Base Rate Increase

Effective this October, the TVA Board approved a base wholesale rate increase of approximately 3%. 

Factoring in the Fuel Cost Adjustment, residential customers will see a combined rate increase on their bills just over 15%. That equates to $13-$16 per 1,000 kilowatt hours of electricity used each month.

Why does TVA need a base rate increase?  The majority of the base rate increase is related to the rising cost of coal.  Due to dramatic price increases in recent months, TVA will have to replace its current coal supplies with much higher priced coal.  This significant jump in coal inventory costs is not recovered through the Fuel Cost Adjustment.

Even with the current run-up in coal prices, most coal resources are still cheaper than gas resources.  And, there simply are not enough natural gas-fired plants or renewable resources in the region to replace coal.