TVA rates 13 percent above average for power coops

photo TVA's Bill Johnson
Arkansas-St. John's Live Blog

TVA electric rates for power cooperatives have risen above the national average for all such coops and need to be brought more in line with other utilities, the head of the Duck River Electric Membership Corp. said today.

Michael Watson, president of the Duck River power coop in Middle Tennessee, told the TVA board today that Duck River coop electric rates are 7.7 cents per kilowatthour, or 13 percent higher than the average of all U.S. power coops.

"That puts TVA in the upper quartile of rates for power coops in the country," he said.

Watson said a disproportionate share of power users in Tennessee live below the poverty level.

"Higher energy costs hurt them the most," he said.

Watson said TVA President Bill Johnson "is on the direct track" to cut TVA annual operating and maintenance expenses by $500 million by 2015.

But Watson said he is worried that TVA may be closing too many coal-fired power plants to met future power demands. Watson said he worries that TVA's decision to shutter 18 of its oldest coal-fired units could prove costly for TVA, both in pushing up costs and in hurting TVA reliability.

Watson noted that winter temperatures in October 1985 pushed the temperature in Nashville to 17 degrees below zero.

"With all of the pending plant closings, will TVA be able to meet that demand in the future?" he asked.

But during a public listening session with TVA in Memphis, environmental leaders praised TVA for shuttering old coal plants and urged TVA to do even more.

Jonathan Levenshus, the Tennessee campaign chairman of the Sierra Club's "Beyond Coal Campaign," said TVA is meeting its power demands with overall rates below the U.S. average by replacing coal with more renewable sources of power generation and through conservation and efficiency. Levenshus claims that coal could be completely phased out of TVA's power mix. Already with future planned coal plant closings, TVA will have cut its carbon emissions by 40 percent by 2020.

"TVA is leading in this effort," said Stephen Smith, executive director of the Southern Alliance for Clean Energy. "TVA has proven that it can be done."