The Bowling Green Municipal Utilities Board of Directors on Monday approved an increase of about 1.5 percent in electric rates to go into effect Oct. 1.

The rate increase is a result of the Tennessee Valley Authority’s decision to raise retail rates by 1.5 percent, BGMU General Manager Mark Iverson said. The increase is being passed on to retail customers, which is standard practice.

TVA considers its rates each year before the beginning of its new fiscal year in October, he said. “They go through that adjustment every year,” Iverson said.

Last year, TVA did not increase rates, he said.

The increase on a monthly bill for an average BGMU customer will be about $1.50, Iverson said after the meeting.

An average residential customer uses about 1,000 kilowatt-hours of electricity a month.

The TVA board approved the 1.5 percent retail increase in August along with a $10.5 billion budget for fiscal year 2014, which also begins Oct. 1, according to a news release. TVA’s last increase was in 2011.

TVA CEO Bill Johnson called the increase a “small adjustment” and said TVA’s priorities for the coming fiscal year include bringing operations and maintenance expenses in line with recent declines in sales and revenue, according to the news release.

The budget is about 6 percent less than the 2013 budget and anticipates 4.6 percent lower sales than last year, according to the news release. It also includes about $3.3 million in capital expenditures for Watts Bar unit 2 nuclear plant and clean air controls at the Gallatin Fossil Plant, both in Tennessee.

The Watts Bar nuclear plant unit 2 is expected to begin commercial operation in December 2015, according to the TVA website.

— Katie Brandenburg covers government. Follow her on Twitter at twitter.com/BGDNgovtbeat or visit bgdailynews.com.

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