Holston Electric blames rate hike on TVA

Jeff Bobo • Aug 21, 2008 at 12:00 AM

‘I know it’s going to affect people who can least afford to pay it.’ — Larry Elkins

ROGERSVILLE — Beginning Oct. 1, electricity rates for the Holston Electric Cooperative’s more than 30,000 customers in Hawkins County and surrounding areas will increase about 17 percent, but General Manager Larry Elkins noted that every penny of that increase will be passed on to the Tennessee Valley Authority.

“We buy all of our power wholesale from TVA, and basically we operate off about 14 cents on the dollar (from billing receipts) that we keep to maintain the lines and build the substations and deal with all the other things it takes to run an electric utility,” Elkins told the Times-News on Thursday. “Our board just met and approved our budget for the next year not knowing exactly what TVA was going to do, and our budget includes no increases whatsoever for us. Everything on this latest increase goes straight through to TVA.”

The average Holston Electric customer uses about 1,200 kilowatt hours, which Elkins said should amount to an average monthly bill increase of approximately $12 per household, but the exact figure isn’t known yet.

“We don’t actually have a rate figure yet from TVA as to what we will actually pay for a kilowatt hour. All we’ve got is the same information TVA passed out to everyone this week,” Elkins said. “All it says is an across-the-board 20 percent increase. Seventeen percent of that is on an across-the-board fuel charge adjustment, and the other 3 percent is a base rate increase.

“We’re still not sure how that’s going to affect our customers, and that’s why I’m a little bit hesitant to say it’s going to be $12 per month or $15 per month. But I know it’s going to affect people who can least afford to pay it.”

Elkins noted that his electric bill, like many customers, is a bit above average, so he knows this increase is going to hit some people harder than others.

“It’s going to be tough especially on our industry because many of our industries have come off some fairly low rates, and over the course of the last two or three years they’ve really been hit hard because a lot of our customers were on interruptible rates, and they’ve had to go on firm rates, and they’ve seen some tremendous increases,” Elkins said.

TVA released information regarding a 20 percent wholesale rate increase earlier this week, stating that the increase was due to combination of water shortages at hydroelectric plants combined with the rising price of fuel it uses to make electricity including coal and natural gas.

About 56 percent of TVA’s power supply is produced through the use of fossil fuels. The drought has also reportedly cut TVA’s hydropower production in half.

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