The Tennessee Valley Authority has approved a 1.5 percent increase in power rates for fiscal 2018. (Photo By: TVA)
"This modest rate increase recognizes the need for TVA to continue to build on the financial and operational performance improvements we have made over the past three years, while still providing an effective retail rate below 2013 levels that remain among the lowest in the region," said TVA President and CEO Bill Johnson.
The TVA Board of Directors endorsed the increase during its Aug. 23 meeting. The average customer using 1,000 kilowatt-hours a month will see a $1.50 per month jump, TVA said.
The board included the increase as part of a $10.4 billion budget for fiscal 2018.
That's the same bottom line as fiscal 2017. Spending on operations and maintenance remains flat, while the agency focuses on reducing long-term debt. TVA expects to have about 10,000 employees next year, a drop from 12,600 just five years ago.
The authority plans no new baseload generation for several years, as TVA executives told the board that power demand in the region is likely to remain flat or even decrease slightly.
The board also approved a one-time $500 million contribution to the TVA Retirement System, in addition to its yearly contribution of $300 million.
"A major focus on TVA's financial health has been to attend to long-term liabilities, especially related to debt and pension," Johnson said. "The board has taken steps today to reduce both of those through the modest base rate increase and the pension contribution."
TVA provides power to 154 electric co-ops and municipal systems in seven states in the Southeast.