TVA's Bellefonte nuclear plant can be seen from Highway 72.

Electricity rates are edging higher in the Tennessee Valley, but TVA said its power costs are still in the bottom third of all U.S. utilities.

TVA directors are expected today to approve a budget plan for the fiscal year beginning Oct. 1 that will raise TVA base electric rates similar to the 1.5 percent annual increase adopted in each of the previous two years. The increase is slightly below the general inflation rate and will keep TVA competitive with most other electricity providers in the Southeast, according to TVA officials.

"The Tennessee Valley Authority has some of the lowest electric rates in the country," TVA Chief Financial Officer John Thomas said in a recent report titled "How TVA Helps Keep Your Power Bill Low." "Sixty-nine percent of customers of the top 100 utilities in the United States pay more for electricity than we do."

TVA's average delivered cost of power by the 154 power cooperatives and municipalities in its seven-state region is now about 9 cents per kilowatthour, which is about 7 percent less than the median price of 9.7 cents per kwh among the top 100 electric utilities in the country.

For the typical Chattanooga household, the base rate increase will boost the monthly light bill by about $2, starting in October.

The Department of Energy said 9 cents worth of electricity allows you to watch about six hours of TV or play a computer game for around 12 hours.

TVA said its industrial rates now average 5.54 cents per kwh, which ranks TVA 15th among the top 100 utilities and places TVA's rates at 17.3 percent below the median of all utilities.

TVA President Bill Johnson has set a goal of raising TVA base rates at or below the inflation rate each year. The utility has cut more than 2,000 jobs and $600 million in operating and maintenance expenses over the past three years.

The TVA board is meeting today in Knoxville to set rates for fiscal 2017 and to adopt a budget plan for next year. With the completion of its newest nuclear unit at Watts Bar and the installation of scrubbers at several of its coal plants finished, TVA will not spend as much on its capital improvements next year but will have to bring the $4.7 billion expense of Watts Bar Unit 2 into its rate base to pay off over its projected 40-year life.

TVA also adjusts its rates each month to reflect the varying costs of fuel. Next month, TVA's September fuel cost adjustment will be about 5 percent higher than the average of the past three years. TVA spokesman Scott Brooks said the higher fuel expense next month is due, in part, to a falloff in its cheapest power source — the hydroelectric power produced by falling water through TVA's 29 power-generating dams.

So far in 2016, rainfall in the Tennessee Valley above Chattanooga has been only 88 percent of normal, cutting runoff from the rain by nearly 20 percent below average. TVA gets about 10 percent of its power from its hydroelectric dams.

For the typical residential electricity user in Chattanooga that consumes 1,461 kwh per month, EPB will charge $157.15 in September, or 2 cents less than in the current month. But EPB rates next month will be 3.7 percent, or $5.64, above the same time a year ago due to changes in both base rates and fuel cost adjustments over the past 12 months.

Contact Dave Flessner at dflessner@timesfree or at 423-757-6340.