TVA rates to jump 6.4%

Sep 16 - McClatchy-Tribune Regional News - The Knoxville News-Sentinel, Tenn.

Power bills for TVA residential customers will increase for billing periods startingas the utility passes along the eighth straight monthly fuel cost adjustment.

Depending on how much electricity a customer uses, monthly residential bills will rise $4 to $8.50 compared with September bills, according to the Tennessee Valley Authority website, where the rate increase notice was posted.

TVA said wholesale power rates will rise 6.4 percent next month, the largest monthly fuel cost adjustment since August 2007. The TVA increases typically are passed along by the Knoxville Utilities Board and other local utilities to their customers.

The increase is because of "excessively high temperatures" in August that limited TVA's power generation capabilities and increased power demand projections by 8 percent.

"It was an exceptionally hot summer, which prompted much higher demand for electricity. That forces TVA and all utilities to call their higher-priced, peaking power plants into service and also to buy power from other utilities to cover the need," said David Mould, TVA senior vice president for communications.

Over the past two months TVA also has been forced to curtail power production at the Browns Ferry Nuclear Plant in northern Alabama, the Cumberland Fossil Plant in Middle Tennessee and other plants, in accordance with environmental regulations, because the river water was too warm. TVA discharges water from some of its plants into rivers. But when the river water already is warm from hot temperatures, any additional warm water can adversely affect the river and aquatic life.

The public utility estimates it has lost more than $50 million this summer from lost power production at Browns Ferry and coal plants in Tennessee and Alabama.

Because of power reductions at Browns Ferry, TVA's largest nuclear plant, the utility was forced to buy higher-priced power from other producers.

TVA uses the fuel cost adjustment to help recover fluctuating fuel and purchased power costs.

TVA, the nation's largest public utility, supplies power to nearly 9 million people in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia.