CHATTANOOGA, Tenn. (WJHL) — Tennessee Valley Authority’s (TVA) directors approved a 4.5% electricity rate increase Thursday and also approved $15 billion in investments designed to build additional electricity generation capacity and upgrade its power grid.

A news release from TVA said the agency expects demand, so-called “load growth,” to increase by 30% over the next 10 years. Two power plants, Paradise and Johnsonville, are slated to add 1,250 megawatts of new generating capacity by next year, part of 3,800 megawatts currently being added to the system.

TVA sells power directly to local distributors such as BrightRidge, Elizabethton Electric System and others. Kingsport-area customers of Appalachian Electric Power (AEP) are the only Northeast Tennessee customers whose power doesn’t come through TVA.

The release said the increase translates to an average of $3.50 a month on a typical monthly residential energy bill. It said TVA’s base power rates have remained flat for four years prior to this increase.

“TVA is not immune to cost increase, inflation and supply chain challenges,” TVA CEO Jeff Lyash said in the release.

“We worked to minimize any impact on families while balancing our region’s growing energy needs, and these funds will allow us to invest in new capacity as well as invest in the reliability of our current assets.”

The release noted that the Tennessee Valley’s population is growing at three times the national average. Lyash said the agency projects huge demand growth in the next two to three decades, requiring TVA to “double or triple the current systems at a speed unlike any other time in TVA history”.