Residents shocked by utility bills

Vickie Smith, right, takes a power bill payment from Kenny Landtroop. Like many other DREMC customers, Landtroop was surprised and unhappy with his increased bill. (T-G Photo by Mary Reeves) [Click to enlarge] [Order this photo]

Everyone gets a little bit of sticker shock after the holidays. Credit card bills, grocery bills, travel expenses -- all take big hits from November to December.

But many people in Bedford County got an additional shock when their electric bills showed up -- anywhere from $40 to $200 higher than normal.

"I think it stinks," said Kenny Landtroop, dropping his payment off at the Duck River Electric Membership Cooperative office. "I've never seen it so high. The people I work with, they've never seen it so high. It's ridiculous."

"I know it was colder and we had some Christmas lights, but I wasn't expecting anything like that," said Crystal Crowder of Wartrace. "How could I have used that much electricity?"

Crowder had been watching her bill closely for the last year and a half, ever since a mysterious "Fuel Cost Adjustment" fee began showing up.

"In April 2007, I noticed a $4 or $5 fuel charge on my bill," she said.

That soon crept to about $11, and on this last bill, it was $45.

Crowder said she was told by someone at Duck River Electric Membership Cooperative that the FCA was tied in with the rising costs for gasoline, to help pay for the utility workers' fuel as they drove around to read meters. Charles McDonald, DREMC's director of member services, said that is not true.

"It's a misconception," he said. "People equate the fuel cost adjustment to the price of gas and diesel. Really, what that represents is coal and natural gas."

According to McDonald, 55 percent of the fuel TVA uses to generate electricity is coal, which has seen skyrocketing prices in the past few years. Another major source of fuel for TVA is natural gas, which has also had major increases.

The FCA also helps cover the costs of TVA purchasing energy from other sources, something it has had to do more often since the three-year drought conditions have decreased the hydroelectric generation by about 50 percent, according to the TVA web site.

More power

But the FCA isn't all that seems to be bothering the DREMC customers. Some question the accuracy of the meters themselves.

"We got the electric bill -- it was $450. It's never been that high," said Anita Epperson. "The highest it's ever been is maybe $230, $250."

She said the kilowatt hours her bill claimed they used seemed too high.

"We use a wood stove, there's just the two of using the house and we keep the thermostat at 68 degrees. We didn't do anything different this month than we did the month before," Epperson said. "We asked them if they would come out and check the meter and they said they already did."

Epperson said she was told several unusually high bills were being examined by the utility service because they had received so many complaints.

Even discounting the $88 FCA on her bill, she said, the charges seemed too high.

"It's almost doubled," she said.

"Usage went up 55 percent in December," said McDonald. "That, on top of the 20 percent increase in energy costs -- that's why the bills are so enormously high."

That 20 percent increase (an average of $12-15 per 1,000 kilowatt hours) was enacted by TVA in August, its highest rate hike in about 30 years, but it also followed a 7 percent increase in April ($4 to $7). In all, according to a recent report from the Associated Press, TVA customers have seen an estimated 35 percent increase in less than one year.

Break down

As stated in a TVA press release, that 20 percent hike, passed in August and made effective in October, was broken down into two components.

"Most of the increase, $11.20 per 1,000 kilowatt hours, will go toward escalating costs of fuels used to generate electricity" the release stated.

The remainder, approximately $2.05 per 1,000 kwh, is an increase in firm wholesale electric rates to cover higher costs in related areas.

Those "related areas" include working capital, costs related to fuel inventory that are not covered in the FCA, the cost of reserving power for future purchase to get better prices, and investments in TVA's work to reduce the rate of growth in the region's power demand.

Crowder believes some of those operating costs include the clean-up from Katrina, as well as the upcoming clean-up from the two recent disasters involving TVA retention ponds, which could cost in the billions.

"I don't feel like we should have to pay for their mistakes," she said.

Rate hike, salary hike

The recent rate hikes are especially hard for her to take, she said, in light of recent news -- that TVA CEO Tom Kilgore just got nearly $1.1 million in incentive awards -- on top of his $655,000 salary and $300,000 deferred compensation package. Kilgore's compensation rose 11.6 percent in the fiscal year ending Sept. 30. In the TVA's financial report to the Securities Exchange Commission for that same fiscal year, released Dec. 16 and available at both the TVA and SEC web sites, it announced an increase in its operating revenues -- of 11.3 percent.

In a press release from TVA, it states the organization earned "a record $10.4 billion in operating revenues," and that "The increased revenue in 2008 was primarily a result of rate and fuel cost adjustments, driven by a 21-percent increase in fuel and purchased power costs."

The revenue did not include any from the 20 percent increase, which only took effect in October, after the close of the 2008 fiscal year.

"Why am I still paying TVA to help recoup their losses when their employees are getting million-dollar bonuses?" asked Crowder.

What next?

"I feel like we should do something about it, but I don't know what," said Crowder. "I know of one woman, she lives in a little 600-square-foot apartment and her bill doubled. She's on a fixed income. I don't see how she can pay that. $45 may not be a lot to some people, but for me, it's half of a week of daycare."

"We try to help," said McDonald. "We refer people to help agencies, and we can try to spread their bill out over several payments."

DREMC also offers Project HELP, which allows customers to donate a dollar or more on their own electric bills to help cover the electric costs of the disabled or elderly. The Town of Wartrace recently began considering a similar project. Although their utility bill is for water and sewer only, customers could donate from $1 to $5 on each bill. The money would then be given to a help agency such as Good Samaritan, to assist people in paying their electric bills.

"Things are so hard for people right now," said Laura Gentry, the town recorder, at a recent Water Board meeting. "We're just trying to think of some way to help."

But even the help agencies are limited by tightened budgets and weakening donations. Organizations such as Good Samaritan and local churches can often only help out with $40 to $100.

One way to help lower your utility bill is to visit the DREMC and TVA web sites, said McDonald. Both sites offer tips on reducing energy waste, from turning off lights to improving the quality of your home's insulation.