VPI is an interruptible-power program for manufacturers and other industrial buyers of electricity, including TVA's directly served customers and those served by distributors. VPI, which became available in June, replaces TVA's previous interruptible-power program, Economy Surplus Power. We developed VPI in response to the volatility we've seen in the electricity market in recent years and because of requests from customers.
Customers signing up for the program have an opportunity to lower their power bill in two ways.
Second, as an hourly priced product, VPI gives customers the ability to further reduce their power bill by cutting consumption during periods of peak demand. The savings for these customers who can reduce consumption during these market days can be considerable. ESP pricing was based on actual costs that were unknown until after power was consumed. As a result, final ESP prices sometimes came in higher than estimated prices. Another key difference is that the VPI rate is based on TVA's cost of supplying the top 1,000 megawatts of electricity to Tennessee Valley customers.