Meeting May 10 in Muscle Shoals, AL, the TVA Board of Directors approved a rate change, to be enacted this fall, which restructures the way basic service costs and access to the grid are recovered.
Here is a statement released by TVPPA following the meeting:
TVPPA and TVA agree that our industry is facing far-reaching changes through distributed generation, energy efficiency, technological advances, shifts in customer behavior, and regulatory requirements that are already impacting the traditional electric-utility model of service. Identifying and addressing costs of providing electric service is a critical factor in meeting these challenges.
To that end, TVA initiated discussions with TVPPA to find a pathway to changes that encompass pricing structures and rates affecting our local power companies (LPCs) and directly served customers. Since September 2016 we have sought agreement on ways to refine the structure of TVA’s wholesale rates and better align them with underlying costs.
Of paramount importance to TVPPA is awareness that residential, commercial and industrial customers served by our members have widely varying and diverse needs. This diversity necessitates a solution allowing each LPC the flexibility to respond based on the unique needs of its customers.
The approval by the TVA Board of Directors of a rate change to be implemented this fall restructures the way basic service costs and access to the grid are recovered. Passage of the “Grid Access Charge” (GAC) is intended to lower energy prices at the wholesale level and allow LPCs to develop solutions at the retail level that more fairly distribute costs across all rate classes.
As is the case with most decisions affecting our 154 LPC members, there is a diversity of opinion about the GAC and its implementation. TVPPA believes that implementation of this year’s rate change may help with these pressing issues.
We are committed to embarking on additional negotiations with TVA that acknowledge the interdependence between the wholesale rate structure change and LPC flexibility to respond to marketplace demands and customer expectations. We also recognize the importance of local control when it comes to retail rate solutions.
We support a revision to the wholesale power contract that would allow our members to respond to their customers’ distributed generation requests. Because the marketplace already provides distributed generation resources to LPC customers, it is critical that we are given flexibility to execute the parameters of the existing wholesale contract with TVA to enable them to actively engage in the marketplace as well.
In order to compete with third parties who can currently accommodate customers’ distributed generation requests, we are convinced that our next body of work with TVA will be to address, in a timely fashion, contract flexibility.