Variable Price Interruptible Power
Variable Price Interruptible Power, or VPI, offers several competitively priced power options to SIC-qualified customers with loads of at least five megawatts.
VPI prices are generally low because they follow TVA’s hourly power supply cost of producing electricity and because VPI has an interruptible feature. If TVA does not have enough power available or cannot purchase enough power to meet the region’s expected needs, VPI sales are interrupted.
VPI Pricing
VPI offers two separate programs for customers.
Zero Market Days VPI is a program for customers that cannot easily reduce load during peak periods when prices are high.
Market Days VPI is a program in which market prices for electricity replace cost-based pricing during certain on 12 days of the year. Customers that can dramatically reduce load during market pricing periods have an opportunity for significant overall cost savings.
VPI is priced at TVA’s hourly power supply cost of serving the top 1,000 MW plus a markup, except during market pricing periods under Market Days VPI. The amount of markup varies with the type of VPI the customer selects. TVA costs can change each hour of the day, and industrial customers can make hourly decisions about how much VPI they want to by at the available price.
Additionally, a nominal per-billing-kW charge is assessed to account for specific costs associated with this type of supply arrangement. There is also a monthly fee for computer, communications equipment, and administrative costs.
VPI Saves Money
Because sales are interruptible, TVA can serve others without installing as much system capacity. These savings are passed along to VPI customers through the rates.
Savings can be increased if a customer can modify operations to buy more VPI when hourly costs are low (off-peak) and less VPI when hourly costs are high (on-peak).
Options
The options differ by price and the way that power interruptions are handled.
VPI A may be interrupted upon five minutes’ notice. A customer can contract for no more than 50 percent of total power requirements under VPI A
VPI B may be interrupted on five minutes’ notice. A customer can contract for 100 percent of their power requirements as VPI B.
VPI C is also available for up to 100 percent of a customer’s power requirements but is interrupted on 60 minutes’ notice.
In addition to the markups for each VPI option, there is a 5.3 percent charge for payments in lieu of taxes.
The chart below provides a summary of the VPI options.
Zero Market Days VPI | VPI A | VPI B | VPI C |
Amount of Notice | 5 minutes | 5 minutes | 60 minutes |
Amount of Total Power | 50% | 100% | 100% |
Amount of Markup* | |||
Summer months (Jun-Sep) | 30% + 4 mills/kWh | 40% + 4 mills/kWh | 50% + 4 mills/kWh |
Winter months (Dec-Mar) | 20% + 4 mills/kWh | 31% + 4 mills/kWh | 42% + 4 mills/kWh |
Shoulder months (all other) | 20% + 4 mills/kWh | 31% + 4 mills/kWh | 42% + 4 mills/kWh |
Market Days VPI | VPI A | VPI B | VPI C |
Amount of Notice | 5 minutes | 5 minutes | 60 minutes |
Amount of Total Power | 50% | 100% | 100% |
Amount of Markup* | |||
Summer months (Jun-Sep) | 10% + 3 mills/kWh | 20% + 3 mills/kWh | 30% + 3 mills/kWh |
Winter months (Dec-Mar) | 5% + 2 mills/kWh | 15% + 2 mills/kWh | 25% + 2 mills/kWh |
Shoulder months (all other) | 5% + 1.5 mills/kWh | 15% + 1.5 mills/kWh | 25% + 1.5 mills/kWh |
* In addition to the markups, all options include the following: additional 5.3 percent charge for payment in lieu of taxes, a $1.21 kW charge, and a $1,075 per month communication access/administrative charge.
