Electricity rates in the Tennessee Valley will drop in November for the third consecutive month as cooler temperatures and economic activity combine to limit power usage and fuel costs.
The Tennessee Valley Authority said Friday it will cut its monthly fuel cost adjustment next month by 0.7 percent, pushing power rates below where they were a year ago despite a 2 percent base rate increase adopted on Oct. 1.
In Chattanooga, EPB estimates the average residential customer will save 82 cents in November because of the drop in the fuel cost adjustment. The average household using 1,460 kilowatt-hours of electricity will pay $146.04 for power next month, EPB Chief Financial Officer Greg Eaves said.
Rates are coming down amid the seasonal falloff in power usage as temperatures moderate and the price of natural gas, coal and purchased power falls in the autumn months.
Additionally, TVA is benefiting by increased availability of its cheapest power source. Rainfall in the Tennessee River basin above Chattanooga was 80 percent above normal last month after Hurricane Lee dumped more than 10 inches of rain on parts of the region, TVA spokesman Scott Brooks said.
The November cut in fuel cost adjustments follows a 4.4 percent cut in fuel costs this month and a 1 percent cut in September. Those increases were partially offset, however, by a 2 percent base rate increase this year as part of TVA's $12 billion spending program for fiscal 2012 which began Oct. 1.
Also this month, TVA boosted its incentives for commercial and industrial customers to install energy-saving equipment that helps cut their power usage. TVA is doubling its budget to $8 million to pay customers who use less electricity through the installation of energy-savings investments.
Bob Balzar, TVA's vice president of energy efficiency and demand response, said about 700 companies in the past year have participated in TVA's EnergyRight Solutions program. As of Oct. 1, TVA increased the cash incentives in the program from 5 cents to 10 cents for each kilowatt-hour saved by businesses that install energy savings equipment.
Balzar said businesses have moved to higher-efficiency lighting, heating, cooling and machinery to qualify for the incentives and help cut their electric bill.
"TVA has made increased energy efficiency a key part of meeting power demand in the Tennessee Valley," Balzar said. "We want to lead the Southeast in energy efficiency."
Saving power helps TVA from having to buy or produce more new power, which is usually more expensive than the utility's existing sources from hydro, coal, gas or nuclear.
Last year, TVA's energy efficiency programs helped cut electricity usage by 550 gigawatt-hours, Balzar said.