For the first time in its 85-year history, the Tennessee Valley Authority is proposing to add a grid access fee to what it charges the local power companies that distribute its power in a controversial rate realignment scheduled to gain TVA board approval today.
Doug Peters, president and CEO of Tennessee Valley Public Power Association, poses for a photo at the TVPPA headquarters in Chattanooga, Tenn., Wednesday, Aug. 30, 2017. Peters, who is a native of Rossville, Ga., recently took on his new role following the retirement of Jack Simmons. 
Tennessee Valley Authority president and CEO Bill Johnson speaks during an editorial board meeting Thursday, Feb. 8, 2018, at the Chattanooga Times Free Press. In response to concerns from its distributors, TVA cut in half its original grid access charge and agreed to consider allowing local power companies some new flexibility in generating their own renewable power, especially to keep or recruit the growing number of businesses wanting to buy clean and green energy.
TVA plans to add a half-cent-per-kilowatt-hour access charge for its sales to local power companies like EPB, effective Oct. 1. If approved by TVA directors today, the federal utility will offset the grid access fee with a comparable drop in the variable energy charge for electricity so that most customers would see little, if any, difference in their power bills over the course on an entire year.
The half-cent per kilowatt-hour grid access fee is expected to generate about $600 million for TVA. Originally, TVA had proposed a penny per kilowatt-hour grid access fee and had studied as much as a 2.5 cents per kilowatt-hour fee, which could have generated as much as $3 billion a year for TVA in more fixed costs, offset by lower prices for the amount of energy consumed.
“This is major structural change in our wholesale rates that we will probably live with for some time so a slower approach is certainly what we thought was in our best interest,” said Doug Peters, president of the Tennessee Valley Public Power Association, which represents the 154 municipalities and power coops that sell TVA power. “Let’s see how this works and make sure there are not any unintended consequences before we consider ramping this up (with higher grid access fees).”