Harold DePriest

The number of Chattanooga residents disconnected for not paying their power bills could increase after October, EPB’s president said Thursday.

Every year, EPB disconnects about 15,000 customers for nonpayment, including 3,000 customers who are disconnected multiple times, said EPB President and CEO Harold DePriest.

EPB customers will start paying 20 percent a month extra for power in October, he said.

“People who are living on the edge financially or people who get into financial trouble in the coming year, this will make it more difficult for them,” Mr. DePriest said. “It scares me to death.”

The average monthly bill is $112, which will jump to $127 after the increase, EPB spokeswoman Lacie Newton said. Monthly bills vary by season because of heating and cooling requirements, she said.

The 15,000 customers disconnected every year by EPB represent 10 percent of its customer base, Mr. DePriest said.

“I can’t give away power,” he said. “And if I loosen up my policies to the extent that somebody gets in debt multiple months — if they can’t pay one month they can’t pay two.”

EPB’s rate increase comes on the heels of a 20 percent hike in rates from its power supplier, TVA, Mr. DePriest said. With TVA going up, EPB has no choice but to pass through TVA’s price increase, he said. TVA probably will have to raise its rates for the next several years, he added.

Starting in October, TVA is raising its fuel-cost adjustment rate by 17 percent and its base rate by 3 percent, spokesman Jim Allen said. The fuel-cost adjustment is a response to spiking prices for coal and natural gas, he said. The base rate is being increased to cover higher capital costs and to keep inventory supplied to TVA’s power plants, he said.

The price of coal has shot up from just over $35 per metric ton in January 2004 to more than $135 per metric ton this summer, according to the U.S. Department of Energy and the New York Mercantile Exchange.

TVA buys its coal on long-term contracts, which helps keep prices lower than buying the coal on the volatile futures market, Mr. Allen said. The agency’s coal cost has risen 59 percent over five years, but TVA would have paid 240 percent more for coal on the futures market, he said.

As TVA’s coal contracts expire, they are renewed at the new, much-higher rates, Mr. DePriest said.

A weak dollar means that much of America’s coal is being sold overseas, Mr. DePriest said, with China gaining an enormous appetite for the commodity. China plans to build 500 coal plants in the next 10 years, he said.

Last year, China added the equivalent of six of TVA’s entire coal systems, Mr. Allen said, or one power plant every seven to 10 days.

EPB customers in danger of disconnection can call the company and arrange to extend the bill’s due date, Mr. DePriest said. EPB does more than 200,000 of these extensions a year, he said.

For customers who get paychecks or government checks at a certain time of the month, they can set a particular date to pay the power bill, Mr. DePriest said.

“What we try to do is work with people and help them manage their payments,” he said.

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