November 30, 2020 Home
Every time we turn on a light or electrical appliance, we expect instant response. But, where does all this electrical power come from? The power lines that run to our homes and businesses are installed and maintained by Powell Valley Electric Cooperative (PVEC), with more than 31,000 member owners. PVEC purchases its power from the Tennessee Valley Authority (TVA), which serves electric utilities in parts of seven southern states.
Where does TVA get its power?
In its most recent year, TVA’s energy mix is about 40 percent nuclear, 20 percent natural gas, a little over 20 percent coal, 11-13 percent hydro, 3% solar and wind, and others. That compares with 30 percent nuclear, 60 percent coal, about 10% hydro, and little gas in 2005.
This change in the power mix took place over a period of less than 15 years. Comparing the figures for these two years, we see that coal has been reduced from 60% to 20%, nuclear has increased from 30% to 40%; natural gas has increased from below 1% to 20%; hydropower has increased a bit; solar and wind power has increased a bit.
Why does TVA (and other energy providers in the USA) change its power mix?
There may be several possible answers (including a commitment to protecting the environment), but the most important would be cost. Although TVA is a federal agency, it receives zero dollars in funding from the United States government. TVA gets almost all of its income from sales of energy to the utilities who purchase this power.
TVA has a responsibility to provide power as cheaply as possible to its consumers and customers – either directly (to large industries) or through rural electric cooperatives, municipal utilities, and other electric utilities For example, when operating a coal burning plant that requires regular retrofitting to meet clean air standards, the costs to TVA are increased. Likewise, if TVA can create the energy that it needs using natural gas rather than burning coal, the costs to TVA are decreased.
Why is this important to me, a member-owner of a cooperative?
It is important to you, to all of us who pay an electric bill. PVEC is legally obligated to purchase its power from TVA – regardless of cost. So, whatever expenses TVA can cut keeps TVA from increasing its costs to power providers – like PVEC. What PVEC charges its member-owners is directly related to the cost of power that PVEC pays TVA.
The primary charge on our electric bill is the amount of power used, as measured in kilowatt hours. Although PVEC has levels of billing cost (based on quantity of kilowatt hours used), whatever amount you use and pay for is determined by how much is used. So if you use 800 kilowatt hours in a month in your home, the difference between 10 cents and hour an 12 cents an hour, would be 2 cents an hour or $16 per month.
So, we can see that varying the fuel mix is essential to keep costs as low as possible for the utility distributor (PVEC) and the user (you and me).
STAY TUNED – next week will look at specific examples of what changes TVA has made to keep its rates as low as possible.
Everyone needs to learn more about our electric cooperative. For more information, go to pve.coop