Electricity Cost Will Increase 4.5 Percent
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WATER VALLEY – Starting next month the city’s electric department customers will pay more for electricity following a 4.5 percent rate hike from Tennessee Valley Authority (TVA). The rate increase was announced by TVA late last month as the entity plans to invest $15 billion over the next three years to build additional generation and upgrade the existing system to meet growing electricity demand. TVA sells it power to 153 local power utilities including the Water Valley Electric Department, Tallahatchie Valley Electric Power Association, Northeast Mississippi Electric Power Association and others in the area.
“I have to be the bearer of bad news,” Water Valley Electric Department Brandon Richardson told city officials during the monthly meeting on Sept. 5 . “We have a mandatory rate hike that will take effect on October 1.”
“This is not just Water Valley, this rate increase impacts all providers who purchase electricity from Tennessee Valley Authority,” Mayor Donald Gray added.
Board members reluctantly voted to pass along the increase to city customers with a split 2-1 vote. Alderman Herbie Rogers and Ron Hart voted in favor of the city adopting a 4.5 percent increase in the city to offset the TVA rate hike. Alderman Freddie Folson said he was not in favor of the city raising the power rates. Alderpersons Bonnie Cox and Nicole Folson were absent from the meeting.
“We don’t have a choice, this is TVA telling us we owe them an additional 4.5 percent starting October 1,” Gray told Folson.
“You can get it, but not with my vote,” Folson countered.
The city spends approximately $6 million annually on electricity purchased from TVA. The increase will add an estimated $270,000 each year.
“We can’t absorb that,” Gray noted.
“So they are working on improvements and it will cost money,” Hart added.
“And we have to pay for it,” Gray agreed.
The mayor also told aldermen that TVA has fallen behind in being able to generate enough power for its customers. He cited a rolling black-out that was mandated by TVA last winter during peak demand caused by frigid temperatures. Gray explained that all power companies that receive electricity from TVA were forced to implement 15-minute blackout.
Richardson said in Water Valley, the blackout was not city-wide and instead he stopped the flow of electricity to some of the largest customers including the school district as the request from TVA was on a Sunday morning.
“But I was told, next time I am going to have to do it,” Richardson said about future peak periods if TVA cannot meet short-term demand.
Richardson also predicted that there could be more increases from TVA in the future.
“I think it will be more increases before it is over,” Richardson said. “They bumped it the maximum this time.”
A TVA press release stated the rate hike was adopted to ensure the region has the energy it needs to meet growing demand and economic development. TVA said the 4.5 percent increase translates to an average increase of about $3.50 on a typical residential energy bill each month.
