MUSCLE SHOALS, Ala. – Eight days before the agency’s 85th anniversary, the Tennessee Valley Authority board of directors today approved measures to help ensure the continued evolution of services that add value to Valley residents and businesses during its meeting in Muscle Shoals.
Since its beginning in 1933, TVA has changed to meet the needs of those it serves. Taming the Tennessee River system has led to transportation, community water supplies and recreation that today generate annual economic impacts of $1 million per shoreline mile.
Hydroelectric power and rural electrification have grown to include a diverse generation and transmission system that produced more than 50 percent of the power used in the Valley in the last six months from carbon-free sources and delivered it with 99.999 percent reliability.
Agricultural improvements and reforestation has evolved into an economic development partnership with hundreds of state and local agencies that attracted or retained 42,000 jobs and secured $8.5 billion in capital investment in the Valley over the past six months.
“These successes are the legacy of generations of TVA employees whose ability to adapt to changing times allowed them to evolve how we serve the needs of more than 9 million people each day,” said TVA President and CEO Bill Johnson.
“Today, we build on their legacy by evolving our pricing structure to ensure rates remain as low as feasible and are fairly distributed to everyone who benefits from the safe, reliable energy Tennessee Valley public power providers deliver while supporting increased customer interest in renewable and dispersed energy sources.”
The board approved the establishment of a wholesale fixed rate equal to six percent of the wholesale rate—the equivalent of about $0.005 cents per kilowatt-hour. The variable portion of the wholesale rate will be reduced by the same 6 percent, or $0.005/kWh, making the change revenue neutral for TVA.
The new structure is consistent with other utilities and service providers across the country. Individual monthly power bills across the region may vary slightly as local power companies incorporate this change into their own rate structures beginning October 1, 2018.
In another action to address the evolving energy marketplace, the board authorized a three-year pilot program to establish an optional electric vehicle charging rate. The growing public interest in electric vehicles could further reduce carbon emissions and improve air quality in the Valley while providing another effective use for TVA’s cleaner energy.
The board also:
The improved performance of all of TVA’s generation and transmission assets has allowed a further reduction in its operating expenses over the first two quarters of the fiscal year. Interest costs also remained lower than budget and favorable cash flows reduced debt. Combined with high power sales driven by the colder weather this winter, these factors resulted in an improved net income.
“Our positive financial performance is directly related to improved operational performance, which helps us maintain rates as low as feasible,” said TVA Chief Financial Officer John Thomas.
“Our effective wholesale rate remains 2 percent less than it was in 2013 and our retail rates are lower than about 75 percent of the U.S.”
Additional Q2 FY18 achievements include:
“Fifty-five years ago, President John F. Kennedy stood not far from where the board is meeting today and prophesized that the work of TVA will never be done and there would always be new places for us to go,” said Johnson. “He challenged us to ensure that the letters T-V-A would stand for progress, and we take that charge seriously.”
“TVA’s performance during the first six months of the fiscal year is evidence of how we are still delivering value to those we serve. We will continue to evolve to meet their needs and support the region’s progress for the next 85 years and beyond.”
The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving more than 9 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system and assists local power companies and state and local governments with economic development and job creation.
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