TVA board approves 1.5 percent electricity rate increase, $10B budget

The Tennessee Valley Authority Board of Directors on Wednesday approved a $10.37 billion budget for its 2018 fiscal year that includes a 1.5 percent rate increase for electricity customers, reports the News Sentinel.

“Our budget has gone down for about five years and it will keep us on the financial track to pay down our debt to below $20 billion by 2023,” said TVA President and CEO Bill Johnson. “We are keeping O and M (operation and maintenance) and fuel flat which is a pretty good management exercise in itself.”

… The rate increase amounts to about $1.50 more a month for the average customers using 1,000 kilowatt-hours per month. The increase will take effect with the 2018 budget year that begins Oct. 1, 2017.

“This modest rate increase recognizes the need for TVA to continue to build on the financial and operational performance improvements we have made over the past three years, while still providing an effective retail rate below 2013 levels that remain among the lowest in the region,” Johnson said. “It will allow us to more effectively deal with a rapidly changing industry while lowering debt levels that directly affect our ability to continue to provide energy at the lowest feasible cost.”

The rate hike matches those of the previous two years.

…The other big news from the meeting was approval of a measure to add a one-time $500 million contribution to the TVA Retirement System, this in addition the yearly contribution of $300 million.

“A major focus on TVA’s financial health has been to attend to long-term liabilities, especially related to debt and pension,” Johnson said. “The board has taken steps today to reduce both of those through the modest base rate increase and the pension contribution. Both reduce risk and provide future flexibility, which become more important as the utility industry faces significant change and uncertainty.”

Note: See also the Times Free Press report, which begins thusly: With staffing already at its lowest level ever, the Tennessee Valley Authority expects to continue trimming workers and consolidating its headquarters here into a single office as the demand for its power stagnates.