As most of us have been reading about in the papers and hearing on TV for months, TVA has implemented a rate increase effective April 1, 2008 as well as an increase in their quarterly fuel cost adjustment. While most other utilities in the area have added their own increases on to TVA’s, the Harriman Utility Board is proud of the fact that we have not added our own increase at this time.

The news media has announced TVA’s rate increase to be 7%. However, this is on the wholesale rate that HUB pays TVA for power and actually relates to an increase of about 5% on the retail rate to our customers. In addition to this rate increase TVA adds a Fuel Cost Adjustment (FCA) to our wholesale rate each quarter to account for the volatility of fuel costs as related to TVA’s budget projections at the beginning of their budget year. This adjustment can be positive or negative. The FCA for the quarter from Jan. 1 to March 31, 2008 was 0.010¢ per kWHour (on wholesale rate). For the quarter beginning April 1, 2008 the FCA is 0.550¢ per kWHour.

The overall result of TVA’s rate change and the increase in the FCA is about a 16.5% increase in TVA’s wholesale rate and an increase of about 12.9% increase in our retail rates to our customers going from the March rate to the April rate.

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