Chattanooga, TN: (Aug-21-07) Birmingham Steel Co. filed a class action lawsuit against the Tennessee Valley Authority (TVA), alleging that it overcharged for economy surplus power during the summer of 1998 by improperly including some incremental costs in its power bills. Other industrial customers joined the action. The plaintiffs claimed that instead of distributing cheaper power generated by TVA to the industrial customers on hot summer afternoons, TVA delivered more expensive power bought from other producers and charged the economy surplus power customers higher rates.
In a settlement reached, Tennessee Valley Authority will pay $18 million to settle claims. It will make payments to customers involved in the utility's TVA's economy surplus power program in 1998. Sources state that with 436 businesses sharing in the settlement and attorneys getting more than a third of the money, the payout for each business will be only a fraction of the more than $100 million originally sought in the 1999 lawsuit. Though TVA denies allegations, it agreed to enter into a settlement in order to avoid the risks and costs of protracted litigation. [FLORIDA TIMES UNION: POWER SURPLUS]
