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In October 2018 TVA implemented a Wholesale Rate Change which introduced a new rate component on the wholesale invoice known as the Grid Access Charge (GAC). The GAC is a fixed dollar amount based on a 5-year historical average of standard service kWh purchases from TVA. The purpose of the GAC was for TVA to start collecting some of their fixed costs through a fixed rate component rather than the traditional volumetric demand and energy rates. In addition to the GAC, TVA lowered their wholesale onpeak and offpeak energy rates to make the Rate Change revenue neutral.

Prior to the Wholesale Rate Change going into effect, TVA gave each Local Power Company (LPC) the option to implement the GAC in October 2018 or defer it until October 2019. For those LPCs who deferred until October 2019, a new rate election form will need to be completed and returned to TVA by April 2019. The rate election form will indicate to TVA how each LPC would like to adjust their respective retail rate structures in order to acknowledge the changes taking place at wholesale.

PCA has been working with our clients since last year to calculate and discuss the impact of the wholesale GAC to their respective systems. In addition, we look at potential retail rate designs to ensure each LPC is collecting the GAC appropriately. For those LPCs who deferred, PCA will continue to work with you and provide guidance on the options available for October 2019. We will also assist with finalizing the rate election form due to TVA in April 2019.

If your LPC is waiting for the perfect time to learn more about this change, now is a great time to contact Seth Daniels @ seth.daniels@pca-llc.biz to discuss it more in depth.