By MATT BLOIS
A large power provider in Tennessee may soon lower the price of electricity, but add a new charge to distribute the cost of building and maintaining the power grid. Those proposed changes could increase electricity bills slightly for customers who don’t use much electricity, and slightly reduce bills for customers using a lot of it.
The Tennessee Valley Authority, which provides power for much of the Southeast, has proposed reducing the price for one kilowatt hour by $0.01. To make up for that reduction, they have also proposed adding a new grid access fee. Scott Brooks, a spokesperson for TVA, said the grid access fee would be a 10 to 12 percent charge on top of the price per kilowatt hour.
The TVA is a wholesale power provider. It sells electricity to local power companies like Middle Tennessee Electric or Nashville Electric Service. If TVA’s rates change, those local companies will have to decide how to adjust rates for their customers.
A spokesperson from Middle Tennessee Electric, which delivers power to much of Williamson County, said it was too early to tell how the changes would affect their rates.
The proposed changes would bring in the same amount of money for TVA, but they wouldn’t affect all customers in the same way.
In 2017, customers in the TVA service area used an average of 1,150 kilowatt hours per month and paid about $121.
In a report about the changes, TVA estimated that customers using 250 to 1,500 kilowatt hours could see their bills increase by up to two percent. That would mean an increase of about $0.10 to $2 per month.
Customers that use 2,000 to 7,500 kilowatt hours would see a decrease of about one to three percent. That would mean savings of about $3.69 per month for customers that use 2500 kilowatt hours.
John McFadden, the CEO of the Tennessee Environmental Council, said the changes would reward customers for using lots of energy and punish them for using less.
“Burning fossil fuels causes lung disease. It causes heart attacks in our community. That’s a huge cost on our healthcare system,” he said. “If your home is energy efficient you’re burning less coal … should you have to pay more for that? That doesn’t make any sense.”
He said power companies should have invested in making the power grid more efficient so that they could provide power at a lower cost.
Energy efficient technologies and renewable energy sources, such as solar panels, can reduce pollution and greenhouse gasses produced by power generation. However, the reduced demand for electricity also makes it harder to pay for building and maintaining the electric grid.
Power companies provide electricity, but they also provide the materials to get the electricity from a power plant to a home. A report from TVA argues that customers using less electricity aren’t paying their fair share to maintain the power grid. It said that this leads to other customers having to make up the difference.
Brooks said the purpose of the change was to better distribute the cost of maintaining the power grid among all customers.
He said that people with solar panels on their roofs or people with high energy efficiency have much lower power bills than the typical customer. As a result, they contribute a little bit less to maintaining the power grid.
“But they all still use the grid,” Brooks said. “This is making it fair for everyone who accesses the grid.”
Previously, someone that used solar panels to produce more electricity than they used would have received a payment from their power company. Under the proposed changes, customers can still get paid to put electricity on the grid, but they would also have to pay the grid access fee.
The TVA’s board of directors still has to vote on the proposed changes, and they wouldn’t go into effect until October. The company is taking public comments about the changes through April 9.
The Tennessee Valley Authority is a corporate agency of the United States. This means it is a part of the federal government and provides a public service. But it has to take in more money than it spends, just like a regular company.