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February 26, 2008


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NEWS

TVA to Raise Electrical Rates

By Ernie Smothers
smothers@mckenziebanner.com

HUNTINGDON (February 22) The TVA Board of Directors approved a seven-percent increase in the cost of electricity to its local power distributors during a February meeting. The rate increase is effective April 1 to help fund new power generation and energy efficiency initiatives needed to meet the growing power demand of the Tennessee Valley.

The rate adjustment will provide an estimated $300 million in additional revenue during fiscal year 2008. While amounts vary across the Valley, residential customers may expect an increase of about $4 to $7 monthly on retail electric bills, according to TVA.

During a telephone interview with the McKenzie Banner, Carroll County Electric Company Manager Lynn Compton stated that electrical rates would increase by at least ten percent effective April first.

Compton said, “Nothing is settled at the moment. We received the spreadsheets yesterday and are just beginning to process the information, but I would roughly calculate that residential rates will rise from $70.50 per-one thousand kilowatts used to around $78.88-somewhere in the neighborhood of about an eight dollar per-one thousand watt kilowatt rate increase.”

He added, “The final analysis must be completed and finalized and turned in to TVA for review by Friday, February 29. Until then, we will break down and assess all the information we have received in order to best determine the rate of increase both residentially and commercially. This process is very complicated and time-consuming, but we will have our findings ready for TVA to view by next Friday.”

He concluded, “Once TVA reviews our information, the exact amount of rate increase will be revealed. One thing I feel certain about is that the rate will increase by at least ten percent.”

TVA met three all-time winter records for electricity consumption in the Valley since January 1. Last summer, TVA met 13 all-time summer records for power demand during record-breaking August heat wave. When power demand is at its peak, TVA often pays four to five times normal costs for additional power form other energy suppliers.

TVA President and CEO Tom Gilgore said the lingering effects of the drought and its continued impact on reduced hydro generation has contributed to the need for increases in power costs.

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February 26, 2008