Higher rainfall and cheaper natural gas will keep the fuel cost portion of next month's electricity bills at their lowest price since the Tennessee Valley Authority added the monthly fuel cost adjustment five years ago.
July fuel costs will be up slightly from the June rate, adding 16 cents to the monthly electricity bill for an average Chattanooga household using 1,295 kilowatthours of power. But compared with a year ago, the typical Chattanooga power bill in July for a household using an average amount of power should be $2.41 cheaper, dropping from $142.71 for power bills in July 2017 to $140.40 next month, assuming the use of 1,295 kilowatthours of electricity.
TVA spokesman Scott Brooks said the overall system average fuel rate for July is approximately 16 percent lower than the three-year average July fuel cost.
"This is the first time that the fuel cost in July has been below 2 cent per kilowatthour," Brooks said today. "This is normally the time of year it spikes because of the hot weather, but we are benefiting by more hydro generation (because of above-average rain) and lower cost natural gas (which fuels many of TVA's newest power generators.)"
The July 2018 total monthly fuel cost will be 1.892 cents per kilowatt-hour for residential and business consumers and 1.709 cents per kilowatt-hour for large industrial customers served by TVA and local power companies.
TVA, which supplies power to about 9 million Americans in seven Southestern states, adjusts its rates each month to reflect the changing cost of fuel for its power generation, which comes from a combination of nuclear, coal, natural gas, hydro, wind and solar sources. TVA also adjusts its base rates each year.
TVA is planning another 1.5 percent base rate increase in its wholesale rates for the fiscal year beginning Oct. 1, although there has been some opposition to that proposal from Volunteer Energy Corp., and other TVA distributors.
The TVA board will vote on the rate increase as part of its consideration of the fiscal 2019 budget at its August board meeting in Knoxville.