The TVA board voted on August 24, 2023 to raise its wholesale electric base rate by 4.5% effective October 1, 2023. The increase translates to an average of $3.50 monthly on a typical monthly residential energy bill and is the first wholesale rate increase by TVA in five years. This TVA increase is automatically passed through to our electric customers and will take effect with October billing cycles.
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The Tennessee Valley Authority Board of Directors approved investing $15 billion over the next three years to build additional generation and upgrade the existing system to ensure the region continues to benefit from affordable, reliable power. TVA is focused on meeting growing electricity demand while maintaining energy security and moving to a net-zero carbon future.
“It took us 90 years to build our current power system which positively changed the lives of millions,” said TVA president and CEO Jeff Lyash. “In the next 30 years, we will have to double or triple the current systems at a speed unlike any other time in TVA history to ensure we can continue to provide affordable, reliable, resilient and sustainable energy to fuel the region’s economic growth.”
In 1950, about 2% of the energy used in the United States came from electricity. Today, it’s around 22% and growing.
During the decade before COVID, TVA’s seven-state region saw almost no electric load growth. Post-COVID, the region has experienced tremendous economic growth, fueled by several factors — including TVA’s clean, affordable electricity. TVA’s base power rates have remained flat during these 4 years while significant investments were made in our power system.
In addition, the area’s population is growing at about three times the national average. “The direction and investments TVA is making now are rooted in the realities of the energy demand around us," said Lyash.
To ensure the region has the energy it needs to meet growing demand and economic development, the TVA Board unanimously approved a 4.5% increase in the effective rate. That translates to an average increase of about $3.50 on a typical residential energy bill each month.
The need for funding to build new generation is not unique to TVA. Even with a rate adjustment, TVA’s energy costs remain lower than 70% of the nation’s top 100 utilities. For comparison, surrounding peer utilities requested or received $6.6 billion in rate increases from February 2022 through December 2023.
“TVA is not immune to cost increase, inflation and supply chain challenges,” said Lyash. “We worked to minimize any impact on families while balancing our region’s growing energy needs, and these funds will allow us to invest in new capacity as well as invest in the reliability of our current assets.”
Over the past 10 years, TVA has invested $25 billion in existing and new generation. Currently, TVA is adding 3,800 megawatts of new generation. Three new flexible, dispatchable units at Colbert came online in July under budget and ahead of schedule.
An additional 1,250 megawatts are scheduled to come online in 2023 and 2024 at Paradise and Johnsonville. TVA is aggressively working to add more than 10,000 megawatts of new solar energy by 2035 and is adding its first battery storage facility in Vonore, Tennessee.
In addition, TVA is working to offset approximately 30% of new load growth in the next 10 years through energy efficiency and demand response programs. TVA will invest $1.5 billion in FY23-27 in energy efficiency and demand response programs to accomplish this, continuing to help lower energy bills.
“Our region’s future is bright,” Lyash said. “The challenge is finding the right balance in changing conditions that are fiscally responsible while ensuring that we can provide the power you need over the next 30 years.”
