NASHVILLE, Tenn. (WKRN) - Get ready to pay more on your electric bill. The Tennessee Valley Authority (TVA) approved a 5.25% rate hike at Thursday's meeting.
Dr. Stephen A. Smith is executive director of the Southern Alliance for Clean Energy. His group keeps a watchful eye on how TVA serves its customers and calls the TVA meetings "a dog and pony show" due to the lack of transparency.
"They come along and just snap a finger, and here we go - up another 5.25%. And there's nothing anybody can even do about it, or even question it," said Dr. Smith.
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Dr. Smith said getting answers from TVA about rate hikes is challenging. "Unfortunately, we can't answer whether the rate increase is really necessary because they don't do an open process to allow people to really understand what they are doing."
TVA said this new 5.25% hike will add $4.35 to the average electric bill starting October 1.
According to the TVA, it needs the new revenue for infrastructure as the Valley's population is growing three times the national average. For example, here at home, TVA is working to build a new natural gas plant in Cheatham County.
This new 5.25% increase comes on the heels of last year's 4.5% hike, which is a nearly 10% hike. Dr. Smith said that's intentional. According to TVA's contract, the company can raise rates without negotiating with local power companies as long as the hike is less than 10% on a multi-year average.
"And so what they've done is they've strategically targeted this right below 10%, which really prevents the local power companies from being able to go in and question the rate increase, and have any authority to push back on it, and potentially renegotiate their contract with TVA," said Dr. Smith.
There are two parts to your electric bill - the base rate and the fossil fuel costs. The new 5.25% rate hike is added to your base rate. As for fuel costs, they change. And they have stayed lower the past few months. However, much like gas prices, that could change on a dime, and that would send your bill even higher.