TVPPA and TVA will require a “new business model” to best serve the Valley in the future.
So said TVPPA President/CEO Doug Peters at an Aug. 22 TVA Board of Directors meeting in Knoxville, TN. The centerpiece of the meeting was the TVA board’s approval of a FY2019 budget of $10.55 billion that continues its debt reduction and includes, for the sixth straight year, a 1.5-percent wholesale rate increase for TVPPA-member utilities.
“The TVA Act and the current Wholesale Power Contract clearly empower the TVA board to … protect TVA’s long-term financial viability,” Peters said. “This responsibility is to be balanced against maintaining wholesale rates [that are] as low as possible.
“Today, many TVPPA members see an imbalance,” Peters said. “TVA is taking the necessary steps to ensure its future, but is doing so by placing an unequitable amount of competitive risk on TVPPA members. We need to develop a new business model for the Tennessee Valley that … provides a transparent balance between TVA’s bondholders and TVPPA-member ratepayers.”
The rate increase is set to take effect Oct. 1. TVA President/CEO Bill Johnson has said that after one more such increase next year, TVA could ‘forgo’ the last three annual increases included in its 10-year financial plan.
“The hard work and focus of TVA’s employees has consistently kept us on course for better financial and operational performance, and we are seeing those efforts in our results,” Johnson said. “Our FY19 budget reflects our ongoing commitment to serve the people of the Valley with safe, reliable and increasingly cleaner power at the lowest feasible rates.”