Convening in a special-called board meeting on Tuesday, February 9, TVPPA’s board of directors cast a unanimous vote in favor of changes to TVA’s Real Time Energy rate. Last month, TVA brought the rate change proposal before TVPPA’s Rates & Pricing Committee, which recommended the TVPPA board of directors endorse the proposed change. The rate change will go before TVA’s board of directors on Thursday, February 11, for final approval.
TVA’s Real Time Energy (RTE) rate was first created to address certain unique competitive challenges for local power companies (LPCs) serving in Georgia. The enduring competitive challenge is one posed by the Georgia Territorial Electric Service Act (GTESA), which allows any new businesses in the state with connected loads of 900 kilowatts of greater a one-time choice of electric suppliers. That means any electricity provider serving in the state can compete against TVA-served LPCs for commercial and industrial load. Georgia is the only state in the Tennessee Valley that has established competition among electricity suppliers for commercial and industrial business regardless of where the provider or business is located in the state.
GTESA, which governs retail electric service, has been on the books since 1973. The competitive challenges it creates forced TVA in 2003 to establish a RTE rate that would allow its customers serving northern portions of the state – Blue Ridge Mountain EMC, Chattanooga EPB, Chickamauga ES, North Georgia EMC and Tri-State EMC – to competitively bid against other providers. The rate enables a portion of a customer’s load to be served at a price based on TVA’s real time power cost. As originally structured, the rate could be applied to new loads at greenfield sites only.
In 2016, based on an increasingly competitive environment in Georgia, TVPPA’s Rates & Pricing Committee recommended and TVPPA board of directors endorsed two changes to the RTE rate that were later approved by the TVA Board. Under the revised structure, the rate could be applied to brownfield sites and expansions of existing customer load.
North Georgia EMC, which is the only LPC currently using the RTE rate, serves considerable commercial and industrial load and continues to face intense competitive pressure from Georgia Power and other Georgia-based electric utilities. The Atlanta-based investor-owned utility has flexibility in creating rates and is investing in transmission lines that span North Georgia EMC’s service territory.
On Thursday, TVA’s Board will consider RTE rate revisions that will further enhance the ability of North Georgia EMC and other LPCs to compete for manufacturing customers. As drafted, the rate has a 5-year availability guarantee to LPCs serving in Georgia provided they maintain an ongoing wholesale power contract with TVA.