KNOXVILLE – The average Chattanooga household will pay nearly $2 more a month for electricity, starting in October, to help fund a $10.4 billion budget plan for the Tennessee Valley Authority in fiscal 2017.
TVA directors voted Thursday to raise power rates by 1.5 percent in the fiscal year that starts Oct. 1 to help generate another $192 million to help absorb the costs of bringing the newest nuclear reactor into the rate base.
At the same time, TVA will cut another $104 million in operating expenses next year, primarily through more voluntary reductions in its 10,792-employee staff, which is already at the lowest level for TVA since 1934, just a year after the agency was established as part of Franklin Roosevelt’s New Deal.
The rate increase for next year matches the rate hikes adopted by TVA in each of the past two years. TVA President Bill Johnson said such increases are less than the inflation rate and will still leave TVA rates below the U.S. average and relatively better than where the agency stood against other utilities in the past.
“In the last few years, we’ve gotten more competitive with these incremental rate increases while we continue to bend debt and spending down,” Johnson said. “Our market is changing, and we and our customers are working to adapt to new business conditions that include reduced energy needs and increased demand for energy efficiencies and renewables.”