Recession puts brake on energy costs

Diane Conrad drives at least 64 miles a day between her Whitwell, Tenn., home and her job in Hixson so she regularly checks gas prices to cut her travel costs.

"Every penny a gallon really helps," the Waffle House waitress said while filling up her Ford Taurus after gas prices dropped 2 cents a gallon at the local Raceway this week. "It's certainly a lot better than a year ago."

While the slumping economy has cut jobs and earnings for many Chattanoogans, consumers are getting at least one reprieve from the recession -- cheaper energy.

The faltering economy and a mild summer cut demand for all types of fuel this year and offset the jump in energy costs from a year ago. Prices at the gas pump in Chattanooga have fallen nearly in half from the peak prices of a year ago. Natural gas prices are down by more than one-third in the past year and electric rate cuts this year have nearly made up for the record 30 percent jump in TVA rates the previous year.

The Energy Information Administration estimated this week that the average household that heats with natural gas or propane will save about $84 through the upcoming winter, while TVA estimates the average electric-heated home could save a comparable amount.

"We're looking at natural gas prices we haven't seen in five years," said Eddie Roberson, a director of the Tennessee Regulatory Authority, which oversees gas utilities in the state. "Thanks to American ingenuity, we have a glut of natural gas supply. Because of the economy and conservation, demand also is way down."

Power sales by TVA are down nearly 7 percent this year -- the biggest drop in a half century -- as industries cut back and homeowners try to conserve on their bills. Natural gas prices have fallen as supplies have grown, Mr. Roberson said.

Chattanooga Gas Co. fuel prices are down 35 percent from a year ago, company General Manager Steve Lindsey said.

"We've had five purchased gas adjustments (to consumer rates) in 2009 and all of them have been down," he said.

Nearly 8 million other Tennessee Valley electric users are getting another price break this month in what they pay for electricity -- the fourth such fuel cost adjustment so far in 2009.

EPB estimates the 3 percent rate cut that began this week by the Tennessee Valley Authority will cut the average monthly power bill for local homeowners by $2.34.

Combined with three earlier fuel cost reductions in 2009, the rate reduction will offset most of TVA's near-record 30 percent jump in rates during 2008.

"Any rate cut is great news," Amy Hanson, a Rossville customer of EPB, said after paying her monthly electric bill. "I have to wait to pay my bill to the last minute every month, so I appreciate any cut they can make."

The electric rate cut also was welcomed by Emanuel Williams, who had to pay a $333 electric bill to EPB last month due to some electric wiring and meter problems in his home.

"That's way over half of my mortgage," the 42-year-old Chattanooga resident said. "I don't know what we can do, but something needs to be done about these rates because it's hard to maintain what I got when I have to pay bills that high."

Motorists are enjoying an even bigger break in prices at the pump compared to a year ago.

AAA surveys of gas stations nationwide found the average price of a gallon of regular fuel in Chattanooga on Friday was just under $2.26 a gallon, or $149 a gallon less than the same time a year ago.

Tennessee motorists enjoy the third-lowest price among all 50 states for gasoline, according to AAA, behind only Missouri and Arkansas. Georgia and Alabama are tied for the fourth-lowest gas prices among the states.

"It's certainly a lot better for all types of energy costs than it was last year," Hixson motorist Jacob Becker said while filling up his Ford 150 pickup. "I probably wouldn't be driving this truck if gas prices were still $4 a gallon."

Dustin Price, a 16-year-old Ringgold High School student, said the drop in gas prices is "great news."

"I drive a Ford 150 that gets about 12 miles a gallon, so lower prices really help," he said while filing up his vehicle at a Fort Oglethorpe Raceway station.

At the same station, Army soldier Bryan Escamilla was thrilled to be getting gas at $2.19 a gallon this week.

"I was in Iraq for the past year and, when I left, gas was $3.50 to $4 a gallon," said Mr. Escamilla, who was traveling from Colorado Springs, Colo., to Disney World in Orlando. "It's a lot easier to travel now."