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TVA Electric Rate Increase Largest in 34 Years

Dave Flessner, Chattanooga News Free Press
TVA electricity rates will jump another 20 percent in October, a move Tennessee Valley Authority officials say is necessary to absorb more than $2 billion of increased costs for coal, natural gas and purchased power in the next year.

TVA directors approved a $12.6 billion budget Wednesday that includes its biggest single-rate increase in more than three decades, reflecting both a fuel-cost adjustment and an increase in TVA’s base rates.

The Oct. 1 rate increase will cost the typical residential electricity user from $15 to $20 extra each month, according to TVA and EPB estimates. Combined with other TVA rate increases this spring and summer, power rates will be up this fall by nearly 35 percent from a year ago and make this fall’s monthly power bills about $25 to $30 more expensive than they were a year ago.

“I don’t like this at all,” TVA President Tom Kilgore said. “The fact is we have to pay our fuel bill, and that’s what is causing all of this increase.”

TVA is suffering from a 3-year-old drought that has dried up more than half of its hydroelectric generation – its cheapest power source – and from soaring coal prices that have more than doubled in the past year. Natural gas and purchased power costs also are up by more than 60 percent this year, Mr. Kilgore said.
(21 August 2008)
Bill Brooks writes:
TVA’s largest rate jumps in the past were associated with their nuclear power program. More than 9 million residential and business customers in 7 states are served by TVA’s 158 distributors.

TVA continues has launched an aggressive nuclear program despite blaming part of the increase on insufficient water flow for hydropower, and last year had to curtail some nuclear plants due to inadequate cooling water.

Energy-rich Gulf faces power shortage of unprecedented proportions

Tom Arnold, Arabian Business
The energy-rich Gulf faces a power shortage of unprecedented proportions, as rapid growth in consumption has left producers unable to keep up with demand.

When proposals for a large retail development in Ajman were scrapped earlier this summer, property consultant Ritu Chopra was left counting the heavy cost of cancellation.

The manager of retail leasing at Colliers International was forced to break the bad news to developer clients – that the new project could not be hooked up to the emirate’s power grid due to insufficient capacity.

The aborted Ajman project cost Chopra’s firm months of lost revenue, and she is now worried that other schemes she works on in the future may be wrecked by power shortages.

“I have already heard of other projects that have been put on hold because of this problem,” she says. “Power shortages could become a real issue, and it’s something we are getting more and more concerned about.”…
(17 August 2008)

Demand for water and electricity to grow remarkably in Abu Dhabi

Emirates News Agency, WAM via UAE Interact
Demand for water in the emirate of Abu Dhabi will grow by 43pc in the next five years, while the demand for electricity will almost double in this period, according to projections made by the Abu Dhabi Water and Electricity Authority (ADWEA). In the absence of adequate resources of ground water or flowing rivers, the emirate depends largely on desalination of the sea water for sanitation. Desalinated water constitutes the major source for drinking water, agricultural and industrial needs.

ADWEA has evolved a five-year strategy to produce 969 million gallons of water per day, virtually doubling the present capacity of a number of desalination plants scattered across the emirate.
(24 August 2008)

Running dry

The Economist
Everyone knows industry needs oil. Now people are worrying about water, too

“WATER is the oil of the 21st century,” declares Andrew Liveris, the chief executive of Dow, a chemical company. Like oil, water is a critical lubricant of the global economy. And as with oil, supplies of water-at least, the clean, easily accessible sort-are coming under enormous strain because of the growing global population and an emerging middle-class in Asia that hankers for the water-intensive life enjoyed by people in the West.

Oil prices have fallen from their recent peaks, but concerns about the availability of freshwater show no sign of abating. Goldman Sachs, an investment bank, estimates that global water consumption is doubling every 20 years, which it calls an “unsustainable” rate of growth. Water, unlike oil, has no substitute. Climate change is altering the patterns of freshwater availability in complex ways that can lead to more frequent and severe droughts.

Untrammelled industrialisation, particularly in poor countries, is contaminating rivers and aquifers. America’s generous subsidies for biofuel have increased the harvest of water-intensive crops that are now used for energy as well as food. And heavy subsidies for water in most parts of the world mean it is often grossly underpriced-and hence squandered.
(21 August 2008)