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The City of Alcoa is hiring a consultant to help figure out TVA's new method of billing cities for electricity.

City Manager Mark Johnson said the city has hired consultant Chris Mitchell, the mayor of Norris and a retired TVA employee, to look at the Alcoa system, rates, future forecast and how Alcoa can line up with the new TVA billing system.

Instead of billing for electricity demand, the agency will charge cities different rates depending on the time of day electricity is used.

TVA must have electricity available to meet peak demands and the change is an effort to spread electric use out more over the day to reduce the peaks.

This will be true for both commercial and residential customers.

TVA will charge less for electric use at times other than peak periods.

"That gets extremely complex...to bill people on hours of use," Johnson told Alcoa City Commission last week.

TVA is expected to initiate the different way of billing for electricity in October, but the city must tell TVA in April how it will bill customers.

"We're probably looking at a modest rate increase when we adjust rates in October - 2 to 2 1/2 percent," he said.

Johnson also said down the road a few years another 1 percent increase will likely be needed.

Alcoa has not raised electric rates since 2003 except to pass along TVA rate hikes to customers, Johnson said. That money just passed through Alcoa and went straight to TVA.

He said the city is fortunate because new meters Alcoa Electric Department has installed will be able to handle this billing change, Johnson said. There would have been a problem with older meters.