KNOXVILLE, Tenn. (WATE) - The Tennessee Valley Authority is all set for another year, as their Board of Directors approved a $10.55 billion budget Wednesday, which begins October 1. 

The board opted to increase their customers' annual retail rate by 1.5 percent, a percentage that is below the rate of inflation, a TVA news release indicates. TVA CEO Bill Johnson believes the increase will be offset by the company's mission to improve efficiency and reduce operating costs.

In fact, TVA cut expenses by two percent in the current 2018 budget cycle. Increased savings were met with a seven percent increase in revenue, which helps them meet their goal of getting their total debt down to around $21.8 billion by 2023.

Johnson, along with TVA's chief financial officer, agrees the rate increase also helps them lower their debt. They attribute a savings of $1 billion in fuel costs and this years intense weather to the uptick in revenue, but say they have to prepare for less revenue next year. 

During a public comment portion of the meeting, NAACP leaders from all three sections of Tennessee encouraged the board to repeal the grid access charge, alleging it disproportionally hurts African American families. One leader spoke about the importance of alternatives.

"We need to advance clean energy, like solar energy. Tennessee can't be left behind and let states like Georgia and North Carolina reap the benefits of new clean energy. TVA must stop blocking the sun," he said.

The leader, representing West Tennessee, said "we believe the creative solutions that lower power bills like more efficiency and prices that reward people for managing their energy uses not fixed fees to raise bills," 

Stephen Smith, executive director of the Southern Alliance for Clean Energy, believes the claim that TVA's rates are among the lowest 25 percent in the U.S. is misleading.

"TVA keeps talking about low rates, but we actually have high bills. Remember, nobody pays a rate. They pay the rate times consumption plus the increasing fixed charges that make everybody's bills very large," he said.

Smith also takes issue with TVA's performance with solar power.

"What they're doing is they're undervaluing what solar brings to the grid and they've overbuilt natural gas plants so they don't want to commit to solar. 

CEO Bill Johnson said he listens to the public comment, adding "We have a different view than some on what the priority needs ot be. For example, I have a much different view on if solar today is the cheapest way to make electricity. I believe I can demonstrate empirically that it is not. Our requirement is to make it at the lowest feasible cost."

Johnson also said later this year, TVA will be announcing a major solar project involving a couple hundred mega watts of solar power. He also says the company has already committed $8 million in contracts for more wind and solar energy throughout the valley.