Alcoa eyes fall electric rate adjustment

Local electric customers could see small increases in their base rate this fall. With a rate hike from the Tennessee Valley Authority last year and the possibility of another in the coming months, electric employees across the county are analyzing their processes and budgets.

Ryan Trentham, director of the Alcoa Electric Department, said Alcoa customers will likely see a minor adjustment to their base rate in October. Greg McClain, city manager for Maryville, said Maryville is still analyzing its electric system, but any local adjustment made would be in January of 2025.

Although a potential TVA rate adjustment would affect all 153 local power providers the authority serves, a representative told The Daily Times that additional adjustments, although mentioned as a possibility last year, are impossible to know until the board of directors meets in August.

OptionsIt’s hard to put a number on the actual change coming to Alcoa customers because it’s still early in the process, said Trentham, but numbers mentioned during an Alcoa budget workshop last month hovered around 1%. That could vary depending on a lot of factors.

Local electric prices usually change through two processes. The first, Trentham said, is when TVA adjusts its base rate, like when the authority’s board of directors approved a 4.5% increase last August. Those prices are usually passed through to the customer as local rate hikes, but regional electric departments don’t pocket the change.

The second is when adjustments happen at the local level. Like many others in the area, the Alcoa Electric Department isn’t run for profit, which helps it keep rates low compared to its for-profit electric competitors. But sometimes Trentham said, costs have to go up to keep offering the same quality of service.

“We look at things like inflation rates and we look at projects to keep our infrastructure at a level that we can provide the capacity and power to the growth our area is seeing,” Trentham said in a phone interview. “Our area is seeing a lot of growth.”

While Alcoa Electric, which serves about half of Blount County, tries to run what Trentham called a “lean operation,” it’s also under regulations from TVA that require financial stability. The department employs consultants to analyze its short and long-term needs. Sometimes, that means raising rates.

Alcoa prefers more regular, incremental adjustments over infrequent hikes so customers can adjust gradually. That’s the kind of change coming this fall, Trentham said.

Neighbors

In Maryville, McClain, who has a background in electric departments, said the city is still analyzing data to determine the best action for the coming fiscal year. It’s hard to say what might happen now, but staff prefer to have rate adjustments authorized in January instead of bundling it with TVA’s October change window.

“You can get your local increase at the same time as TVA and roll it in like that, but we like to keep it all out where we’re just discussing our stuff,” said McClain.

Maryville as well, he said, works to keep its electric department as efficient as possible while adhering to quality standards.

If TVA were to approve an additional rate change of its own this year, that would likely take effect for Maryville customers in October, he said. That process makes it clear to subscribers what’s a TVA change and what’s a Maryville change.