Big changes coming to electric bills on The Murfreesboro Post

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Big changes coming to electric bills

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By: MELINDA HUDGINS, mhudgins@murfreesboropost.com

Posted: Sunday, March 27, 2011 5:56 am

Big changes coming to electric bills | Business, Utilities, MED, MTEMC, TVA

All energy is not created equal; when in high demand and during peak times, energy costs more to produce. Likewise, during off-peak hours and in transition months, it costs less.

TVA announced that, beginning in April, it will change the way it charges distributors like Murfreesboro Electric Department and Middle Tennessee Electric Membership Corporation.

For this reason, distributors will be moving toward charging consumers on a different rate structure – one based on the time of day energy is used. MED aims to begin using this rate in October 2012.

“It’s important our customers understand that this rate change is revenue neutral for TVA,” Charlie Riggs, manager of customer accounting for MED, stated in letter issued to all MED customers.

“It will bring no additional money to TVA. Rather, it will link the price charged for electricity with the hourly and seasonal costs of generating power.”

In an effort to ease into the transition toward a true “time of use” rate structure, TVA’s rate change is a “nearly flat” model, the letter states.

“For example, where costs for the summer months are higher, TVA is lowering its prices a bit,” Riggs continued. “And where the costs for off-peak times are lower, TVA is raising them a bit.”

MTEMC president Frank Jennings stated in a news release that “The average member will see little difference between the total amount of their March and April bills.”

“The biggest changes, at this point, are really between TVA and the distributor. We are working to cause as little effect to our members as possible,” he said.

Most notably, the change will be seen in the “Customer Charge” component of the bill, which is a monthly fee that covers the electric cooperative’s fixed monthly costs. It will change from $9.79 to $13.75 a month. Similarly, MED will up its monthly base charge from $8.65 to $11.76, according to P.D. Mynatt, CFO and controller.

“This really is really the first step towards moving towards time of use charge,” he explained.

Right now, it is important for consumers to become aware of their usage.

“Consumers will basically start to understand what it costs to use energy,” TVA spokesman Mike Harris said.

He pointed out that over the past 65 years, the cost of energy has remained relatively low – increasing from about 2 cents per kilowatt hour to 9 cents – compared to the hike in gas prices from 16 cents to more than $3 a gallon.

As TVA produces electricity for some 4 million customers through 155 distributors, the bulk of the cost lies in serving that demand.

“Energy can’t be stored, so we have to generate electricity that the consumer wants and the consumer needs at that specific point in time,” Harris continued. “Basically that’s where the variable every month comes in – how much extra peak demand did you need that month.”

Tools are available at www.murfreesboroelectric.com, www.mtemc.com and www.energyright.com for consumers to learn how to better conserve energy.

Tagged under Business, MED, MTEMC, TVA, Utilities

Member Opinions:

By: abide on 3/28/11
GET READY TO GET ROBBED AT THE ELECTRIC METER AS WELL AS THE GAS PUMP!

By: SocEtTuem on 3/28/11
Sounds exactly like what it is, another scam to hose the public on energy prices.

By: Sprtman on 3/28/11
The TVA and your local electric companies are ripping people off and have been for years.

By: publius on 3/30/11
Sprtman how about we cut their taxes some, isn't that that you always say to solve the problems we have??