Volume 54, Number 3

ten pages

Byrdstown, Tennessee 38549 -- Thursday, January 19, 2017

VEC to pass along TVA increase

Like other power distributors in the Tennessee Valley, the Volunteer Energy Cooperative Board of Directors has voted to pass along recently-announced TVA rate and fuel cost adjustment increases to its 109,000 customers, beginning October 1st.
VEC President/CEO Rody Blevins said that VEC’s margins are small and the cooperative is not able to absorb these TVA increases. Therefore, he said, the VEC Board had no other alternative other than to pass along the increases to customers. “We had requested, since the fuel cost adjustment was scheduled to jump dramatically, that TVA not increase the base rate at this time,” he said. “Unfortunately, the TVA Board voted to increase the base rate as well.”
The residential rate per kilowatt hour (kWh) for VEC customers will rise from 7.777 cents to 8.001 cents, an increase of 2.9%. The fuel cost adjustment, which is a surcharge charged per kilowatt hour, will increase from .744 cents to 1.958 cents. The revenue from the surcharge is passed along to TVA to cover the increasing cost of fuel used to generate power. It is adjusted quarterly.
The VEC increases reflect only the TVA hikes; there is no increase in VEC’s portion of the rate structure.
Blevins said that this is the largest increase in power costs by TVA since the 1970’s and will have a noticeable effect on the price that VEC customers pay for power. “We are extremely concerned about the impact on customer bills and are actively participating in the development of programs to promote and encourage energy efficiency,” he said.
The exact impact of the increases on a residential customer’s monthly bill will depend on that customer’s energy usage. The charts below reflect the total impact of the changes for three types of VEC residential users.

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