UPDATE: TVA hikes rate 8 percent, cuts fuel charge

KNOXVILLE, Tenn. — The Tennessee Valley Authority board has voted to raise the basic power rate eight percent on Oct. 1.

The increase in the basic rate will add $5.52 monthly to the average household’s bill.

Officials, however, expect to cut the fuel adjustment charge for October, resulting in a savings of nearly $2 for the average residential bill — a reduction from $66.61 to $64.77.

The nation’s largest public utility said the rate hike was necessary to fund a $3 billion liability that includes bolstering the pension plan, paying for the cleanup of a massive coal ash spill at the Kingston Fossil Plant in East Tennessee and funding capital projects.

Under a new policy, TVA is adjusting the fuel surcharge monthly instead of quarterly.

Duncan Mansfield/The Associated Press