The Tennessee Valley Authority approved a 4.5% rate hike as it announced a $15 billion plan to build additional electricity-generating capacity and upgrade the system.
The action came at the agency’s board meeting Thursday. The increase is set to go into effect on Oct. 1. The TVA said the increase translates to an average increase of about $3.50 on a typical residential energy bill each month.
TVA said it plans $15 billion in investments 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.” Last Christmas Eve, there were rolling blackouts across the region caused by the failure of some systems as well as heavy power demand.
“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.”
The utility also said it will keep the Bellefonte nuclear site for “potential use.” In 2016, the TVA voted to sell the Jackson County site and a couple offers fell through.
The TVA said it would use the site to meet power demands of a growing area.
“Our intention is to preserve this for helping us to meet additional power demand,” said Matthew Rasmussen, TVA’s senior vice president of nuclear engineering and operations. “A recently completed study has determined that the best use for the property in the near term (five years) and long term (10 years) would be new generation and energy storage.”
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.
“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.”
