Rain, cooler weather reduce power bills in the Tennessee Valley

Rain, cooler weather reduce power bills in the Tennessee Valley

August 16th, 2013 by Dave Flessner in Business Around the Region

TVA logo

TVA logo

A cooler and wetter summer is helping produce lower electric bills in the Tennessee Valley.

Buoyed by 44 percent more generation from its hydroelectric dams this year, the Tennessee Valley Authority is cutting the fuel portion of its electricity rates next month by an unprecedented 20 percent below the year-ago rate. The September cut will lower the average monthly light bill for residential customers in Chattanooga by nearly $4 next month, 2.7 percent below this month's rate.

"These are the lowest rates since March 2012," TVA spokesman Scott Brooks said. "The cooler summer temperatures have reduced demand, and all of the rain we have received is helping us produce more hydro power from our dams."

Rainfall in the seven-state TVA region is 35 percent above normal so far this year. Chattanooga has received as much rain so far this year as what typically falls in an entire year - with four and a half months left in the year.

Hydropower from TVA's 29 power-generating dams provides the lowest cost power for TVA since Mother Nature provides the "fuel" for such power.

The weather also has taken the heat off of ratepayers with milder temperatures and less use of air conditioning this summer.

EPB said power sales in July were down 10 percent from a year ago and are likely to be down again this month, given the milder temperatures so far in August.

"It's been an extraordinarily mild year and the load is definitely down," EPB President Harold DePriest said Thursday. "The good thing is that everybody will get relatively low electric bills."

With power sales down, TVA is having to not having to buy more expensive power on the grid or crank up its least efficient generating units.

TVA's industrial customers, who have complained about the federal utility raising rates above the Southeastern average over the past decade, are welcoming the fuel cost reduction next month.

"When rates are going down for whatever reason, that's a good thing," said John Van Mol, executive director for the Tennessee Valley Industrial Committee, a Nashville-based trade group that represents the biggest industrial customers who buy electricity directly from TVA. "We are encouraged that TVA's new CEO Bill Johnson has heard us and our rate concerns and is committed to having competitive electric rates."

The TVA board will meet in Knoxville next Thursday to adopt a budget for fiscal 2014 and could adjust TVA's base rates upward, starting Oct. 1. With sales expected to be stagnant or even down slightly, TVA will continue to work on finishing Watts Bar Unit 2 and installing pollution controls on a handful of its coal units in the next year. TVA also will have to resume payments to its employee pension program in fiscal 2014.

Despite such cost pressures, TVA customers say they expect TVA to keep any rate increase comparable with the general rate of inflation over the next few years.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340