Friday, August 21, 2009

TVA Rate Increase Fast Facts

On Thursday, August 20, The Tennessee Valley Authority Board approved its 2010 budget of $10.2 billion for operating expenses and $2.3 billion in capital investments.

TVA is taking action to deal with a projected $7.2 billion shortfall for the period 2010 through 2012 including $1.9 billion in cost reductions, $2.8 billion in additional borrowing, and a base rate increase of 8% worth $2.5 billion.

TVA’s Board approved the 8 percent increase in the average wholesale rate. The increase will raise the typical MLGW customer’s bill by approximately $6 per month. This increase will be offset initially by an 11 percent decrease from the Fuel Cost Adjustment for the October billing period. According to TVA, residential consumers can expect decreases in the wholesale portion of their bills that range from about 50 cents to about $4 in October.

The Fuel Cost Adjustment, or FCA, is a variable energy rate that can fluctuate each quarter with TVA’s fuel and purchased power costs.

MLGW is TVA’s largest electric customer. MLGW passes on all TVA electric costs to customers.

The Commercial Appeal article on TVA can be viewed here.

The TVA press release can be viewed here.

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