Beasley, Allen, Crow, Methvin, Portis & Miles, P.C.

The Tennessee Valley Authority (TVA) may have to lean on customers to relieve some of its financial pains, according to the Associated Press. The nation’s largest utility is spending $1 million a day to clean up the mess left behind when a coal ash impoundment pond at its Kingston, Tennessee coal-burning plant failed and dumped more than a billion gallons of toxic material on to an east Tennessee community and into the Emory River. The coal ash spill cleanup effort is expected to cost the utility between $525 million and $825 million.

TVA also faces millions of dollars in pollution control expenses due to an environmental court ruling in North Carolina that ordered the TVA to accelerate its cleanup actions so the plants would stop polluting the air in neighboring North Carolina. Those improvements are expected to cost the utility $1.8 billion – about $1 billion more than the TVA had expected to pay.

Adding to TVA’s headache is the downturn of the economy, which has resulted in a 5 percent drop in power sales. TVA relies on the sale of power to generate revenue. The utility also experienced a $3 billion loss to its corporate retirement fund.

TVA CEO Bill Sansom is encouraged by the recent drop in fuel prices, but says he cannot guarantee that the company will not raise rates given the financial constraints the utility has come under.

“I hope these energy costs keep coming down enough that we can help not increase your customers’ rates. I know this winter it has been tough because we’ve had the higher rates and a cold winter. So we are very conscious of that,” he said.

TVA will set its fiscal 2010 budget in August.

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