TVA Will Raise Wholesale Rates October 1, 2008

It seems this is becoming a nightmare that just won't end - Another power rate increase from TVA!!! This week, the TVA Board of Directors approved a 20% increase in wholesale rates that will take effect October 1, 2008. This will likely translate into a 14-18% retail rate increase for all Scottsboro EPB Electric Customers. Most of the increase, $11.20 per 1,000 kilowatt-hours, will go toward the escalating costs of fuels used to generate electricity. Coal, natural gas, and purchased power costs are increasing at alarming rates consuming hundreds of millions of dollars more in 2008 as compared to 2007.

An additional $2.05 per 1,000 kilowatthours is an increase in base electric rates to cover higher costs in in several other areas - cost of working capital, cost to reserve future power purchase, and investments in energy efficiency.

TVA's budget for 2009 includes $12.613B for operating expenses and $2.088 for capital investments. TVA will spend $232M in clean-air projects to reduce emissions at six TVA coal-burning plants and $325M for improvements to the TVA Transmission System. TVA will spend $1.056B to expand generating capacity which includes work to complete Watts Bar Nuclear Unit 2.

I want you to know the Scottsboro EPB is working to keep power rates as low as possible. In January, SEPB absorbed $350,000 in additional fuel costs charged by TVA. Then, in April of this year, SEPB absorbed an additional $300,000 of increased costs when TVA raised wholesale power rates to SEPB $1.3M. We will look at what we can do to absorb some of these recent power increases as well.

For now, SEPB recommends that every electric customer reduce use especially during the Summer months from 3-8 PM and from 6-9 AM in the Winter months. During those time periods, TVA is having to purchase expensive power from outside the Valley. If we can reduce the amount TVA has to purchase and continue to help TVA build new low-cost generation, it is possible to slow the increase of these electric rate increases.