TVA boosting price of electricity for April

Tuesday, March 13, 2012

photo The TVA headquarters building is located in downtown Chattanooga.

The wholesale price of electricity in the Tennessee Valley will rise 3 percent in April, reversing most of the rate decreases of the past two months.

TVA said today the monthly fuel cost adjustment is rising next month to reflect the drop in hydroelectric generation, TVA's cheapest power source. TVA estimates the increase in the fuel cost adjustment will add anywhere from $2 to $4 to the typical ratepayer's bill in April.

TVA adjusts its wholesale rates each month in response to changes in the cost of fuel and purchased power. The mild and wet winter cut fuel costs below normal this winter, cutting fuel costs in each of the past three months.

"With less hydro generation in the forecast, purchased power costs are expected to be higher," TVA said in a statement announcing the monthly fuel cost increase.

Despite the April increase, TVA's fuel cost adjustment is still below the level of a year ago. In the past 12 months, fuel cost adjustments have lowered rates in eight months and raised rates in the other four.