RAINSVILLE, Ala. - The savings most TVA customers enjoyed paying their power bills in the past year will come at a cost for state and local governments across the Tennessee Valley in the next year.
TVA's tax equivalent payments in the seven-state TVA region will drop by $43 million over the next 12 months, TVA disclosed Thursday.
A mild winter and an even milder economic recovery cut TVA revenues by more than 5 percent during the fiscal year ended Sept. 30. TVA, which pays 5 percent of its revenues in tax equivalent payments where it operates or sells power, will cut such tax payments in the next year by a like amount.
During a board meeting Thursday in Rainsville, TVA directors approved final payments of more than $579 million for fiscal 2012 to state and local governments. TVA's tax equivalent payments include more than $350 million to Tennessee, including more than $3 million to local governments in Hamilton County.
TVA is one of the largest taxpayers in Tennessee and, combined with its EPB distributor in Chattanooga, the public power utilities pay as much in tax equivalent payments as any private business in Chattanooga.
In the next year, TVA will pay $536 million to state and local governments.
"That reduced estimate is attributed to a slow economy and less TVA power sales revenues due to milder, warmer weather last winter resulting in less electricity for heating," TVA spokesman Mike Bradley said.
As a government-owned utility, TVA does not pay property or sales taxes. The tax equivalent payments are designed to make up for that loss. Each state determines how its share of TVA tax payments are distributed.