The Greeneville Sun
Current Weather
Mostly Cloudy Mostly Cloudy
48 °
Click Icon for Extended Forecast
Get Breaking News Alerts
FREE Service of
Brad & Ginia Johnston
423-823-0414 | 423-823-0716
Get special offers
from GreenevilleSun.com.
 
Hats In The Ring
Candidates Showcase


Patty Tilson
Greene Co. Clerk




Nathan Holt
Greene Co. Trustee




Brett Purgason
Greene Co. Mayor




Robin Quillen
3rd Dist. County Commissioner




David Crum
Greene Co. Mayor




Ted Hensley
5th Dist. State Representative




David Weems
Road Superintendent




Jan Kiker
Greene Co. Clerk




Christina Blevins
Register of Deeds




Tom Hopson
Greene Co. Trustee




Kevin Swatsell
Road Superintendent




Danny Greene
Sheriff




Cecil Mills
District Attorney General



 
 
2002 Ford F150 King

1928 Ford Model A Door

1970 Nova 1 Owner 56k

1997 Honda Valkyrie

1997 Harley Davidson Ultra

2004 Jeep Wrangler (sahara

Get featured here and increase your advertising results by upgrading your classified ad to a TopAd.

Call: 423-638-4185

Get featured here and increase your advertising results by upgrading your classified ad to a TopAd.

Call: 423-638-4185




Public Notices

April 24, 2014

choose text size bigger text smaller text

GL&PS Likely To Change Rates Next Fall
To Correct Losses

Originally published: 2013-12-24 10:48:13
Last modified: 2013-12-24 10:51:03
 


BY SARAH R. GREGORY

STAFF WRITER

Changes to the Greeneville Light & Power System's (GL&PS) rate structure could be coming in 2014 as the utility looks to put an end to operating losses related to demand charges paid to the Tennessee Valley Authority (TVA).

GL&PS General Manager Bill Carroll told the utility's Board of Directors Monday that the utility is financially sound with strong reserve funds and that the losses had been projected.

"There's no cause for alarm really," Carroll said, adding that GL&PS expenses have been "in line" and that the utility has been able to absorb the losses so far, instead of passing the cost along to its customers.

"We're financially very solid," he said. "We've got the money to float this right now."

However, members of the Board of Directors agreed informally during discussion at the meeting, GL&PS cannot afford to lose money forever.

Directors took no action on a possible rate change Monday, and did not discuss the matter in-depth.

In 2011, TVA changed its rate-structure -- the wholesale rate it charges utilities such as GL&PS for power. TVA began increasing charges based on certain peak energy-use periods of the year, like winter and summer. TVA said at the time its goal was to encourage energy efficiency and decrease power use at peak times of the day and year. That rate change has increased GL&PS's overall costs.

The topic was brought up as part of a regular monthly report regarding the prior month's financial statements.

For November, GL&PS Controller Paige Mengel reported total operating revenue of $7,540,296.

On the operating expense side, power purchased from TVA totaled $6,552,415, leaving a gross positive margin of $987,881.

In addition, operating expenses and maintenance expenses for the month totaled $1,476,490.

The combination of the cost of TVA power purchases, operating expenses and maintenance expenses brought total expenses for November to a total of $8,028,905.

That expense total left operating income at a net loss of $488,608, an amount which had to be absorbed by the utility from its reserves.

The problem GL&PS is experiencing with its current rate structure, Carroll explained, is that the utility is not bringing in enough revenue from power sales to fully recover the "demand charges" paid to TVA.

Like many other utility companies in the Tennessee Valley region, GL&PS buys electricity at wholesale rates from TVA and re-sells it to GL&PS customers at retail rates.

Also included in costs paid by GL&PS to TVA is what is called a "demand charge" that takes into account TVA's being able to provide enough electricity to the local utility not only for its periods of normal demand but also for the utility's periods of peak demand.

For example, last month, the greatest period of customer demand for electricity from GL&PS came during the 7 a.m. hour on Nov. 15. Carroll noted that that time of peak demand came on a morning following a particularly cold night.

The amount of power the utility "demanded" from TVA during that particular hour is figured into the calculation of how much the local provider must pay TVA to buy electric power.

Demand for GL&PS service peaks in the winter months, Carroll said, noting that the utility's sales are driven primarily by weather.

"We knew this [operating loss] was going to happen [when we changed the rate format]. We just didn't know when or to what extent," Carroll said.

"Our retail rates are not designed to appropriately cover our wholesale costs right now," he added.

In the coming months, directors will be asked to act on new rates to be put in place before next winter.

"We do have plans to recommend retail rates that match the current wholesale format. We hope to do that next October," he said.

 
For more information and stories, see The Greeneville Sun.

More Local News


Newspapers In Education Benchmarks
Newspapers In Education
Newspapers In Education
Benchmarks
Benchmarks

Find more businesses on GreenevilleMarketplace.com

Attorneys · Automotive · Health Care · Restaurants Retail · Services · Home & Garden · Recreation


PHOTO GALLERIES
Sponsored in part by:
 
RECENT GALLERIES



 

Terms of Use - Privacy Policy
Copyright © 2014, GREENEVILLE PUBLISHING COMPANY, Inc. All Rights Reserved.
This content may not be reused without the express written permission of Greeneville Publishing Company, Inc.
http://www.greenevillesun.com