Huge TVA Electric Rate Increase Takes Effect Wednesday

[Purveyor]

(09-30) 13:21 PDT Knoxville, Tenn. (AP) --

The Tennessee Valley Authority's largest electric rate increase in more than three decades takes effect Wednesday as thousands of consumers already are struggling to pay their power bills and avoid service cutoffs.

A 20 percent rate hike from the nation's largest public utility is expected to add $15.80 to $19.80 a month to the average residential bill. It's TVA's biggest rate boost since 1974 and its second this year.

The hike takes effect in a week of alarming financial news, with the biggest one-day point drop in Wall Street history and the failure of a federal bailout plan that President Bush pitched as essential to steady the struggling economy.

Consumers are worried about how they'll pay the higher bills when other basics such as gas and groceries are costing more, too. Homeowner John Brummett, who works in Nashville's public schools, said his bill has been steadily increasing this year already, and he's worried about another hike with "everything else going up as well."

"I put in new windows and sealed everything. It helped a little but not much," said Brummett, 38. "I've done about all I can do."

Nearly all of TVA's 159 distributors in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia are expected to pass the higher rates on to their customers — factories, businesses and some 8.8 million residents.

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AP: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2008/09/30/national/a132135D85.DTL