TVA rate increase passed through to JEA customers

With the recent rate-increase announcement by the Tennessee Valley Authority Board of Directors, electric customers across the region are going to see a slight bump in their utility bills after Oct. 1.

Electricity service providers in the Tennessee Valley network purchase and distribute electricity generated by TVA. Consumers are going to see TVA’s five-percent rate increase passed through from their service providers, including the Jackson Energy Authority.  

“This most recent TVA rate increase is ‘passed through’ to all electric customers of the Jackson Energy Authority. However, the TVA, not JEA, receives the funding from this rate increase,” Steve Bowers, JEA communications representative, noted.

Other than the five-percent rate increase, JEA customers shouldn’t expect to see an additional increase by their service provider.

“The local rate for electric service charged by JEA to cover JEA costs has not changed since October of 2018. No changes in the local base rate are currently planned,” Bowers shared.

Jackson Energy Authority provides electric services to residential, commercial and industrial customers in Jackson and some areas in immediate proximity to Jackson.

Recently, TVA’s Board of Directors announced an additional $150 million in advanced nuclear funding. In addition, the Board proposed investments for 10,000 megawatts of solar energy by 2035.

TVA claims the increase will help to fund ongoing construction and energy development. The TVA Board approved a 5.25 percent base rate increase that will take effect Oct. 1, 2024. An average residential bill in Fiscal Year 23 was about $138 and this increase will translate to about an additional $4.35 each month, according to TVA’s press release.

According to a press release issued by the energy conglomerate, the additional advanced nuclear funding is to support continued design work and TVA’s development of potential small modular reactors (SMRs) at its Clinch River site near Oak Ridge, Tenn. This brings the total investment for the Clinch River site to roughly $350 million. TVA Board members approved allocation of $200 million at their February 2022 meeting.

TVA directors claim a nearly 60 percent carbon-free energy generation, with plans to further transition to clean energy “to power the region’s growing population and economy.”

 “We believe advanced nuclear technologies will play a critical role in our region and nation’s drive toward a clean energy future,” said Jeff Lyash, TVA President and CEO. “Today’s Board decision demonstrates TVA’s commitment to continue leading in this effort.

“Small modular reactors are an energy innovation technology that America must dominate – for our energy security, which is really our national security,” Lyash noted in a press release.  

Addressing Growth Challenge

According to TVA, the region’s population is growing three times faster than the national average, and in 2023, GDP in TVA’s service territory grew 0.5 percent faster than the national average.

To address the need for more electricity, TVA is investing nearly $16 billion through Fiscal Year 27 to build new generation and infrastructure and enhance the reliability of existing assets. The agency is building ~3,500 megawatts and has made great progress by completing 1,400 megawatts and securing 800 megawatts of solar this year.           

“As energy demand grows due to greater reliance on electricity, new residents moving to this region and new economic investment, we need a diverse fleet that leverages multiple generation sources,” said Lyash. “The answer to keeping our energy secure, affordable and reliable is a well-rounded portfolio that is increasingly carbon-free and substantially expandable – and TVA’s portfolio is one of the most diverse in the nation.

“We recognize that people don’t pay rates, they pay bills, and that matters,” said Lyash. “We know this is a kitchen-table issue for many families across our region. At TVA, we don’t like price increases any more than you do, and that’s why we continually work to reduce expenses by hundreds of millions of dollars each year. We have done everything possible to absorb costs as we invest in the reliability of our existing plants, construct new generation to keep up with growth and maximize solar to produce more carbon-free energy.”

In August 2023, the TVA Board of Directors approved a 4.5 percent base-rate increase for Fiscal Year 24. These funds helped support the completion of Paradise and move forward with construction of additional generating resources at Cumberland, Kingston, Johnsonville, and Shawnee.

Lyash pointed out that because of TVA’s diverse generation resources, reduced fuel costs have kept residential rates lower than 75 percent of top 100 U.S. utilities and through the first nine months of this fiscal year power rates were three percent lower than the same period last year despite the rate increase.

“Through our employees’ efforts, innovation and diverse generation TVA continues to have some of the lowest electric rates in the nation,” said Lyash. “We are keeping power affordable by investing in energy efficiency to lower consumers’ power bills, while generating electricity at the right time, with the cleanest fuel, at the lowest possible cost.”

Sabrina Bates, sabrina@richardsonmediagroup.net