Dive summary:
- Industrial customers have been at the core of the Tennessee Valley Authority (TVA) business model since it was founded under President Franklin Roosevelt’s New Deal in 1933. For decades, TVA was synonymous with low electricity rates and, as a result, TVA recruited big-dollar industries.
- But rising industrial electricity rates in the past few years have taken their toll, making TVA lose its competitive edge. Ahead of the federal utility are 34 other states which boast lower rates, according to the latest survey by the U.S. Energy Information Administration. “… TVA’s rates have become uncompetitive to the point where in some cases they are the highest of our industries’ multiple plant locations,” said John Van Mol, spokesman for the Tennessee Valley Industrial Committee, a group of 35 manufacturers served by TVA.
- Tennessee’s average industrial power rate is 7.16 cents per kilowatt hour, compared with 4.11 cents for the state of Washington, which has the nation’s lowest-cost power. This disparity is costing Tennessee Valley jobs and competitiveness.
From the article:
“Even neighboring Kentucky and Georgia, which are partly in TVA’s service area but mostly rely on for-profit utilities, have significantly lower rates: 5.39 cents for Kentucky and 5.93 cents for Georgia.”