The Tennessee Valley Authority approved a $10.55 billion budget for fiscal 2019, but Tennessee's electric cooperatives have serious concerns with plans for ongoing rate hikes.

TVA's blueprint for cutting its debt includes annual base rate increases of 1.5 percent for the next several years, and so a 1.5 percent hike is in the spending plan approved Aug. 22 by the agency's board.

The increase kicks in Oct. 1, the start of TVA's new fiscal year. John Thomas, chief financial officer, said it's expected to generate $199 million. He told the board that under the plan the increases will continue even in years when TVA has good financial results.

Some 150 co-ops and municipal systems receive power from TVA, including more than 20 co-ops in Tennessee, where the statewide association noted that TVA already has some of the highest wholesale rates in the region. And it warned the hikes will have a big impact on consumers.

"We celebrate TVA's efforts to reduce debt and operations and maintenance costs, but Tennessee's electric co-ops challenge TVA to reconsider their plans for additional increases to wholesale rates," said David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association.

"With no further increases, TVA's debt will be much lower than the debt level targets set by their board. Our consumers and the communities we serve depend on affordable and reliable energy, and we do not believe that additional increases are in the best interests of TVA or Valley ratepayers," said Callis.

Bill Johnson, TVA president and CEO, said the agency has managed to cut $1.6 billion in debt, which topped out in 1996 at $28 billion. TVA, which earlier this month said it expects to have favorable fiscal 2018 results, has committed to the Office of Management and Budget that it will reduce its debt to $21.8 billion by 2023.