CEO Bill Johnson explains how TVA is cutting costs

CHATTANOOGA (WDEF) – TVA has come under fire this week from consumers opening their power bills.

CEO Bill Johnson was in Chattanooga today.

He explained how the agency is cutting costs for consumers.

The big government utility that revolutionized electric power and economic development in the Tennessee Valley back in the 1930’s, is changing.

Chattanooga is the main hub of TVA as far as operations and employees go. But, it’s a slimmed down utility now.

CEO BILL JOHNSON “We’re down to just around $10,000 which is really the lowest level since 1934, the first year of TVA’s operation. And that’s the result of a number of things. We’ve closed a number of coal plants, so we’ve absorbed as many of those people as we can. You can’t absorb them all, and the electric utility business is skrinking people are using less.

Financially, costs and spending are under control according to Johnson.

“Five years ago we got serious and made a long term plan ..a 10 year plan to do a couple of things. Reduce our spending , reduce our fuel bill and reduce our rates and get financially healthier and pay down the debt we have. And we’re making good progress on all those fronts. Our rate is 2% lower than it was 5 years ago.”

TVA, like all utilities around the country, is under pressure to develop and use more renewable energy.

“You know solar and wind are becoming more competitive. They’re getting cheaper every year, they’re still not totally competitive with a lot of the conventional sources, so as they become competitive we will do more and more of it. Because our job is to make the feasible rate for everybody we can.”

How about the allegation that TVA is favoring industrial customers over residential customers?

“the claim that we favor any set of customers over any other customer is just completely false. We set our rates to do one thing…which is to recover the cost imposed by that class of customer. Industrial customers have different cost profile that you do at your house.”

In Chattanooga, Bill Mitchell, News 12 Now.

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But critics this week have cited a new TVA rate study by Synapse Energy Economics.

It found that the agency has been collecting an extra 5% per kilowatt hour from residents since 2011, while cutting direct serve and industrial rates by 20%.

The critics say that breaks down to shifting, on average, an extra $110 per residents last year.

Categories: Business, Local News

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