Shifting power at TVA
In the past five years, TVA has cut its annual fuel bill from about $4 billion to $3 billion by:* Shutting down 4,500 megawatts of coal-fired generation* Adding 3,000 megawatts of natural gas generation* Adding 1,200 megawatts of nuclear powerSource: TVA
Power rates are going up in the Tennessee Valley on Sunday, but cheaper fuel costs are offsetting the base rate increase by the Tennessee Valley Authority for fiscal 2017, cutting the effective price of electricity in Chattanooga by 4.4 percent next month compared with a year ago.
TVA is raising its wholesale base rates by 1.5 percent, effective Sunday, to help generate another $195 million for the federal utility in the next year. But the fuel cost portion of electric bills continues to drop and will offset the higher base rates to keep power rates at the lowest September level since 2012.
“We’ve been adjusting our base rates each year to pay for our capital plan and debt reduction, but we have more than offset those increases with the reductions we’ve achieved in our fuel expenses,” TVA Chief Financial Officer John Thomas said Thursday. “As a result, our wholesale costs have declined in the past five years by about 2 percent (from an average 6.9 cents per kilowatt-hour down to 6.7 cents per kilowatt-hour) even while we have invested $16 billion in capital improvements and paid down on our long-term financial obligations by a billion dollars. I think it’s been outstanding what we’ve been able to achieve in making our rates more competitive.”
Adjusted for inflation, TVA rates are nearly 9 percent cheaper than they were prior to 2013 when Bill Johnson was named TVA’s CEO and developed a 10-year plan to control TVA costs and rates while improving the utility’s balance sheet.