TVA Proposes Fixed Cost Increases

The Tennessee Valley Authority has proposed a revised rate structure that would [decrease the rate per kilowatt hour of power] and increase fixed costs to consumers. TVA claims the changes would be revenue neutral, but critics such as the Southern Alliance for Clean Energy argue the new model would reduce residential solar installations and burden low-income customers.

TVA is a federally owned utility that sells energy to 154 local power companies across most of Tennessee as well as parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia. Those local power companies would determine how to pass along changes in TVA’s wholesale rate structure to their customers.

Volunteer Electric Cooperative, which serves all or part of seventeen counties in East Tennessee, has spoken out against the change. In a Facebook post, the co-op wrote that “The rate change may be revenue neutral for TVA, but it will not be revenue neutral for VEC or for the members we serve.”

In a report released by the utility in March, TVA stated that its “current energy prices over-incentivize consumer installation of [distributed energy resources],” which include residential solar panels. The proposed rate change would reduce the economic incentive for home solar.

While Cass Larson, a vice president of TVA, denied in a statement that the move was intended to discourage investments in renewable energy, environmental advocates argue that the utility isn’t doing enough to promote solar.

“These utilities operate in a public policy vacuum and the slow pace of solar reflects outdated thinking within the utility’s management,” the Southern Alliance for Clean Energy’s Bryan Jacob told the Times Free Press.

Opponents of TVA’s proposal — including SACE and Appalachian Voices, the publisher of this newspaper — argue that the rate structure would discourage investments in energy efficiency by removing customers’ ability to save money by saving electricity and would disproportionately impact low- and fixed-income households by increasing fixed costs.

The public comment period is open until April 9 and a decision is expected at the May 10 board meeting.