UPDATED 8/20/08 6:55 p.m.:KNOXVILLE, Tenn. (WVLT) -- Keeping cool isn't cheap, but come October, today's light bill may seem like a bargain since TVA is raising electric rates 20 percent

It's largest one-time hike since the energy crisis back in the 70s.

Most of this hike -- 17 percent -- is a fuel adjustment charge. It’s TVA’s way of covering its own power or raw fuel supplies on the spot.

“We're trying to keep things cool. With the summer heat. Cause he sleeps better.”

Little Mark, Big Mark, and sister Kiya are buying what dad calls learning materials, but dad hadn't counted on new math in his TVA's Electric bill

Mark Howard says, “It's gonna go up 20 percent October first. Now that's not a happy thought. Guess we'll have to cut back.”

Knox County resident Ed Anderson says, “Probably 30 to 40 bucks a month, which is not small.”

TVA President and CEO Tom Kilgore says, “I hope that someday it rains and that it will come down.”

The fact, TVA's boss says, is that drought pushes TVA to produce more power through coal that must be bought on the spot at a time when oil prices have turned coal to black gold.

Coal’s spot price has more than tripled in the past five years, and more than doubling this year.

TVA's contract -- or long-term price -- is up 58 percent this year.

Kilgore says, “I think it probably will stay at the level its at, probably with a mild increase over the next couple of quarters.”

Other states, more dependent on fuel oil or natural gas, put out the warnings months ago, but Kilgore says when it comes to TVA, “The freight train became apparent to us later…I didn't know much about it until today.”

UT administrators apparently saw it coming.

UT Facilities Director Mike Sherrell says, “Sometime in early September we'll be rolling out a voluntary savings plan. I don't want to get too much into it know because it'd give too much away.”

Sherrell says some cutbacks will be mandatory. UT's bracing for a $2 million light bill.

Mark Howard, on the other hand, has only six weeks to brace his own budget.

“I could have easily used a little bit more time. Just simply planning and budgeting, I may not have spent so much today.”

TVA figures the combined rate raise and fuel adjustment charge will push the typical monthly bill to about $105 dollars once your power company passes the cost onto you.

That’s roughly $20 higher than customers of Kentucky Utilities or Louisville Gas and Electric, and slightly more than Georgia Power. But It’s less than the average for South Carolina and most of the Midwest or Northeast.

TVA says this isn't a backdoor way to force you to cut your electricity use or support more nuclear power. In fact, administrators says TVA’s nukes are running at peak.

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UPDATED 8/20/08 1:18 p.m.: KNOXVILLE, Tenn. (AP) -- The Tennessee Valley Authority has approved a huge electric rate increase for millions of consumers across the seven-state region.

TVA directors meeting in Knoxville Wednesday approved a total increase in rates of 20 percent effective Oct. 1.

The impact on the average TVA household will be an increase of $12 to $15 a month per 1,000 kilowatt hours used.

The average TVA household uses 1,320 kilowatt hours per month. The increase is broken down as 17 percent in a quarterly fuel adjustment charge to offset rising costs in coal and natural gas prices.

The other 3 percent is part of the base rate increase taking effect under the new $12.6 billion budget for fiscal 2009.

This would be the largest increase at TVA since a 20.2 percent increase in 1974.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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UPDATED 8/20/08 12:29 p.m.: KNOXVILLE, Tenn. (AP) -- The Tennessee Valley Authority has approved its largest electric rate increase in more than 30 years.

The 20 percent hike will affect millions of customers across the TVA's seven-state region. The change will raise monthly bills between $15.80 and $19.80 for the average residential customer beginning Oct. 1.

TVA directors meeting in Knoxville, Tenn., on Wednesday blamed most of the increase on rising costs of coal and natural gas.

A smaller portion of the increase is part of the base rate hike taking effect under the new $12.6 billion budget.

This is the largest increase at TVA since a 20.2 percent increase in 1974.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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KNOXVILLE, Tenn. (WVLT) -- The Tennessee Valley Authority Board of Directors has approved a 20 percent rate increase that will take effect Oct. 1.

The approved increase is made up of a 17 percent fuel cost adjustment and a 3 percent phased rate increase.

Stay connected to Volunteer TV News and VolunteerTV.com for continuing coverage of this developing news story.