TVA Board Approves New Rate Classification For Data Centers

December 11, 2008

The TVA Board today approved a change in TVA’s manufacturing rate classification to help retain and attract data centers and similar businesses to the Tennessee Valley.

Under the change, data centers are eligible for TVA manufacturing rates if they have a power demand in excess of 5 megawatts and operate at an average of at least 80 percent of this demand.

“We recognize the benefits data centers bring to the Tennessee Valley by bringing high paying jobs to local communities and by using power in a way that complements the TVA power system,” said TVA President and CEO Tom Kilgore.  “TVA offers a variety of rate options to attract and retain qualifying industries in the Valley and to increase their competitiveness in today’s economy. TVA reviews its rate options regularly and makes adjustments to coincide with marketplace changes and customer needs.”

Data centers are typically large facilities that house computer systems and associated components.  Examples of data centers include Internet search engine companies, businesses that process financial transactions and other high-tech industries.

Like manufacturing businesses, data centers locate where they can get the most competitively priced, reliable power and best overall cost structure for their businesses.

Meeting by conference call, the Board also approved performance goals for Fiscal Year 2009 for employees.  Employees’ performance targets are spelled out each year on TVA’s Winning Performance scorecard -- a program similar to pay-for-performance plans at other utilities.

The scorecard sets specific performance targets for possible employee incentive pay as determined by achievement in the following areas:

• Transmission system reliability, measured by connection point interruptions.
• Overall demand reduction, gauging TVA’s success in reducing overall power demand.
• Generating system reliability, measured by the equivalent availability factor for coal and nuclear plants.
• Net cash flow from operations less investing, reflecting the need to reduce expenses as the economic downturn affects TVA revenues. 

“As the slower economy reduces our revenues, we must offset that loss by proportionally reducing our internal expenses, primarily our non-fuel operating and maintenance costs and any capital expenditures that can be postponed,” Kilgore said.

TVA is the nation’s largest public power provider and is completely self-financing.  TVA provides power to large industries and 158 power distributors that serve approximately 9 million consumers in seven southeastern states.  TVA also manages the Tennessee River and its tributaries to provide multiple benefits, including flood damage reduction, navigation, water quality and recreation.

 

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