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A growing population in the Tennessee Valley has also led to growth in another area — electricity-production costs with local customers having to pay higher bills.

George Powell, Winchester Utility System general manager, updated the Winchester City Council on Oct. 10 about increases the utility has faced, stemming from a 4.5 percent hike the Tennessee Valley Authority recently approved to its wholesale electricity rate. The increase went into effect on Oct. 1.

Powell said Winchester Utility System has different rate structures for residences, businesses and larger establishments, and the rate increase passed on at the residential level was 2.78 percent.

He said the average monthly residential bill Winchester Utility System customers pay was $132.61 monthly which went up $3.68 to $136.29.

Powell said the TVA will use the added revenue to fund $15 billion in investments during the next three years to build additional generation capacity and upgrade the existing system to ensure the region continues to benefit from affordable, reliable power. The TVA is focused on meeting growing electricity demand while maintaining energy security and moving to a net-zero carbon future, he added.

“Winchester Utility System understands the importance of providing safe, reliable and affordable electricity to our customers,” Powell said. “While TVA’s wholesale rate increase presents challenges, we remain committed to managing these impacts effectively to ensure that our community continues to receive the exceptional service it deserves.

 “We are committed to maintaining competitive rates and will do our utmost to keep any changes as minimal as possible.”

A TVA press release said the agency expects demand, referred to as “load growth,” to increase by 30 percent over the next 10 years.

Two power plants — Paradise and Johnsonville — are slated to add 1,250 megawatts of new generating capacity by next year, part of 3,800 megawatts being added to the system.

The TVA sells power directly to local distributors such as the Winchester Utility System, the Tullahoma Utility Authority and others throughout the Tennessee Valley. Kingsport-area customers of Appalachian Electric Power are the only Northeast Tennessee customers whose power doesn’t come through TVA.

The release said the increase translates to an average of $3.50 a month on a typical monthly residential energy bill. It said TVA’s base power rates have remained flat for four years prior to the increase.

TVA CEO Jeff Lyash explained the agency’s rationale behind increasing the power rates.

“TVA is not immune to cost increases, inflation and supply-chain challenges,” he said. “We worked to minimize any impact on families while balancing our region’s growing energy needs, and these funds will allow us to invest in a new capacity as well as invest in the reliability of our current assets.”

The release said that the Tennessee Valley’s population is growing at three times the national average.

Lyash said the agency projects huge demand growth in the next two to three decades, requiring the TVA to “double or triple the current systems at a speed unlike any other time in TVA history.”

Powell said the growth may be positive in some aspects, but it definitely presents challenges.

“It’s a difficult situation they’re in,” he said, referring to the TVA. “There’s increased demand for electricity, and they’ve got to generate it.

“It’s a good problem to have, but it’s a problem, nevertheless.”

Powell told the council that the recent 4.5 percent increase to the wholesale power rate may not be the only one in the near future. He added that another 4.5 percent increase could be forthcoming next year, but the outcome remains to be determined, depending on what circumstances the TVA faces.