The Cooperative Relationship

Scott Bobo - MDEC General Manager

Throughout the years, I have talked about Marshall-DeKalb Electric Cooperative from many different views. The view I want to examine today is the relationship between the Tennessee Valley Authority (TVA) and MarshallDeKalb Electric Cooperative (MDEC). Of course, this is a partnership that has spanned some 80 years and is still strong today. Understanding this relationship starts with knowing where we were and where we have come from.

feasible rates. When you, as a member, pay your electric bill, a portion of that bill goes to TVA for generating and supplying power to the MDEC, and a portion goes to MDEC for distributing the power to our members. The portion we collect is called the distribution rate. If a change to the distribution rate is required, TVA, through a process called the Local Rate Adjustment process, looks at the request individually and determines if it is appropriate and reasonable before the adjustment is allowed to go into effect.

Scott Bobo

TVA was created by Congress in 1933 to improve the quality of life for the residents of the Tennessee Valley. The original purpose, as present in the TVA act, was to address some of the pressing issues in the area including energy, environmental stewardship, and economic development. These are still the core reasons that TVA exists today. Currently, TVA provides generation and transmission to 154 local power companies (LPCs), direct served industrial customers, and federal installations. The LPCs are all made up of public power entities including municipal utilities and electric cooperatives. Just like TVA has a nine-member board that directs its actions, the LPCs have board members to direct the actions of the utilities. MDEC is one of the 154 utilities served by TVA.

Not only does the relationship between TVA and MDEC include providing distribution and transmission of electricity, but it also includes the provision of our power contract to which TVA has been deemed our regulator for retail rates. The relationship is created and regulated so that we both look at cost of service studies to ensure that we are providing electricity at the lowest

TVA’s role as a regulator goes beyond just rates. They provide oversight for MDEC as it pertains to several business processes. These include making sure that MDEC adheres to the rate schedule as well as the policies and procedures that are put in place. TVA also guides in handling many different policy issues and capital credits. They are tasked with making sure that every member is treated fairly.

This relationship has been one that has worked for many years. Just like our relationship with our members, it is sometimes tested. We have times when we don’t agree with TVA just like you all have times when you do not agree with us. However, overall the relationship is responsible for plenty of positive impacts on the Valley as well as our service territory. I realize that it will never be a perfect relationship but know that I continually work to do what is best for the members of MDEC.