Published: March 11, 2008 03:51 pm            

TVA approves new rate increase for city residents

Monticello — A rate increase for the Tennessee Valley Authority translates into

higher electric rates for Monticello customers of South Kentucky RECC. The

TVA Board has approved a 7 percent rate adjustment on base wholesale

electric rates, which becomes effective April 1.

In addition to the 7 percent base rate adjustment, TVA has also approved

an increase for the quarterly adjusted fuel charge by approximately .00299

cents per kilowatt-hour. Together the two changes will translate into an

increase in electric rates of about 9.5 percent for former Monticello

Electric Plant Board customers.

That translates into an increase of about $8.62 per month for the

average residential customer who uses 1200 kilowatt-hours per month,

according to a statement issued last week by South Kentucky RECC. South

Kentucky RECC acquired the Monticello Electric Plant Board on December 31.

In the statement, South Kentucky RECC CEO Allen Anderson said the co-op

was aware last year that TVA could ask for an increase from all distributors

in early 2008.

"This TVA rate adjustment will affect only South Kentucky members

previously served by the Monticello Electric Plant Board," Anderson

explained. "South Kentucky RECC agreed to fulfill the remaining time left on

the TVA/ MEPB power supply contract, which expires in November 2008. This

simply means that South Kentucky RECC has to purchase all power needed to

serve the recently acquired MEPB customers until November 20, 2008. It will

be necessary for South Kentucky RECC to pass on to the former MEPB customers

this TVA increase."

"South Kentucky RECC promised during the time of acquisition that we

would not increase rates through 2008 for our own financial requirements,

but if the wholesale power provider, or TVA, increased the wholesale power

rate, we would have to pass it on to the customers, which is what is in the

process of occurring," Anderson continued. "As of November 21, 2008, plans

call for East Kentucky Power to become the wholesale power supplier for all

South Kentucky RECC members, including our new members in Monticello. RECC

will always stay focused on keeping rates as low as possible while providing

quality service."

Anderson noted that the proposed TVA increase will affect customers

differently based on their usage and rate classification.

TVA has indicated the rate adjustment is necessary to invest in new

generating facilities and energy efficient initiatives. The Fuel Cost

Adjustment, according to TVA, is due for the most part on the lack of

rainfall, which reduced hydro generation and resulted in TVA having to

purchase additional power.

        

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