Update on TVA's rate structure changes

As expected, the Tennessee Valley Authority board did approve a rate structure change that went into effect October 1, 2015.

“Ripley Power and Light adjusted rates to coincide with the TVA rate structure change,” said Mike Allmand, Ripley Power and Light President and CEO.

Power and Light customers are seeing an average rate increase of 3.5 percent, Allmand said. The increase was applied to meters that were read after November 1.

TVA is structuring rates to more closely reflect the changing costs of generating power, which fluctuate with shifts in demand from one season to the next and during different times of the day, Allmand explained.

“Large industrial customers already have their rates based on time of use, meaning their rates are lower when fewer people are using electricity. Over the next decade, all customer rates are moving toward time of use.”

The rate changes make energy efficiency all the more important, he added. “Those customers who take steps to decrease the amount of energy they use will see less of an increase on their electric bills.”

Unfortunately, customers should expect to see TVA increase rates every year for the next five years or so as TVA meets today’s and future costs for generating electricity.

Ripley Power and Light will continue to offer energy-efficient incentives to help customers use electricity in the most economical way possible, Allmand said. “It is always our goal to help customers minimize any rate increase as much as possible.”

How Customer Revenue is Used

Residential Rates

(Effective August 2016)

Ripley Power and Light’s customers enjoy some of the lowest electric rates in the country.

We buy our electricity from the Tennessee Valley Authority, which has a history of providing lower-cost electric power. For residents in the TVA region, for example, the average cost of one kilowatt-hour — the amount of electricity it takes to burn ten 100-watt light bulbs for one hour — is 6.4 cents, while the national average is 8.5 cents.

The purchase of electricity is a large amount of Ripley Power and Light’s electric cost. About 82 cents of every dollar paid by our customers for electricity is used to purchase energy from TVA.

The chart below shows Ripley's residential electric rate; it should be used to determine an estimation only.

Rates From Previous Months

Fuel Cost Adjustment

Tennessee Valley Authority's Board has adopted using Fuel Cost Adjustments in response to volatile swings in energy costs. This allows TVA to adjust its rates up or down each month to reflect the forecasted difference in fuel and purchased power costs.

Many utilities across the nation and most of TVA’s neighboring utilities use similar mechanisms to adjust their rates. Adjusting rates monthly has less impact on customers and prevents large movements in rates in either direction.

Ripley Power and Light passes through TVA's Fuel Cost Adjustment to our customers. It does not change our basis electric rates to our customers.

TVA changes the way it calculates electric rates