By The Associated Press
KNOXVILLE, Tenn. — The Tennessee Valley Authority is boosting its wholesale power rate by 2.1 percent in May, in anticipation of increased summer demand.
The rate hike is expected to increase residential utility bills by between $1 and $3 a month.
The Knoxville News Sentinel reports TVA announced on Friday that it will raise its total monthly fuel cost from 2.163 cents per kilowatt-hour to 2.311 cents per kilowatt-hour for the billing period starting May 1. Local utilities served by TVA typically pass the expense on to their customers.
The utility also increased rates in April by 3 percent, adding an estimated $2 to $4 to average monthly residential power bills.
A statement from the utility says that a primary reason for the new increase is the higher costs for TVA that come with warmer temperatures. But weather is not the only factor that affects rates.
Moody’s Investors Services said this week that cost overruns at TVA’s Watts Bar Nuclear Plant in Spring City could lead to rate increases.
TVA announced earlier this month that it will ask its board of directors for an additional $1.5 billion to $2 billion to complete the Watts Bar Unit 2 reactor. TVA also said the reactor likely would not be completed until the end of 2015, three years later than expected.