TVA's Proposed 2018 Rate Restructure
The purpose of this website is to share information related to TVA’s proposed rate change.
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- Spend some time reading through this site to learn about the value of the grid and the 2018 Wholesale Rate Change. You can visit our homepage at TVA.com for even more information.
Your Priorities, Our Mission
Low-cost energy is vital as you balance your home budget and make important financial decisions. As residents of the Valley, we understand; we care about the same things. At every level of our organization, we make sure energy is generated, transmitted and delivered with maximum reliability to our local power companies – and, ultimately, to you.
Tennessee Valley residents enjoy electric rates lower than 70 percent of the country – to continue this trend and keep rates low for generations to come, TVA is restructuring rates. We recognized the need to modernize our current rate structure so that it better aligns to changing market demands and with the cost to deliver power.
TVA’s mission is one of service, and we take that mission very seriously.
What Is Public Power?
TVA partners with your local power companies to provide them, and in turn, you, with wholesale power at a low rate. TVA charges what it costs to run the grid – the system of transmission lines and power plants that provide energy across the Valley. We make NO profit and receive NO federal funding to maintain the vast network of resources needed to power the Valley. That philosophy is at the heart of public power.
As your energy partners, TVA and your local power companies are powered by people you know – we are your neighbors and friends; this region is our home, too. As such, we are invested in the social and economic well-being of the communities we serve in the Tennessee Valley.
Your Local Power Company and You
TVA is required to deliver power at the lowest feasible cost to your local power company. This has been part of our mission from day one, and that mission hasn’t changed in 85 years.
We generate safe, clean, reliable and affordable power for the region’s homes and businesses, working with local power companies to keep service steady and reliable.
In turn, your local power company delivers power directly to you and bills you based upon fixed costs and variable costs. So, what are these fixed and variable costs?
Fixed costs are things we have to pay for no matter how much energy is used, such as:
- The infrastructure needed to generate and transmit power across the Valley;
- The equipment our staff uses every day to service the power system;
- And the personnel that makes power work for you day and night.
Variable costs change depending on the market and environmental conditions and the amount of power you use, this includes:
- Fuel to generate power;
- And, any power we purchase from neighboring utilities when we can lower costs.
For several decades, utilities across the country based 90% of their bills on variable costs and energy consumption. And that worked well. But not anymore.
Rate Restructuring: Why Now?
So, why the need to restructure rates now? Rapidly advancing technologies, like appliances that are more efficient and home-based solar power, have changed the demand for energy consumption. This is a good thing!
While the demand for energy has changed, the infrastructure required to maintain a reliable and resilient power grid remains the same and needs to be in a constant state of good health. TVA is making sure that you and your communities are served by a reliable power system that is there when you need it. And that businesses, schools and hospitals can trust the grid will be there to provide you with essential services.
TVA 2018 Rate Change Proposal
TVA is proposing to restructure the way local power companies are charged for power. This rate change is not a rate increase.
In fact, we are not charging more for wholesale electricity. The new change in the rate structure will lower local power companies’ energy rates and establish a grid access charge in an equal amount.
This is being done to more fairly allocate costs: ensuring the cost of power is spread across everyone who benefits from access to the grid, and helping stabilize monthly bills and reducing higher bills in extreme summer and winter weather.
What Do Changes Mean for Me?
Changes in the wholesale rate structure would have a small effect on consumers based upon each person’s individual usage. Some residents will see overall lower bills, and some residents may pay $1 to $2 a month more on their energy bills if their local power companies choose one of TVA’s recommended rate options.
You still control your bill by choosing how much power you use and being more energy efficient. The rate restructure will better account for fixed costs, while still being based mainly on energy usage. This will help balance rates so that they remain equitable in the long-term.
With this proactive change to our rate structure, TVA will continue to provide a stable foundation that gives the flexibility to embrace new trends and to continue delivering more innovative energy options.
What Rates Provide You
This proposal is an example of how TVA and local power companies have the Valley’s best interests at heart. We are doing the right thing – the best thing – to keep rates as low as possible now and into the future.
From our system of hydroelectric dams, to our role supporting STEM education, food pantries and disaster relief, TVA’s rates provide a better life for all of the nearly 10 million residents we serve with our local power company partners.
All of this work is vitally important – and all of it is funded through energy sales.
Help Managing Your Bill
Consumers’ behavior and weather continue to be primary factors in energy bills. This holds true under TVA’s proposed rate change.
You still control your energy bill by choosing how much electricity you use and being more energy efficient.
If you are interested in additional resources to help better manage your bill, TVA offers eScore™ – a program developed through a partnership between TVA and local power companies to provide homeowners with a simple way to make existing homes as energy-efficient as possible. If interested, learn more at the eScore website.
You can find additional information and tips from TVA about how to save money, and energy, and lower your electricity bills here.
You can also reach out to your local power company for advice and programs available in your area.
Service is at the heart of everything we do at TVA. We are dedicated to our mission – to serve the people of the Valley to make life better.
The proposed rate change simply aims to align prices more accurately, and fairly, with the cost of the power system – particularly the cost of the grid and transmission system that serve customers across our seven-state region.
As we celebrate our 85th anniversary this year, we intend to continue delivering value to the people, helping to make life better for all – and to shine more brightly together.