Electric bills to increase Oct. 1: McMinnville Electric, Caney Fork raise residential rates
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The moves were made by TVA’s three directors to raise an additional $365 million a year. That revenue will be earmarked to purchase air-pollution reduction equipment.
Residential, commercial and government rates were raised 7.4 percent by TVA, while manufacturers will see a 2 percent decrease. The new rates will take effect Oct. 1 and are scheduled to last 10 years.
Both local electricity distributors, McMinnville Electric System and Caney Fork Electric Cooperative, announced yesterday they have no alternative but to convey similar increases to their customers.
“I don’t like it, but we have no choice,” said MES general manager Rodney Boyd. “TVA has been very close-minded to the wishes of their distributors.”
Boyd and Caney Fork general manager Hubert King both said that while they are upset with the changes, it is not the rate change itself which has stirred their ire.
“I think we’re all in agreement that extra money is needed for pollution control. That’s the best thing for TVA and for the Tennessee Valley,” said Boyd. “My disagreement is over the process. Historically, TVA distributors have come to a consensus before a rate change, but this time they didn’t give us enough information with which to agree or disagree.”
King said he, too, supports a cleaner environment, but believes the rate restructure, which lowers the rate paid by manufacturers, is the wrong way to fund it and that the upgrades ought to be funded by all.
“TVA says the rate decrease is needed to bolster the valley’s manufacturing economy through more competitive electric rates,” said King. “While commendable, there has been no convincing data provided by TVA to power distributors showing that the rate decrease will achieve its intended purpose. Further, public facilities like hospitals, schools, universities and churches, as well as some of the largest employers in the Tennessee Valley, don’t qualify for the rate reduction even though they are also having serious economic problems.”
Local manufacturers which will soon see their rates decrease include: A.O. Smith, Bridgestone, Carrier, Cumberland Lumber, Oster, Powermatic Foundry and Yorozu Corporation.
Caney Fork residential and commercial customers, King said, will see increases of 7.4 percent, exactly mirroring those passed on to the co-op by TVA. He added he has not yet determined how much the increase will affect an average customer dollar-wise.
Boyd said the average MES residential customer will see a rate increase of 5.9 percent. Assuming an average usage of 1,106 kilowatt hours per month, the average residential customer will see his or her bill increase by $4.09 a month.
Other MES rate changes include a 5.6 percent increase for small commercial power usage, a 6.9 percent increase for large commercial power usage, a 6.8 percent increase for non-manufacturing industrial power usage and a decrease of 2.3 percent for manufacturing industrial power usage.
Asked why the system’s increased rates are lower than those passed on by TVA, Boyd explained generators installed two years ago allow the system to keep its costs below that of other TVA distributors — savings which are in turn passed on to customers.
The bad news:
• MES residential customers will see a rate increase of 5.9 percent. The average increase will be $4.09 a month.
• Caney Fork residential and commercial customers will see increases of 7.4 percent. Caney Fork officials have yet to determine an average increase.
• Manufacturers, however, will see a decrease of 2 percent.