The 1.5 percent increase was approved with the Tennessee Valley Authority’s 2014 fiscal year budget, and will pass straight through the regional utility to the multi-state agency, Dykes said.
“It’s an increase on their base rates, and that 1.5 percent is on the retail side, so it shows how it affects our customers,” he said. “In times past TVA would add it on the wholesale side, and we’d have to adjust that for what it was, but now they’re just saying what it costs on the end.”
Local customers can expect a monthly increase of slightly more than $1.50 for the average 1,250-kilowatt-hour user.
After a plummet in demand for electricity caused by weather, a weak economy and increases in efficiency, the TVA anticipates a 4.6 percent drop in sales.
The corporation plans to reduce costs by $500 million over the next three years, but a spokesman said last week that the reductions are not keeping pace with the losses in revenue.
Dykes said the board will approve the increase at its next board meeting to go into effect in October, and stressed that the higher monthly bills were not due to a hike in the Johnson City Power Board’s rates.
The municipal utility experienced the same drop in demand last year, but was able to avoid a rate increase by increasing efficiency and reducing operational costs.