Is this our future? TVA grapples with lower demand


Quick Take:  Layoffs? Plant closings? Just as utilities are being asked to spend more to modernize, they are making less - in some parts of the country at least - due to falling demand. Could TVA's troubles soon spread elsewhere? - Jesse Berst


The Tennessee Valley Authority (TVA) has been forced to reorganize itself and revamp its long-range plans to cope with a steady decline in residential electrical consumption.


In 2007, an average TVA household used 16,012 kWh per year. By 2013, that number had dropped to14,671 kWh.


In a year-end financial call, TVA President and CEO Bill Johnson admitted that declining demand had driven TVA revenues down by 2% in fiscal 2013. As a result, TVA has been pursuing a voluntary reduction-in-force program. In addition, it has decided to retire eight coal units since demand had not returned despite the improvement in the economy.


TVA has also accelerated the update of its integrated resource plan. It was not due until 2015, but the reduced demand is forcing TVA to rethink its forecasts.


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