TVA rate increase passes

By Abby Morris
Star Staff
amorris@starhq.com

   Members of the Tennessee Valley Authority Board of Directors passed a rate increase and restructure at a meeting Wednesday morning, forcing the hand of many utility districts to do the same.
   According to information from TVA, the members of the board voted to approve the rate actions to fund clean air improvements for the next 10 years and to help retain manufacturing jobs in the Tennessee Valley.
   A 6.1-percent increase in electric revenues was approved along with a change in the rate structure to more evenly distribute TVA's costs to serve various customer groups and to make manufacturing rates more competitive, according to a released statement from TVA.
   The rate increase and restructuring will have the net result of an average 7.4 percent increase in wholesale residential and non-manufacturing rates and a 2 percent decrease in wholesale rates for large manufacturers, according to a TVA statement.
   According to Elizabethton Electric System General Manager Phil Isaacs, four industries serviced by EES will qualify for the decreased rate passed by TVA.
   The board also adopted a budget for the 2004 fiscal year that allocates $418 million for clean air capital investment, $251 million for transmission system improvements, and $225 million for debt reduction.
   "We are installing the latest clean air technology at our coal-fired plants because it is the right thing to do," said TVA Chairman Glenn McCullough Jr. in a released statement. "This 10-year environmental adjustment in our rates will help pay the $1 million a day we are investing to do our part in providing clean air and clear skies to the people of the Valley in the 21st century."
   The rate increase and restructure will generate about $365 million in additional revenue for TVA during the 2004 fiscal year, which begins Oct. 1, the date that the new rates will take affect.
   In response to the rate increase, members of the Elizabethton Electric System Board approved an energy charge increase as well as an increase in the customer service charge at its meeting on Tuesday in the event that the TVA rate increase went through.
   Customers of EES will see an increase in their energy bills beginning on Oct. 1 when the energy charge will increase by 6.74 percent and the customer service charge will increase by $1.
   According to Isaacs, the average customer who uses approximately 1,000 kilowatt hours a month will see their electric bill increase approximately $4.40.
   While TVA has stated that part of the restructuring to the rate system was an effort to help draw manufacturers to the Tennessee Valley as well as maintain the industries currently located there, some organizations which represent small businesses have stated their opposition to the decision.
   The National Federation of Independent Business has come out in disapproval of the rate restructuring. "What we've seen here today (Wednesday) is a setback for literally tens of thousands of small businesses within the TVA region," a released statement by the NFIB states. "The inherent unfairness in raising rates for these hard-working men and women, while at the same time giving big manufacturers a big break, flies in the face of an equal playing field."
   Locally, an organization representing small business petitioned lawmakers to discourage the rate increase by TVA.
   Members of the Elizabethton/Carter County Association of Business and Industry sent a letter to the three-member TVA board, Gov. Phil Bredesen and 30 U.S. senators and representatives voicing their opposition, according to Monica Feathers, secretary for the organization.