Tennessee Valley Authority Moving Towards Time-Of-Use Rates

John Span

The Tennessee Valley Authority (TVA) is moving towards time-of-use (TOU) rates for their wholesale customers in Kentucky, Tennessee, Alabama, Mississippi, Georgia, North Carolina, and Virginia. This may be a signal that retail utilities served by TVA might change their pricing structures. TVA does not have the authority to impose rate structure or pricing changes on retail utilities because the utilities may purchase wholesale energy from other sources.

The TOU rate structure is a customer energy management tool. It gives a customer the option to move load to a time period of lower energy cost. Energy budgets may be impacted if a customer is unaware of the pricing periods or if On-Peak use by the customer is coincidental with the On-Peak pricing period of the utility.

The change to TOU rate schedules has been met with opposition. Some customers have concerns regarding Smart Meters designed to meter TOU loads. The opposition to Smart Meters has forced some utilities to offer opt-out options. This opposition is usually fueled by cost increases which result from a misunderstanding of the pricing options available or from an inability to move usage to a less expensive time period. The transition from a traditional flat rate schedule or a declining price rate schedule to a TOU rate schedule may be confusing and expensive because the unit price of electricity changes throughout the day.

Local retail utilities provide approved rate schedules for TOU energy pricing in their tariffs and make major marketing efforts to announce the change to TOU pricing in their service areas when they occur. The pricing schedule is unique for every retail utility depending on the sources of the power and the utility’s own unique usage pattern.

156 of the utilities on the TVA list of retail utility customers are listed in the Ecova database.

Please review more details about the TVA change to TOU Pricing.

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The Information In This Page Is Offered Only For General Informational And Educational Purposes. It Is Not Offered As And Does Not Constitute Legal Advice.

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