Maya Smith
TVA CEO Bill Johnson (right) met resistance to the new rate change when he visited Memphis earlier this year.
A group of Tennessee small business owners called the Tennessee Valley Authority’s (TVA) proposed rate change “a bad economic development strategy” Tuesday ahead of a vote on the matter this week.
TVA board members will vote Thursday to change the way the agency charges for electricity. The proposal would add a 12-percent, fixed cost for electricity to utility companies, like Memphis, Light, Gas & Water and reduce electric rates by 12 percent, according to TVA.
TVA said new energy-efficient technologies (like LED bulbs) have lowered the demand for electricity throughout the Tennessee Valley. However, costs to maintain TVA’s massive power grid have stayed the same. The fixed cost will pay for the grid and won’t make the agency any extra money. 
But an open letter to the TVA board issued Tuesday by the Tennessee Small Business Alliance (TSBA) said the change will mean higher monthly bills for small businesses. The average residential customer could pay up to $29.24 each month for electricity, the group said, “before they even flip a switch.”
“This charge, which comes from what is called a mandatory or fixed fee, means that we are paying for energy consumption before we even open our doors for business every day,” reads the letter. “These mandatory fees limit small business owners opportunities for controlling their bills through energy efficiency and self-generation investments.”
TVA said the change is like fixed-cost charges for other consumer services like cell phones, gym memberships, or streaming video plans, “where you pay a base fee that covers 24/7 access to reliable service”
”The benefit of the rate change is that it will reduce the variability of bills during high demand periods in the winter and summer, helping households balance bills over the year,” reads a TVA blog about the change. “And this is by design. Everything we do at TVA is focused on those we serve: low electric rates; a healthy environment; and reliable, clean energy that provides good-paying jobs.“
Maya Smith
TVA CEO Bill Johnson’s visit here this year drew protestors to Memphis City Hall.
Visit here tor more information from TVA about the rate change.
Members of the small business group added that TVA has been favoring large, industrial customers. Over the last five years, the group said, TVA has shifted $1.4 billion in costs from industrial customers to residential customers.
[pullquote-2] “TVA is blind to the fact that small business is the economic backbone [of Tennessee],” said Lenda Sherrell of the TSBA. “Instead, they’ve been offering preferential treatment to large customers and passing that cost down to small businesses. All we’re asking for is fair treatment and a level playing field.”
Sherrell said more than 300 small business owners across Tennessee (including Memphis) have signed onto the letter. The letter has not yet been sent to TVA, she said, as her group awaits more signatures. TSBA will deliver the letter to the board during its meeting Thursday.
