Environmental groups blasted a rate increase for electricity from the Tennessee Valley Authority, (TVA) Thursday.
The TVA board approved a 5.25 percent rate hike during its meeting Thursday in Florence, Alabama. The move is expected to raise nearly $500 million for TVA. The agency said the average residential bill in its coverage area last year was about $138. The new increase will translate to about an additional $4.35 each month.
“We recognize that people don’t pay rates, they pay bills, and that matters,” said Jeff Lyash, president and chief executive officer of TVA. “We know this is a kitchen table issue for many families across our region. At TVA, we don’t like price increases any more than you do, and that’s why we continually work to reduce expenses by hundreds of millions of dollars each year.
“We have done everything possible to absorb costs as we invest in the reliability of our existing plants, construct new generation to keep up with growth and maximize solar to produce more carbon-free energy,” Lyash added.
The increase came almost exactly one year after the TVA board approved a 4.5 percent rate increase. That increase was expected to add $3.50 to customers’ monthly bills and was needed to improve efficiency and add 30 percent of new power load to the grid, TVA said at the time.
However, the total 9.75 percent rate increase figure was by design, environmental groups said Thursday. If the agency raised rates by 10 percent in a five-year span, that would have triggered re-negotiations with local power suppliers, like Memphis Light, Gas & Water (MLGW).
Knoxville-based Southern Alliance for Clean Energy (SACE) officials said they were frustrated by the lack of public information and input on the rate increase.
”Only in an Orwellian world of misinformation do we see our nation’s largest ’public’ power utility pass a massive rate increase while providing the public the least amount of information compared to ‘private’ utilities,” said SACE executive director Stephen Smith. “It’s highly unusual for a utility the size of TVA to issue a rate increase with zero independent review. This is a broken process, and every ratepayer in the Tennessee Valley is literally paying the price.”
SACE said it could “only guess” at what is driving “TVA’s current financial woes.” And it had a guess: “the largest buildout of fossil gas in the country in a decade,” pointing to new projects for fossil gas pipelines and power plants.
This also drew the ire of Gaby Sarri-Tobar, energy justice campaigner at the Arizona-based Center for Biological Diversity.
“It’s outrageous that TVA is raising rates again to pay for more dirty fossil-fuel plants and pipelines,” Sarri-Tobar said in a statement. “The country’s largest public utility is planning to build more methane gas capacity this decade than any other utility, defying its duty to be a clean-energy role model.
“By approving this rate hike, the TVA board is responsible for making life-saving power more unaffordable for millions of people, as our climate spins out of control.”
A 4 percent electric rate increase from MLGW began in January. It was the first of three annual increases to “fund continuing infrastructure improvements which will enhance the reliability and resiliency of the local electric grid.” Customers can expect their bills to — at least — increase each year for 2025 and 2026. It was not immediately clear how TVA’s new rate hike would impact MLGW’s scheduled increases.
