Mike Duncan got some early advice about running the Tennessee Valley Authority when he was elected TVA chairman last year.
“I was told to keep lake levels up and electric rates down,” Mr. Duncan said Thursday.
That may be easier said than done, but abundant rain and snow in the Tennessee Valley over the past year have helped his record so far.
With rain-swollen reservoirs, TVA’s 29 hydroelectric dams are generating nearly three times as much power as normal in the current fiscal year, giving the utility nearly four times as much electricity from its cheapest power source.
As a result of the rain and cheaper fuel prices, TVA has cut its rates eight times since Mr. Duncan was elected TVA chairman nearly a year ago.
During a TVA board meeting in Bristol, Va., TVA President Tom Kilgore said rainfall is running 34 percent above average, creating a surplus of water in the region.
“The hydro facilities are fully ‘fueled’ right now and, in fact, we’re spilling a lot of water right now,” he told the TVA board. “We don’t like to do that, but we also have to maintain our mission of flood control.”
Mr. Kilgore said the extra hydro generation is helping TVA maintain residential rates 15 percent below the average of Southeast and Midwest utilities. Among 23 neighboring electric utilities, TVA had the seventh-lowest price for residential power at the end of 2009.
PDF: TVA board presentation CHANCE OF SNOWToday holds a 30 percent chance of rain or snow with highs in the upper 30s and lows in the 20s. A low-pressure system coming through the South is bringing in the precipitation, and even a slight change in its path could mean some snow accumulation for the Chattanooga area.Source: Meteorologist Lyle Wilson, National Weather Service, Morristown, Tenn.
TVA rates will go up in March and could edge higher through 2010 because of higher fuel prices pushed up by colder weather and a stronger economy, Mr. Kilgore said.
In setting the “Winning Performance” goals for the year, TVA directors on Thursday said that delivering cheap, reliable power is most important for the utility.
Electric rates account for half of the employee bonuses TVA workers may earn this year, and electric reliability accounts for another 30 percent. The rest of any bonus is based upon how the agency is rated by its employees, customers and other stakeholders.