Four months after the Tennessee Valley Authority adopted a budget plan to help reverse rising electricity prices, the head of America’s biggest government utility says he is even more confident that electricity prices will remain stable over the next decade.
Despite a new study suggesting TVA may have to raise its rates by as much as 36% over the next 15 years because of higher costs for coal ash, fuel and other expenses, TVA President Jeff Lyash said he believes the most likely scenario is for TVA to avoid electricity rate increases through 2028.
While Georgia Power Co. and other utilities are raising electric rates this year, TVA directors voted in August to keep base rates unchanged and offered a 3.1% rebate to local power companies that sign long-term contracts with TVA. Among the 154 local power companies that buy TVA power, 134 have signed the 20-year agreements and are now getting cheaper power from TVA than they did a year ago.
“You build confidence over time by taking the right sets of action,” Lyash said during a leadership meeting with his top executives this week in Chattanooga. “The capital investments we’ve made over the past six years have lowered our fuel costs and positioned us well for the future.”
TVA’s delivered cost of power, combining TVA’s fixed rates and fuel costs, is 1% lower today than in 2013, TVA Chief Financial Officer John Thomas said. By comparison, the retail electric rates of the 17 peer utilities of TVA in the Southeast rose an average of 10% in the same period.