Revenue-neutral rate change

Powell Valley Electric Cooperative has always made the delivery of affordable and reliable electricity to our members a priority. As a member-owned Cooperative, we continually evaluate our rates and fees to maintain long-term financial health while also providing affordability and greater reliability.

Starting April 1, 2024, your Cooperative will be implementing a revenue-neutral rate change that involves decreasing the energy charge component while slightly increasing the fixed customer charge.  The term “revenue-neutral” means that the overall revenue generated from the increase in customer charges will be offset by a reduction in energy charges; therefore, the Cooperative will not receive additional revenue.  This adjustment is designed to better align our revenue with the costs of maintaining and upgrading our infrastructure, especially during periods of high demand.

What this means for Residential Members:

In 2023, the average residential member used 1,072 kilowatt-hours (kWh) per month at a cost of $121.22.  After the revenue neutral adjustment, the average member’s bill will remain the same.  Residential members using more than 1,072 kWh per month will have a slight decrease in their monthly bill, and, conversely, residential members using less than 1,072 kWh will have a slight increase in their monthly bill.

What is a Customer Charge?

The customer charge is the fixed amount of the bill each month that covers the costs of providing service to each location. These costs include the purchase of meters, poles, transformers, clearing rights-of-way, some administrative expenses such as generating, printing and mailing monthly bills, as well as the continued maintenance of all facilities.

We understand that any change to rates can impact our members, and we want to assure our members that it is not taken lightly.  It is important to recognize that this change is imperative to meet the rising energy demands, uphold service reliability, and ensure the long-term financial health of the Cooperative.

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TVA issues rate increases

The following will also be featured in the Manager’s Comments section of the October magazines.

Members of Powell Valley Electric Cooperative should expect to see an increase in their electric bills beginning in October. Our average residential member-owner will pay around $5.00 more per month for energy.

As a member-owned cooperative, we want to speak plainly with you about this change in our rates. There are two main factors that led to this increase.

The Tennessee Valley Authority recently announced a 4.5% increase to the rates it charges Powell Valley Electric Cooperative for energy. The need to construct new power plants, inflation and higher interest rates were some of the reasons the TVA board elected to increase prices. Powell Valley Electric Cooperative purchases all our energy from TVA, so this increase means that we will pay more for energy than we have in the past.

TVA also announced it will be suspending the 2.5% Pandemic Relief Credit it has extended to Powell Valley Electric Cooperative since 2020. Our Board of Directors had previously voted to pass 100% of this money through to its members each year. The suspension of this credit will also have an effect on members’ bills.

It is important to put these changes into context. Even with the increase, Powell Valley Electric Cooperative’s rates remain below the national average. In June, the national average price for residential energy was 16.11 cents per kilowatt-hour, 6 cents higher than PVEC’s average residential cost.

National averages aside, we understand that this will have very real impacts on families and businesses in our communities. We believe it is important to be upfront with you about these rate increases. We understand that this may place a financial burden on our members. If you’re having trouble paying your utility bill, help may be available. Learn more about payment assistance options at https://www.pve.coop/account/energy-assistance and https://energyright.com/residential/energy-assistance.

While rates might change from time to time, one thing remains the same: We are committed to acting in the best interests of our consumers. We are making smart investments in the power grid to ensure that our communities have the energy you need, today and tomorrow. The team at Powell Valley Electric Cooperative remains focused on providing you with safe, reliable and affordable energy, and that is something you can count on.

September 2023: News from your cooperative