EMC rate decrease

In late June the Tennessee Valley Authority (TVA) announced its plans to reduce wholesale power rates to distributors by 3.5 percent to 5.0 percent in a continuing effort to control costs and maintain competitiveness. This plan was ratified by the TVA Board in its July 28, 2006 meeting in Knoxville, TN. The rate reductions will take effect beginning with meter readings on or after October 1, 2006. Along with this action, the TVABoard also authorized a quarterly fuel cost adjustment mechanism that allows TVAto automatically adjust rates up or down as fuel and purchased power costs rise and fall. As with the rate reduction action, the fuel cost adjustment mechanism is also effective October 1, 2006.

In response to TVA's rate reduction and fuel cost adjustment actions, the Board of Directors of Blue Ridge Mountain EMC has announced that it will pass through to its membership 100 percent of the reduction in rates authorized by TVA, as well as any quarterly adjustments that result from the new fuel cost adjustment mechanism. BRMEMC General Manager, Joe Satterfield, said that he believes the new fuel cost adjustment system should better allow TVA to adapt to price changes in the fuel market without having to make major changes to the customer rate structure. "In the long run, this should prove to work better for BRMEMC's member-customers." This is not the first time that a fuel cost adjustment mechanism has been utilized by TVA. In the 1970's when fuel shortages were common, TVA implemented a similar policy to better insulate itself from the cost volatility of fuel used in generating electricity. "The good news is that this time we have gotten a rate reduction at the same time as the FCA implementation," Satterfield noted.

Satterfield concluded by providing an example of the savings that customers will see. "While this reduction will be shared among all rate-payers in the BRMEMC system, a residential customer with an average usage of 1,000 kwh per month will realize an actual savings of about $3.00 per month. While this is not a huge reduction, every little bit helps," Satterfield concluded.

Blue Ridge Mountain Electric Membership Corporation is a member-owned electric cooperative headquartered in Young Harris, Georgia, serving over 46,000 member-customers in Cherokee and Clay Counties in Western North Carolina, and Towns, Union and Fannin Counties in Northeast Georgia.