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Nashville Electric Service raises customer charge by 40 percent
By Bonna Johnson - THE TENNESSEAN, Oct. 28, 2009
The fixed rate you pay each month to Nashville Electric Service - no matter how little or how much electricity you use - increased 40 percent starting this month.
The increase in the customer charge amounts to a jump from $8.39 to $11.72 a month. But because overall rates have gone down, customers will see little or no change on their October bills as long as their energy use was about the same as the previous month, said Laurie Parker, an NES spokeswoman.
The customer charge covers fixed costs, such as meter installation, meter readings, tree trimming, payment processing, postage and anything else related to customer service.
"We incur those costs regardless of how much energy is used," Parker said. The last time the customer charge was increased was in April 2006, when it rose to $8.39, she said.
Some consumer advocates, though, say a heavier reliance on such customer charges discourages consumers from being as energy efficient.
"Utilities like the larger customer charges because their revenue is less affected by weather, sales, the economy, etc.," said Gerald Norlander, executive director of the Public Utility Law Project of New York, a private nonprofit organization that represents low-income consumers in utility and energy matters.
"Many consumer advocates think this is foolish, as more of the utility bill becomes insensitive to usage when the customer charge is raised," he said. Norlander said the upshot is that it takes "longer for customers to reap the savings from more expensive and more efficient light bulbs and appliances."
Usage rates decreased
Other utilities in the Tennessee Valley report customer charges ranging from a low of $4.67 to a high of $19.04 a month, so NES felt an increase to $11.72 was reasonable, Parker said.
At the same time, the latest residential usage rates have decreased from
8.552 cents per kilowatt-hour to 8.496 cents per kilowatt-hour, Parker said.
The lower rate includes a reduction in the Tennessee Valley Authority's fuel cost adjustment, a charge tied to swings in the cost of coal, natural gas and other related expenses that TVA pays.
TVA and NES remain interested in consumers becoming more energy efficient, Parker said.
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