By Clarisse Hayle – TN Energy Savings Outreach and Communications Assistant 2018
Noticed something different about your electric bills? Across the state of Tennessee, electric bills are getting more expensive, and it’s not necessarily because people are using more energy. It’s because of the increases of fixed fees.
Fixed fees are a preset charge that customers must pay to a utility. These fees are applied before any energy is used, in addition to the amount customers pay per kilowatt hour. Sometimes customers can see a fixed fee on their bill, but oftentimes this charge is not easily seen.
Fixed fees for ratepayers in the Tennessee Valley Authority service area are likely to increase every year, in accordance with the Grid Access Charge (GAC) set by TVA in 2018. Because of this new policy, increases in TVA’s fixed fees are not required to go through a public input process, which means energy costs could continuously rise with no oversight from the people paying the bills.
At the Knoxville Utility Board (KUB), fixed fees have been steadily increasing for the last several years. The fixed fees pose serious issues to the implementation of renewable energies like solar power. While KUB does provide an option for customers to use solar, the company’s fees means there is not much money to be saved.
Over the next ten years, KUB has proposed to raise its fixed fees annually between $1 and $1.50 per month. The fee has already risen by $1.50 every year for the last two years. Currently, KUB customers are paying a fixed charge of $19, before using any energy. By the end of the 10-year plan, the projected fixed charge could be as high as $30 per month. This is a 300% increase from the overall cost of KUB utility bills in 2010.
These price hikes are a response to the falling profit electric utilities make from energy bills. Since people have become more energy efficient and are using less, electricity providers are looking for other ways to keep making money.
Fixed fees also threaten energy efficiency. As technology improves, people are able to buy appliances that use much less energy than before. There are also more simple changes people can make, like switching to LED lightbulbs and adjusting the thermostat. With the introduction of fixed fees, those energy savings won’t do much for customers’ energy bills. This means that more people will become discouraged from making changes to how they use energy, especially if they are low-income.
Customers have called out the KUB on its actions. In Knoxville, the Southern Alliance for Clean Energy has led the charge to inform KUB customers about rising fixed fees and encouraged them to reach out to KUB leadership. (Find out more here.)
KUB customers are also encouraged to come to the next board meeting on February 21 and voice their concerns. Board meetings are held at noon at 445 S. Gay Street, Knoxville TN 37902.