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TVA focuses on working together for economic growth By SUE WATSON
Staff Writer  | Photo by Sue Watson
Tim Weston and Dawn Best |
New
general manager of customer services, Tim Weston, on board at TVA in
Tupelo, and customer service representative Dawn Best met with city
elected officials to strengthen communication links in advance of any
new economic developments. Weston said the
Tennessee Valley Authority is ready to work on any economic development
projects and to work with distributors like Holly Springs Utility
Department to attract investors to the city. TVA
faces the same challenges any other power industry faces in the nation
- rates and capacity overall, he said. There is a general push in the
industry nationwide to increase capacity. He said he hopes citizens will also use electric power wisely to reduce their bills. Power
costs TVA more in high demand seasons of summer and winter and less in
spring and fall, he said. When TVA has to buy extra capacity to meet
peak seasonal demands, that causes a fuel cost adjustment (FCA)
increase to its distributors that is passed through directly to its
customers when fuel prices go up. “Fuel such as
natural gas and diesel may also cost more during high-demand seasons,”
Weston said. “TVA uses a fuel cost adjustment to meet those costs and
that is passed directly to customers through its distributors.” As
economic activity picks up, TVA will continue its long history of
working with the City of Holly Springs and the State of Mississippi, he
said. Alderman Garrie Calhoun asked if the FCA will ever stop showing up monthly on the customer’s bill. Weston
explained that the FCA was instituted in 2006 in response to the
increase in fuel costs; and the adjustment, which can increase in any
month or decrease, is passed directly to the customer to avoid an
increase in utility rates per se. The monthly
adjustment tends to follow the cost of fuel in general and affects
customers like going to the gas pump does. Sometimes it’s up and
sometimes it’s down, he said. “The message I
would drive home to you is to try to reduce your energy use,” Weston
said. “Whether and how people use electricity is what raises their
bill.” A separate interview with TVA spokeperson
Scott Brooks brought out some facts and figures that may help consumers
understand what is going on with electricity bills. The
typical fuel cost adjustment comes in tenths of a cent per kilowatt
hour that is added to the consumer’s bill, he said. In July the FCA was
reset to 0.403 cents per kilowatt - less than half a penny per kilowatt. A residential customer who uses 500 kilowatts in July would pay about $2 more in FCA for the month. The
FCA was instituted in October 2006, not so much to keep up with the
cost of gasoline, but to keep up with rising costs of natural gas or
other fuels and power TVA has to buy on the market, Brooks said. During
extra heavy demand such as in summer and winter, it is sometimes
cheaper for TVA to buy electricity on the market than to gear up a
gas-powered turbine, he said. TVA generates its
power from nuclear power plants year round. It operates some coal-fired
generators year-round as well and others when needed, and generates
power from hydroelectric turbines when water is available and produces
power from natural gas-fired generators. Hydroelectric generation
provides the cheapest source of electricity and is clean. Some wind and
solar power is available but not on the scale as the other sources. The
FCA was once calculated quarterly but TVA moved to a monthly adjustment
in order to minimize the swing in FCA rates. FCA rates went down from
October 2009 through February 2010 and converted to a positive increase
in June. It is normal for people not to notice fluctuations in their electricity bill when their bill is going down, he said. Customers
got a credit in their FCA from October through February because the FCA
was overestimated in months prior to the decrease, Brooks said. TVA
is a public power provider and essentially operates as a non-profit and
no tax dollars are spent to subsidize TVA. TVA has no stockholders but
has a board of directors appointed by the U.S. president and approved
by Congress to oversee the company. A large cost
of generating power comes from spending money to meet government
regulations and those of the Environmental Protection Agency, Brooks
said. “It’s a delicate balance between cheaper energy sources and more environmentally friendly sources of energy,” he said. TVA
spent $5.3 billion beginning in 1977 to install emission controls on
its coal plants and will be spending about $4 billion more over the
next several years. Brooks said those emission control expenses are passed on to the customer. TVA
does expect economic growth in the Tennessee Valley and helps areas to
attract business and people to the area. Large corporate users of
electricity buy electricity directly from TVA and therefore avoid the
higher rates they would pay if buying power from a distributor like
HSUD, for example. That in itself is an incentive for business and industry to move into the Valley, he said.
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