Sarah Gilliam, SACE’s Communications Coordinator, contributed to this blog post.
What is a fixed charge?
Think of a fixed charge as a mandatory fee. A fixed charge added to your total utility bill that is the same amount each month. This mandatory fee is not affected by the amount of energy you actually consume each month. That means that even if you don’t use very much energy in your own home, you will be charged this mandatory fee no matter what. Utilities use these mandatory fees as a way to ensure that it earns enough money to recover costs and generate a reasonable revenue.
How could these mandatory fees affect me?
Whether you flip the switch or conserve energy, you will pay a fixed charge. However big industrial consumers will get a lower rate for using more electricity. The more they use, the less they pay! This is democracy at its worst and discriminates against low-income people.
Residential customers get their power from a local power company – e.g. Memphis Light, Gas and Water, Nashville Electric Company, Huntsville Utilities, etc. Whatever price TVA charges your local power company for electricity, including any fixed charges, get passed on to you via your local power company. As a federal public power provider, TVA is tasked with setting electric rates and providing power at the lowest possible cost.
Historically, TVA did a good job of fulfilling its primary mandate, providing low cost power to residential customers, while also keeping rates competitive for large industrial customers in order to continue to attract these large employers to the Valley. Recently, however, TVA is operating more and more like an investor owned utility – continually reducing rates for large industrial customers while raising rates for residential customers. If TVA actually added fixed charges into its rate setting structure, residents will bear the brunt of that added economic burden. In a region of the country where thousands of families struggle to pay utility bills – where every penny is saved in order to lift communities out of poverty – why would a public power provider make it harder for its customers to save money?
What can I do about it?
Please unite with us against TVA’s secretive attempts to increase mandatory fees automatically charged to electric customers throughout the Tennessee Valley. Tennesseans demand more sunlight in both the rate-making process and in our energy mix! Nix the Fix, TVA! Stop making unfair decisions behind closed doors! SIGN PETITION TODAY!
Use the power of social media to inform your neighbors about this sneaky attempt to raise your monthly bills. Share our video and petition on Facebook!
You are also encouraged to attend TVA board meetings and listening sessions, like the one coming up on Nov 29th in Knoxville, and reach out to your elected officials when unfair, sneaky decisions like these are made. Don’t let the voice of the big industrial customers be the only ones in these decision makers’ ears!
Want to learn more?
Listen to Dr. Stephen Smith, Executive Director of the Southern Alliance for Clean Energy, analyze TVA’s Monopoly Rate Structure. Key aspects of this clear and present danger are discussed 23 minutes into the presentation.