Car financing

TVA offers a $200 million customer credit to relieve COVID-19

This story was updated at 8:45 p.m. on Thursday, August 27, 2020, with more information.

For the second year in a row, the Tennessee Valley Authority is reducing the price of its electricity through rebates or credits to its customers after reducing its own debt and spending.

The federal utility said Thursday it will provide a special coronavirus pandemic relief credit of $200 million next year, equal to a 2.5% reduction on its base electricity rates. One year ago, VAT announced its intention to try to keep its electricity rates stable for the next decade and offered a 3.1% rebate to local power companies that signed long-term contracts with the utility.

TVA Chairman Jeff Lyash said Thursday that the credit aims to help communities and businesses recover more quickly from the current crisis. COVID-19[female[feminine pandemic and reflects TVA’s improved performance.

“The continued impact of this pandemic on our communities is unprecedented and creates continued economic uncertainty,” Lyash said. “The TVA team has just done a great job of constantly looking for ways to reduce costs and improve reliability, and they are poised to deliver a year of outstanding performance in fiscal year 2020 despite the challenges presented. by COVID-19[female[feminine.”

The virus forced costly changes to how TVA fueled its nuclear reactors and recovered from storm damage and is expected to cut the agency’s power sales this year by $300 million or more and limit sales again in the coming year.

But Lyash said TVA decided to offer the $200 million credit to distributors, in addition to providing ongoing support for its community assistance program and a special return-to-business credit, due to its better results. than expected this year and its long term. partnerships with most municipalities and electric cooperatives that distribute electricity in the TVA seven-state area.

With lower borrowing costs and debt reducing interest charges and more rainfall this year spurring cheaper hydroelectric generation, TVA has been able to deliver electricity at lower prices than there were. is ten years old while maintaining sufficient reserves to provide the additional credit, Lyash said. Over the past six years, TVA has cut annual operating expenses by more than $800 million through cuts to staff, programs and technology, he said.

TVA reported net income of $652 million in the first nine months of the fiscal year while paying down debt to the lowest level in 30 years, TVA chief financial officer John Thomas said.

The credit for the coming year has been welcomed by local power companies, who will determine how the rebates will be spent to lower prices, offset higher expenses or extend utility cut-off moratoriums passed by the government. most utilities this spring during the worst of the pandemic. slow-down.

Doug Peters, president of the Tennessee Valley Public Power Association — which represents TVA’s 154 distributors — welcomed the TVA credit and flexible regulations on how the money will be spent.

“We commend TVA’s leadership for easing the financial strain this pandemic has placed on TVPPA members by supporting them with the Pandemic Relief Credit,” he said. “We further commend TVA for entrusting the decision-making regarding the use of these funds to local power companies so that they can make decisions based on their unique knowledge of the needs of their business and community. .”

In Chattanooga, EPB used its refund last year to begin pursuing construction of a battery storage or solar farm on the northern edge of its service territory. EPB Chairman David Wade said the new VAT credit underscores the value of America’s largest public service.

“Actions like these set TVA and the public energy model apart by demonstrating a clear and responsive commitment to join local power distributors in putting people and communities first,” Wade said.

The EPB has suspended power cuts for non-payment and waived its late fees since March due to financial hardship caused by the pandemic. EPB matched donations from TVA to also support local efforts to help those injured or threatened with eviction from their homes due to the economic downturn.

“Throughout this time, we have worked with nonprofit and public partners to identify sources of assistance, including special programs that have been put in place to help people cope with the COVID-19 crisis. COVID,” EPB Vice President J. Ed. dit Marston said. “We have also partnered with Centraide and engaged TVA in a campaign to support the United Way Restore Hope fund to provide financial assistance to those impacted by the COVID crisis, many of whom had never asked for help before.

While EPB has suspended power cuts, other TVA distributors have or soon plan to reinstate power cuts for those who do not pay their electricity bills.

A coalition of environmental groups wants TVA to act as a regulator of local distributors to suspend any customer cuts. In a petition delivered to TVA this month, dozens of climate justice organizations called on the agency to impose a moratorium on power cuts in the region and fund debt relief for its clients.

“Faced with a health, environmental and economic crisis unprecedented since the Great Depression, we are asking TVA to return to its original mission of improving the quality of life here in the Tennessee Valley,” said Brianna Knisley, coordinator of the Tennessee campaign. with the voices of Appalachia. “TVA can and should protect vulnerable communities from power outages.”

The petition urges TVA to reallocate its resources to help customers pay their bills and fund a fair economic recovery through clean energy and energy efficiency programs.

“In the midst of a pandemic, when people are unemployed and without basic needs like electricity, food, water and broadband services, TVA has a responsibility to support its customers by establishing a moratorium on closures service provider, confirming its original mission to serve the people of the Tennessee Valley,” said Isabella Killius of Sunrise Tennessee.

Lyash said local power companies, which are governed by locally elected or appointed trustees who are closest to each community and its needs, should have the flexibility to determine how best to spend the $200 million credit. dollars.

In addition to the pandemic relief credit, TVA is making another contribution of $2 million to the Community Relief Fund set up in April. Similar to the initial contribution, these funds will be matched by local power companies and other community groups for the benefit of local organizations that help families and businesses most in need. Earlier this year, similar matching funds eventually provided more than $4.5 million to nearly 300 groups in the region, TVA Vice President Buddy Eller said.

Contact Dave Flessner at [email protected] or 423-757-6340.

Tags : debt relieflong term
John Smith

The author John Smith