Estimated Effect of Eliminating TVA Electricity Demand Charges on the Price of Enriched Uranium
RCED-84-18, Oct 11, 1983
Pursuant to a congressional request, GAO reviewed the estimated effect of eliminating the Tennessee Valley Authority's (TVA) demand charges for power not taken on the price of the Department of Energy's (DOE) uranium enrichment services. Under the terms of its contract with TVA, DOE can take less power than in the agreement, but it must pay a demand charge for power under contract but not taken.
GAO obtained estimates from DOE on the effect of eliminating demand charges, assuming three different TVA electricity rates. Elimination of these charges would reduce the price of enrichment services between 4 and 5 percent in fiscal year 1984 and between 2 and 3 percent through fiscal year 1995. These estimates were based on 1984 dollars and, if the analyses included an inflation factor, the price in real dollars would increase.