Fuel costs down 25 percent in past year for TVA customers

Fuel costs down 25 percent in past year for TVA customers

November 1st, 2013 by Dave Flessner in Business Around the Region

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Winter heating bills won't take quite as much cold cash from Tennessee Valley consumers this month compared with a year ago.

TVA is raising its fuel cost adjustment today to add about 64 cents to this month's typical residential electric bill in Chattanooga. But compared with November 2012, electric bills for the average Chattanooga household using 1,461 kilowatthours of electricity will be down by $7.76 this month.

TVA has cut the fuel portion of its electricity rates by about 25 percent over the past year, due to cheaper natural gas, abundant hydroelectric power and less demand for more expensive purchased power.

"This is the time of year we normally see costs rise with usage as we head toward winter peak season," TVA spokesman Scott Brooks said.

But the increase is less this year, even after declines in TVA's monthly fuel cost adjustments earlier in 2013.

"Any lower movement in fuel costs is certainly welcome and helps make production by our industries more affordable," said John Van Mol, executive director for the Tennessee Valley Industrial Committeel, which has been pushing TVA to cut industrial rates.

TVA projects power sales this month will be down 10 percent from a year ago, due to milder weather and the loss of TVA's biggest industrial customer -- the U.S. Enrichment Corp., plant in Paducah, Ky., which shut down in May. With less demand, TVA buys less power on the grid and is able to use more of its own, cheaper power supplies.

TVA's cheapest source of power comes from its 29 hydroelectric dams on the Tennessee River and its tributaries. Such hydro power is up 50 percent this year over last because of above-average rainfall this year. So far in 2013, rainfall in Chattanooga is 14 inches above normal.

EP spokesman John Pless said the average residential electric bill in Chattanooga this month is projected to be about $143.67, assuming usage of 1,461 kwh. For November 2012, average residential bills for the same power load were $151.43.

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