In a year of rising electric rates, the Tennessee Valley Authority also boosted the annual compensation for its chief executive to more than $2 million for the first time, TVA reported in a yearend report Tuesday.

But utility officials said TVA President Tom Kilgore is still paid less than half the industry average of nearly $6 million a year for comparable executives.

TVA also reported that two of its top executives who were paid special relocation and performance bonuses a year ago took home less money in fiscal 2008.

Despite congressional criticism of TVA’s raising executive pay while electric rates are increasing, TVA reported to the Office of Management and Budget Tuesday that the compensation for Mr. Kilgore rose by 11.6 percent in the fiscal year ended Sept. 30.

TVA paid Mr. Kilgore nearly $1.1 million in incentive awards on top of his $655,000 salary and $300,000 deferred compensation.

Mr. Kilgore is eliglble to earn an extra $1 million more in fiscal 2009 if he meets all of TVA’s performance standards under a pay plan adopted by the TVA board in October.

Mr. Kilgore is among the highest-paid federal employees in the United States and his pay was recently labeled by U.S. Rep. John Duncan, R-Knoxville, as “excessive and very unnecessary.” U.S. Rep. Zach Wamp, R-Chattanooga, said granting Mr. Kilgore a pay hike while electric rates are up and local employment is down “defies common sense.”

But TVA spokesman John Moulton said the utility’s compensation is desgned to recruit and keep the best talent to make TVA successful.

“Our compensation is conservative, market-based and performance driven,” Mr. Moulton said.

During fiscal 2008, TVA said it nearly doubled its net income, earning $817 million on revenues of nearly $10.4 billion. In the previous year, TVA had net income of $423 million on revenues of just over $9.3 billion.

Most of the revenue gain in the past year came from fuel-cost adjustments and base rate increases over the past year.

Mr. Kilgore said TVA was hurt in the past year by the lingering drought, which cut hydroelectric power generation nearly in half, and rising coal and commodity prices, which more than doubled the cost of purchased power.

In the past year, TVA cut its staff to one of the lowest levels ever while electricity production increased to the highest level ever.

“Our productivity measured in power delivered per employee was about 15.5 gigawatt-hours per employee during 2008, compared to about 11 gigawatt-hours per employee 10 years ago,” Mr. Kilgore said in a prepared statement. “This ratio demonstrates our ability to provide more electricity to our customers with fewer employees.”