Skip to content

Virginia distributor rejoins TVA system

Virginia distributor rejoins TVA system

By: The Associated Press

The Messenger 01.07.08

CHATTANOOGA (AP) — A decade after dropping the Tennessee Valley Authority in search of cheaper electricity, Bristol Virginia Utilities has rejoined the TVA system.
With the start of the new year, the 16,000-customer distributor became the 159th municipal supplier or electric cooperative to hook up with TVA, the nation’s largest public utility.
Bristol had been buying its power from American Electric Power Co., one of the nation’s biggest investor-owned utilities.
“The market has changed dramatically from what it was in the 1990s,” said Sandy Crusenberry, director of marketing and business development for the Bristol utility. “We wanted a longer-lasting contract, and TVA made the best overall offer.”
Bristol becomes the only distributor of TVA power based in Virginia and the first distributor to leave and later rejoin TVA in the 75-year history of the Knoxville-based federal utility.
In 1998, Cynergy Corp. offered Bristol Virginia Utilities a less-expensive contract to supply its power, allowing BVU to cut its rates below what TVA charged.
But as energy markets tightened and fuel prices jumped, electricity costs in the deregulated wholesale market have risen. The Cynergy contract ended three years ago, and a new wholesale power contract from American Electric Power was priced 81 percent higher for BVU.
TVA rates under the new 20-year contract will be higher than what AEP charged, at least initially, but Bristol’s consultants project that TVA-generated power will be cheaper over the long run, even with an anticipated TVA rate increase in 2008.
To adjust to TVA, Bristol raised its customers’ rates about 8 percent in July and will raise them another 8 percent in May. Plus, Bristol paid TVA $536,000 to build two new electric transmission lines to serve the city and paid a contractor $360,000 to remove an older line.
In late 2006, TVA offered six other distributors planning to leave TVA a chance to rescind their cancellation notices at no additional cost. Three accepted — Shelbyville, Glasgow, Ky., and Bowling Green, Ky.
The other three, all on the edge of TVA’s service area in Kentucky, are still planning to go. They are 22,000-customer Paducah (Ky.) Power System in 2009, nearly 4,000-customer Princeton (Ky.) Electric Plant Board in 2010 and 3,500-customer Monticello (Ky.) Electric Plant Board in 2008.
TVA provides electricity directly to several dozen major industrial customers and through the 159 distributors to some 8.7 million consumers in Tennessee, Mississippi, Alabama, Kentucky, Georgia, North Carolina and Virginia.
Information from: Chattanooga Times Free Press,

, ,