Tuesday, January 23, 2018

TVA President Visits City Council, Talks New Fixed Fee

Posted By on Tue, Jan 23, 2018 at 4:47 PM

click to enlarge Bill Johnson speaks to the media about TVA's proposed rate changes.
  • Bill Johnson speaks to the media about TVA's proposed rate changes.


Tennessee Valley Authority (TVA) president Bill Johnson said the power supplier wants to add a fixed fee on its customers’ bills.


The added fee, Johnson said, would pay for various TVA recovery costs. But, Johnson said TVA’s new fee does not directly correlate to an increase for Memphis Light, Gas & Water customers.


“If they [MLGW] don’t want to mirror these rate changes then they don’t have to,” he said. “It would only directly affect the 154 customers that TVA sells power to.”


The proposal has been described as “nefarious,” Johnson said, “ but it’s far from it.”


If TVA increases its fees and others follow, Johnson believes that high-energy-burdened customers would pay lower bills because TVA would be reducing energy costs.


“If you’re a high energy user and you live in an energy inefficient house, you’re going to save money in this rate design,” he said.


Scott Banbury of the Sierra Club said if fees are based on usage and usage rates are high, people would have more incentive to invest in making energy-efficiency changes to their homes and routines.


“Turn our lights out at night, keep the thermostat low,” he said. “We prefer to see people’s rates based on what they’re using as opposed to a fixed, mandatory fee.”


The fees, Banbury said, are about “debt service” and paying for TVA “clean up.”


Johnson said if the new fee is approved by the TVA board, it would not take effect until October 2019.


Scott Brooks, a TVA spokesman, noted that the proposal is not a 12 percent rate increase.

"That figure represents the amount of our fixed costs that could be recovered by moving that amount from the energy charge side of the bill (the rate you pay per kilowatt hour of usage) to a new fixed charge," Brooks said. "That amount is not additional to the bill.

It will not increase your bill. It simply would move revenue from one part of the bill to the other. A pricing change is not a rate increase."

An earlier version of this story said "12 percent rate increase." It should have said "a fixed fee."



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