Understanding the NES Laundromat Commercial Power Rate

Introduction

In Middle Tennessee, Nashville Electric Service (NES) serves thousands of small commercial customers whose energy needs are relatively modest compared to large manufacturers or office complexes.
For these businesses like most laundromats, the GSA-1 rate code applies. Understanding how GSA-1 works can help small business owners control costs, forecast budgets, and decide whether future growth might push them into higher demand categories.

What GSA-1 Means

GSA stands for General Service, All — a TVA wholesale rate class adapted by NES.

• GSA-1 applies to commercial accounts with billing demand ≤ 50 kW.
• It is intended for small offices, retail stores, restaurants, or other low-demand facilities.
• Unlike higher tiers, GSA-1 customers do not pay a separate demand charge — their bill is based on a fixed monthly customer charge plus the energy charge for kWh used.

Rate Code	Demand Range	Typical Users
GSA-1	≤ 50 kW	Small commercial, retail, professional offices
GSA-2	50 – 1,000 kW	Medium-sized facilities
GSA-3	1,000 – 5,000 kW	Large commercial or light industrial

How GSA-1 Bills Are Structured

A GSA-1 bill includes:

1. Customer Charge – fixed monthly fee for service connection, metering, and billing.
2. Energy Charge – per kWh rate applied to total monthly consumption.
3. Fuel Cost Adjustment (FCA) – TVA’s monthly variable charge to reflect fuel and purchased power costs.
4. Applicable Taxes – city/county taxes applied at the end of the bill.

No demand charge means that for GSA-1 customers, controlling total kWh matters more than controlling the peak 15-minute load.

Example: NES Customer on GSA-1

Let’s model a hypothetical NES GSA-1 customer with these monthly characteristics:

• Billing demand: 32 kW (well below the 50 kW cap)
• Energy usage: 12,000 kWh
• Rate period: Example based on July 2025 GSA-1 schedule
• FCA: Example value 0.5 ¢/kWh

Published GSA-1 charges (example rates for illustration):

• Customer Charge: $30.00/month
• Energy Charge: 11.00 ¢/kWh
• Fuel Cost Adjustment: 0.50 ¢/kWh

Bill Calculation:

1. Customer Charge:
   $30.00
2. Energy Charge (Base):
   12,000 kWh × $0.1100 = $1,320.00
3. Fuel Cost Adjustment:
   12,000 kWh × $0.0050 = $60.00

Total Monthly Bill:
$30.00 + $1,320.00 + $60.00 = $1,410.00

Why It Matters for GSA-1 Customers

For a GSA-1 account, energy efficiency has a direct dollar-for-dollar impact.
Examples of savings strategies:

• Upgrading lighting to LED.
• Installing occupancy sensors.
• Adjusting HVAC settings during non-business hours.

Because there’s no demand component, short-term spikes (like turning on multiple ovens at once) won’t cause a separate line-item increase — though they do add to total kWh.

Conclusion

The GSA-1 rate is NES’s most straightforward commercial tariff. For small business owners, it offers predictable billing without the complexity of demand charges. However, monthly fuel cost adjustments can still cause modest fluctuations.
Understanding these factors lets owners better plan for electricity expenses — and positions them to re-evaluate their rate code if growth pushes demand past 50 kW.

 

10-Year Price Outlook for Small Commercial (GSA-1) in Middle Tennessee

Assumptions:

• Where prices are today: Tennessee’s latest audited monthly read shows commercial power at ~12.83 ¢/kWh (May 2025, preliminary). That’s up from 11.44 ¢/kWh a year earlier. U.S. Energy Information Administration
• Near-term (through 2026): EIA’s Short-Term Energy Outlook expects continued increases in U.S. retail electricity prices as commercial demand (incl. data centers) rises. U.S. Energy Information Administration+1
• Longer-term (out to 2035): EIA’s Annual Energy Outlook 2025 (AEO2025) reference case projects gradual nominal retail price growth nationwide/regionally (policy-neutral), which is the best federal benchmark available for a Tennessee projection. U.S. Energy Information Administration
• Local bill “wiggles”: In TVA territory, bills move month-to-month with the Fuel Cost Adjustment (FCA)—a pass-through that reflects TVA’s actual fuel/purchased-power costs. Expect periodic bumps even if the long-run trend is gradual. Middle Tennessee ElectricTennessee Valley Authority

Note: Exact NES tariff components (customer charge, any riders) can be updated periodically. The current GSA schedule defines how GSA-1/2/3 are structured and when you move between them. Nespower

Assumptions for the projection

• Start from today’s effective energy price in the example (GSA-1): ~11.5 ¢/kWh (11.0 base + 0.5 FCA from the earlier example).
• Customer charge inflates with general utility cost trends (assume ~2%/yr).
• Energy price follows three scenarios (nominal):
  • Low: +1.5%/yr
  • Base: +2.5%/yr (aligned with AEO’s “gradual increase” framing)
  • High: +4.0%/yr (stress case capturing sustained load growth/fuel tightness)

These are illustrative planning bands, not promises.

What that means for a typical GSA-1 bill (your earlier example)

Example load: 12,000 kWh/month; no demand charge on GSA-1; $30/mo current customer charge; 11.5 ¢/kWh all-in starting point.

Today

• Energy: 12,000 × $0.1150 = $1,380
• Customer: $30
• Total ≈ $1,410 (matches the worked example)

In ~10 years (2035), same usage

• Low (1.5%/yr):
  • kWh rate ≈ 13.3 ¢ → Energy ≈ $1,600
  • Customer ≈ $36 → Total ≈ $1,636
• Base (2.5%/yr):
  • kWh rate ≈ 14.7 ¢ → Energy ≈ $1,766
  • Customer ≈ $37 → Total ≈ $1,803
• High (4.0%/yr):
  • kWh rate ≈ 17.0 ¢ → Energy ≈ $2,043
  • Customer ≈ $37 → Total ≈ $2,080

Rule of thumb: Holding usage flat, a small commercial GSA-1 account should budget for ~+16% to +48% higher monthly bills by 2035, with ~+28% as a reasonable baseline—plus normal month-to-month FCA noise. This aligns with the EIA view: modest but steady nominal increases near-term (through 2026) and gradual growth longer-term, not state-specific but directionally applicable to TVA territory. U.S. Energy Information Administration+2U.S. Energy Information Administration+2