October Rate Adjustment
In September, TVA announced a 1.5% wholesale electric increase to their 154 power distributors. According to TVA, the decision came after considering current and anticipated conditions and costs affecting TVA’s operations – as well as the adequacy of revenues from wholesale and other power customers to recover those expected costs and to meet the requirements of TVA’s bond resolutions and the TVA Act. The increase will be a straight pass through to Pennyrile Electric members resulting in an approximate $1.50 increase on residential electric bills. This increase will apply to all bills mailed after October 1, 2016.
In addition, Pennyrile Electric’s annual rate study determined the best approach to aligning costs is to transfer fixed costs from the energy rate to the customer charge. This allows for the cooperative to account for costs appropriately and make sure their ability to cover operational, maintenance, and repair expenses remains strong. The intent of the customer charge is to cover the costs Pennyrile Electric incurs to build and maintain the system that carries the electricity to members. “Even if we never move a single kilowatt over the wires, we still face these expenses in keeping the facilities in place to carry that energy”, says Pennyrile Electric President & CEO, Greg Grissom. “This doesn’t necessarily mean members will see an increase on their monthly bill. This adjustment is revenue neutral and will only shift charges from the rate per kWh to the fixed customer charge.” Simply stated, this adjustment will reflect little or no change to the average Pennyrile Electric member.
In summary, beginning October 1, Member-owners can expect to see a slight increase in their electric bills due to the TVA 1.5 % increase. Electric bills will also be realigned to reflect an increase to the customer charge, and a reduction in the cost per kilowatt hour. A similar scenario holds true for all rate classes. For complete details on Pennyrile Electric rates, go to www.precc.com.