TVA approves budget with no rate increase; Kilgore to retire

KNOXVILLE (WATE/AP) - Electricity rates for Tennessee Valley Authority customers in seven states will not be increased in the coming fiscal year.

The TVA board of directors on Thursday approved the 2013 budget of $11.2 billion with no rate increase.

President and CEO Tom Kilgore recommended not raising rates during the board of directors meeting in Knoxville. The fiscal year begins Oct. 1.

TVA increased rates two percent last year. It also makes pricing adjustments during the year for fluctuating fuel costs.

The federal utility provides electricity to 9 million people in Tennessee, Kentucky, Mississippi, Alabama, Georgia, North Carolina and Virginia.

Kilgore also said during the meeting he plans to retire in the next four to six months.

The board of directors has a process underway to recommend a new president and CEO. The board panel is retaining an executive search firm to identify candidates to succeed Kilgore.

Kilgore will continue to serve as president and CEO until completion of the search process and a successor is hired.

Kilgore serves as the first president and CEO for the country's largest public power utility. He joined TVA in 2005.

"I look forward to working more on my farm," said Kilgore, who grew up in northeast Alabama. "And I am proud of TVA'S focus on low rates, clean, reliable energy and enhancing the economic growth in the Tennessee Valley."

"Tom Kilgore is an experienced utility executive who has led TVA through challenging times," Sen. Lamar Alexander said. "Now the TVA board's job is to find a strong manager for its nuclear plants and clean-air objectives, a manager who can ensure that TVA will continue to provide reliable electricity at a cost low enough to help create jobs in the Tennessee Valley."

During a taping Thursday of Tennessee This Week, Sen. Bob Corker says making political appointments has led to TVA board members who have little experience in the utility industry.

Sen. Corker said a stronger board could have helped tom Kilgore manage TVA better. "I think a lot of tough decisions have been put off. I'm afraid I'm probably saying something I shouldn't be saying on television, but I'm afraid the federal government is going to destroy TVA over time, being involved with it the way we are," he said.

Corker was quick to point out that he isn't criticizing the Kilgore's leadership, saying he has a good working relationship with the outgoing CEO.

6 News Reporter Jessa Lewis contributed to this report. Some portions of this report copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.