TVA’s Proposed Rate Scheme Slated for Approval Thursday

Guest Blog | May 9, 2018 | Press Releases

Dangerous new policy would increase bills for poor, minority, elderly customers

Contact: Jennifer Rennicks, SACE, 865-235-1448, [email protected]


MUSCLE SHOALS, Ala. – Tomorrow, May 10, the Tennessee Valley Authority Board of Directors will consider and is expected to approve a misguided new rate structure that will hike bills on the Tennessee Valley’s most vulnerable residents and diminish clean energy progress. The vote follows a rushed and inadequate public engagement process, resulting in a voluminous “Final Environmental Assessment,” released days before the TVA Board vote. TVA is set to approve new implementation regulations related to the National Environmental Policy Act (NEPA), the federal regulation that creates one of the few avenues for the public to engage in TVA rate setting decisions. It remains to be seen if TVA will approve proposed categorical exclusions that would, among other things, exclude rate setting decisions from public comment and review requirements. TVA is likely setting the stage to implement much higher increases than those the Board will likely approve at Thursday’s meeting. The meeting may be streamed online by clicking here.

A new “Grid Access Charge” in the rate proposal is likely to increase fixed fees – mandatory monthly charges paid regardless of energy use. If TVA approves this proposed rate scheme, residential and small business customers will likely see their monthly fixed fees increase. TVA’s original proposal envisioned total fixed fees increasing up to an average of $350 per year for residential customers, and this week’s expected board vote would be the first step in that process. TVA would be incentivizing and rewarding higher energy users, while slashing savings for families and small businesses who attempt to keep electricity bills low through conservation, efficiency, or building their own solar. This represents the opposite of effective rate policy.

“TVA’s own materials admit that the rate shift will increase bills for those who use less energy. What they don’t show is the faces of those low energy users: our lower- and fixed-income brothers and sisters, and studies show some of them are already being forced to make life-threatening tradeoffs when faced with high energy bills,” said Elder Jimmie Garland, Vice President of the Tennessee Conference of the NAACP. “Hiking fees on customers already struggling to pay their bills and feed their families is a human rights issue. TVA CEO Bill Johnson should be ashamed.”

The data show that 40 percent of households on TVA’s system have an income at or below 80 percent of Area Median Income. These low-income customers use 10 percent less electricity than the general population. The fee hikes TVA has proposed could mean that a significant number of low-income households will pay more on their monthly electric bills.

“TVA’s proposed rate changes will hurt low-income families even more as Lawrence, Alabama is a poor county with little industry here. That’s why we are joining forces with the Tennessee NAACP to urge TVA not to raise fees and families’ electric bills,” said Pastor Jan Turnborne, President of the Lawrence Chapter of Alabama NAACP.

Meanwhile, Mr. Johnson has recently come under fire for the purchase and questionable use of expensive luxury aircraft to visit his second home in North Carolina and take trips outside the TVA region, all while shifting costs from industrial customers to residential customers.

“This is regressive rate making carried out through deception and coercion,” said Southern Alliance for Clean Energy’s Executive Director, Dr. Stephen A. Smith. “Only a self-regulated federal monopoly could get away with raising mandatory fixed fees that negatively impact low-income customers; shift costs off large, direct-serve industrial customers and onto small businesses; and intentionally distort the economics of energy efficiency and solar power investments to limit customer choice, with no independent oversight. These hidden monthly fees are bad public policy and run counter to the very definition of public power.”

TVA’s board meets at 9:30 CST on Thursday morning, May 10 at the Shoals Marriott and Conference Center, in Florence, Alabama. SACE, NAACP, and other stakeholders will attend to provide public comments and will be available for media queries before and after the meeting.

The meeting may be streamed online by clicking here.