TVA may break out surcharge for cost of pollution cleanup

TVA may break out surcharge for cost of pollution cleanup
July 10, 2003
CHATTANOOGA, Tenn.- In a concession to distributors, the Tennessee Valley Authority may
begin listing the cost of cleaning up pollution from its coal plants as a separate charge on electric
bills.
The TVA board is set to vote on the proposal Aug. 27 in Knoxville: It calls for 7.4 percent rate
increases for residential and most industrial customers, while lowering the electric bills of some of
TVA's largest industrial customers by 2 percent.
TVA officials had wanted the cost of pollution cleanup at its 59 coal plants to be absorbed into a
general rate increase. Distributors balked at that, instead suggesting the separate charge. The
TVA would have to account for how the money is spent, and the charge would disappear in 10
years.
TVA staffers are recommending the plan to board members.
"An environmental surcharge this time will help ensure that this is where the money is spent, and
after 10 years this will go away," said Dick Crawford, president of the Tennessee Valley Public
Power Association, which represents the interests of utilities served by TVA.
The TVPPA would prefer all rates to be raised by 5.2 percent, instead of favoring large industrial
customers. Either plan would raise $365 million for pollution control, but the one favored by the
TVA shifts $90 million of the expense away from major industrial customers.
Mark Medford of the TVA said the break for big business is fair, because TVA industrial rates
average 12 percent more than nearby utilities, while residential rates run 11 percent below.
The 2 percent decrease would help the larger companies in "being competitive and keeping people
at work, so these men and women in turn can keep food on the table and a roof above their
family's heads," said Edward Bredniak, president of CC Metals & Alloys in Calvert City, Ky.
Since many major manufacturers are based out of the area, the better way to boost the economy
in the Tennessee Valley would be to keep more money there, said Stephen Smith of the Southern
Alliance for Clean Energy.
"Industry should also pay more because they are the biggest beneficiaries of a cleaner
environment," Smith said. "If TVA reduces its emissions, that lessens the likelihood these
industries will be in an area of noncompliance (for clean air) and forced to make more costly
(pollution) upgrades."
Any change in the TVA rate structure would go into effect on Oct. 1.