Guys, I'm working on a manufacturing client here in Knoxville and their TVA bill has this fuel cost adjustment that jumped $8,200 in one month. They're on GSA-1 schedule and the FCA went from $0.02847 to $0.03891 per kWh. TVA claims it's all legitimate coal price increases but that's a 36% spike in one billing period. Has anyone else seen crazy swings like this with TVA lately? Client is freaking out and honestly I'm not sure if this is kosher or if we need to dig deeper.
TVA fuel adjustment has me scratching my head
Terry, I deal with Georgia Power down here in Atlanta and we've been seeing similar volatility with their fuel riders. Not quite 36% but definitely some big jumps. The key thing to check is whether they're following their published fuel adjustment methodology. TVA should have filed their FCA calculation with FERC - you can request the backup documentation showing exactly how they derived that rate. Don't just take their word for coal price increases.
I've audited several TVA accounts and their fuel adjustments can definitely be volatile. The thing is TVA buys coal on long-term contracts but also has spot purchases that can swing wildly. What you want to look at is the monthly fuel cost recovery filing - they break down the actual vs projected fuel costs. If actual exceeds projected by more than a certain threshold, they can do these big adjustments. Still seems high though.
$8,200 jump is no joke. I'd definitely request the fuel cost calculation workpapers from TVA. They have to provide them under federal transparency rules. Also check if your client's usage pattern changed - sometimes a shift in demand coincides with a rate change and makes the impact look worse than it actually is. But yeah, 36% is eyebrow-raising.
Good points everyone. I pulled three months of bills and usage was actually down 12% so it's definitely all in the rate. Frank, how do I go about requesting those workpapers from TVA? Do I need to file some kind of formal information request?
You can start with a simple written request to their customer service department citing FERC Order 888 transparency requirements. If they stonewall you, then you escalate to a formal FOIA request. Usually they'll cooperate rather than deal with the paperwork hassle.
Terry - following up on this, did you ever get those workpapers? I've got a Louisville G&E client asking similar questions about their fuel adjustment clause. Wondering if there's some regional trend happening with coal costs.