The EPB Board approved a 4% electric rate increase which will be effective beginning with the October billings, pending TVA approval.
This is the first time in more than eight years EPB has sought a rate increase across any of its electric rate offerings.
“EPB has been able to avoid rate increases for years longer than expected, but inflationary pressures and other factors make it necessary to make this decision at this time,” said EPB President & CEO David Wade. “We remain focused on enhancing the reliability and resiliency of power for our customers, while keeping rates lower than many other places across the country.”
For residential customers who use a monthly average of 1,136 kWh of electric power, this adjustment will reflect an increase of about $5.00 on their monthly bills.
The last increase in EPB’s portion of the electric rate was in 2015, and it was only expected to remain at that level for three to five years. Many factors contribute to the necessity of this increase including:
- Inflation and economic conditions: Since EPB’s last rate increase in 2015, the Consumer Price Index has increased 26.5%, according to the U.S. Department of Labor Bureau of Labor Statistics, which reflects the increase in nearly all costs of doing business.
- Supply chain challenges and price increases: Key electric industry materials such as transformers, poles, conduit, wire and cable have seen price increases in excess of 100% in some cases. Common delays of one year or more over scheduled deliveries for these materials have also complicated budget planning.
- Unreimbursed storm recovery costs: EPB has spent a combined total of about $49 million in restoration costs from major storms over the last three years and only recently received $30 million in reimbursement for the 2020 Easter tornado.
- Expiration of Pandemic Recovery Credit: TVA’s Pandemic Recovery Credit is set to expire this September. Through this program, EPB has received a 2.5% wholesale power cost credit since October 2020. The loss of this credit contributes to the need for the rate increase.
The electric rate for EPB customers includes components to cover TVA’s cost for power generation and transmission to our community as well as components to cover the cost for EPB to deliver electricity to customers. In addition, TVA charges a fuel cost adjustment, which fluctuates monthly to cover the current market cost of natural gas, coal and other fuels used to generate power.