 residential customers for nonpayment between January and the end of August. That's 19,481 more homes than the same period a year ago, a 38 percent increase.
Past-due accounts at Memphis Light Gas and Water reached $15.8 million for all services in just the first eight months of the year, compared with $14.8 million in all of 2007.
"It is definitely going to put an additional hardship on our customers and maybe lead to more disconnections for us," MLGW spokesman Chris Stanley said of the fallout from the TVA rate increase on Memphis's 429,000 electric customers.
Chattanooga's Electric Power Board, with 163,000 customers, said it has issued 73,533 disconnection orders this year, up about 2 percent. The average delinquent bill has grown 17 percent - from $152.35 per customer to $178.94.
The Knoxville Utilities Board, which has 183,000 electric customers, said past-due bills are up about 10 percent compared with 2007.
TVA spokesman Gil Francis acknowledged that rising fuel costs driving rate increases and adding pressure to consumers are "a national issue across the board."
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2 comments:
Does anyone know of an agency that we can talk to in order to fight this increase? It seems that a large number of tennesseans are impacted and with fuel costs actually down over the last few months, this seems like downright robbery.
Joshua, thanks for weighing in. TVA can be e-mailed at tvainfo@tva.com and their main phone number is 865-632-2101. While MLGW must pass on these rate increases, we were the only utility to speak out against the base rate increase (see the link below):
http://www.mlgw.com/SubView.php?key=about_newsreleases&chunkid=245
Power costs make up 80 percent of MLGW's budget. However, we're focusing on what we can control. The 2009 MLGW budget includes no MLGW rate increases (the 20 percent that doesn't go toward purchased power and natural gas) and we're promoting energy conservation like never before. Thanks again for your comments. Rising energy costs affect us all and we are equally concerned.
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