KYLE MURPHYStaff Writer

The Tullahoma Utilities Authority Board of Directors recently approved a 3.3% retail rate increase to make up for losing a pandemic credit from the Tennessee Valley Authority.

According to TUA President Brian Skelton, the Rate Committee met earlier in the week to consider a 3.3% average retail rate increase across the board for all classes of service.

“This rate increase will be on kilowatt hours (kWH), demand, coincident peak and facility charges for commercial customers,” Skelton told the board of directors in the July morning meeting. “There is not a proposed customer charge, which is currently $24 [a month] for residential customers.”

Skelton said that some customers, based on the time of year and how much kWH they use, will see more or less, noting that lower usage customers will see a lower percent increase because there is no customer charges as part of the bill. If approved, it will go in effect on Oct. 1.

“In general, customers will see anywhere from a three to a four percent increase in their utility bill,” he said. “So that will relate to probably just between $3 to $4 on a residential average bill.”

He added that the Tennessee Valley Authority (TVA) is rescinding a “pandemic credit” on TUA’s electric bill after September of this year, which 46.6% of the proposed electric rate increase is needed to make up for the loss of the credit. Skelton said the loss of the credit will cost TUA $460,000 a year. TUA Chairman Bob Lindeman said costs for equipment to keep the utility running has gone up “astronomically” and noted that this will be the first time in four years that TUA has seen an increase.

 “We don’t ever want to make an increase, but it’s the times,” board member Mike Stanton said. “Things cost more.”

Stanton added that while it had been four years since an increase it has also been 11 years since the previous increase, so if things stay as consistent as they are the committee is hopeful that it will probably be another six to 10 years before next rate increase. Skelton said that there will be some debt service that will be ending in about four years which will open opportunities to extend not increasing the rate further. He added TVA will probably will also have a rate increase which they will pass on and will not be keeping any money from that.

Mayor Ray Knowis asked Skelton what did “customer charge” meant, and Skelton explained that the customer charge is the charge TUA makes for the availability of the service, the energy coming from the transformer to the wires to the electric meter they read. He added TUA did a cost of service survey years ago and said if they tried to get all the fixed costs back then the charge should be $35 a month, but the expense is the main complaint TUA receives from customer.

“As you said, people don’t understand what that is and we have attempted to explain that,” Skelton said. “We just made the decision to not increase the customer charge because we get so much negative feedback on that charge already.”

After further discussion, the board unanimously approved an average 3.3% increase in the overall TUA retail electric rates as approved by TVA with the increased revenue coming from kWH, demand rate, increased coincident peak rates and facility charges.