Just got word that TVA is filing a major rate case for 2013. They're projecting a 7.2% increase across all customer classes. The residential rate structure is getting completely overhauled - moving from a simple energy charge to a demand component for customers over 1000 kWh. Has anyone else heard rumblings about this? I've got about 40 clients in the TVA territory and this could be huge.
TVA Rate Case 2012 - Major Changes Coming
Terry, I'm seeing the same thing down here in Memphis. MLGW is already sending out notices to large customers about potential rate restructuring. The word is they're moving to a time-of-use structure for anyone over 500 kW demand. My industrial clients are freaking out because most of their usage is during peak hours. This could add $50,000+ annually to some of my larger accounts.
We're seeing similar patterns with FirstEnergy here in Ohio. They filed their rate case last month with a proposed 12% increase. The big change is they're eliminating the declining block structure for commercial accounts and moving to straight energy charges. For my manufacturing clients, this eliminates about $20,000 in savings they were getting under the old Schedule C-3 tariff.
Down in Texas, Oncor just announced they're implementing smart meters system-wide by 2014. The rate impact isn't huge - maybe 2-3% - but the real change is mandatory time-of-use billing for all commercial customers. No more opt-in programs. TXU and Reliant are already adjusting their contract rates to reflect the new meter charges. Anyone dealt with forced TOU conversion before?
Frank from Cleveland here. Jim, you're absolutely right about FirstEnergy. But here's what I'm seeing - they're also adding a new "grid modernization" surcharge of $4.50 per month for all commercial accounts. Doesn't sound like much, but for clients with multiple meters, it adds up fast. One hospital client of mine has 23 meters - that's over $1,200 annually in new fees alone.
The TVA filing came through today. It's worse than expected - 9.8% increase for Schedule GSA customers. They're also implementing a $25 monthly facilities charge for all general service accounts. The kicker is they're changing the power factor penalty from 90% to 95%. Most of my manufacturing clients are going to get hit hard on that change alone.
Terry, did you see the details on the new demand ratchet provisions? They're implementing a 12-month rolling average instead of the current seasonal reset. For customers with seasonal operations, this is going to be devastating. I've got a grain elevator that only runs heavy equipment during harvest season - this change could double their demand charges year-round.
Update: MLGW just posted their implementation timeline. New rates effective January 2013, with smart meter installations beginning in Q2. They're offering a 6-month transition period where customers can opt between old and new rate structures. Definitely recommend all TVA-served clients take advantage of this to minimize the impact.