While TVA expands its generation and transmission system to meet higher power demands, the utility also plans to cut its operating expenses by $950 million over the next three years.
A decade after TVA last streamlined its organization and cut some of its workforce, the utility is again looking for ways to trim more than 5% of its operating and maintenance costs to achieve ongoing annual savings in TVA’s budget of $500 million by the end of fiscal 2026.
TVA President Jeff Lyash said the utility wants to trim costs in its supply chain and power operations and use new technologies to improve power output with its existing staff and plants. On Thursday, TVA will roll out to its staff a new business plan outlining a half dozen of what Lyash said will be “transformational initiatives” to help improve TVA efficiency and operations.
The cost-cutting effort comes as TVA prepares to raise its wholesale electricity prices Oct. 1 by 5.25% — the biggest such increase by TVA in 16 years. Last fall, TVA also raised rates by 4.5%.
“We are sensitive to customer pricing,” Lyash told the TVA directors last week during a quarterly board meeting in Florence, Alabama. “We want to make sure that if we are asking out customers to pay anything more on their bill that we can look them in the eye and tell them that we are making sure that every dollar is wisely spent.”