The Tennessee Valley Authority’s retail electric base rate increase of 1.5 percent went into effect Tuesday, the start of TVA’s fiscal year.

Memphis Light, Gas and Water Division, TVA’s largest customer, must pass on TVA’s retail electric base rate increase to its customers; this equates to a $1.59 increase in the monthly bill of the average residential customer who uses 1,000 KwH per month.

TVA’s retail electric base rate increase is related to TVA’s base power cost that excludes fuel cost for generation and the cost of power purchased for resale to customers. Fuel and purchased power costs fluctuate monthly and are recovered by the Fuel Cost Adjustor (FCA). MLGW’s adder—the third component of our retail electric rates—covers all of MLGW's operating costs of the electric division, except for purchased power from TVA; the rate on MLGW’s adder has not increased since 2004.

MLGW is the largest three-service public power utility in the nation, serving more than 420,000 customers in Memphis and Shelby County.