Cheaper fuel keeps Chattanooga area energy rates down

Cheaper fuel keeps Chattanooga area energy rates down

September 17th, 2013 by Dave Flessner in Business Around the Region

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• $142.25 - Typical residential electric bill in September, 2013

• $143.03 - Typical residential electric bill for October, 2013

• $149.84 - Typical residential electric bill in October, 2012

Source: EPB monthly rates for typical household monthly consumption of 1,461 kilowatthours of electricity.

The Tennessee Valley Authority is raising its base electric rates next month for the first time in two years, but cheaper fuel and abundant rains will still keep the total fuel-adjusted price of electricity 4.5 percent cheaper than a year ago.

For the seventh time in the first 10 months of 2013, TVA is cutting its monthly fuel cost adjustment for its 9 million customers in October. The lower fuel portion of ratepayers monthly bill -- typically about 30 percent of what a household pays -- will drop another 0.4 percent next month to leave TVA fuel costs 23.2 percent lower next month than in October, 2012.

"We're anticipating another mild month with less demand and slightly cheaper fuel," TVA spokesman Scott Brooks said.

TVA, the nation's biggest government-owned utility, has benefitted by abundant rains that have helped boost hydroelectric generation from its 29 power-producing dams -- the cheapest source of power for TVA. Natural gas prices also have remained relatively low and the mild weather and economy has helped TVA avoid having to use more expensive power generation this year.

TVA ratepayers will face slightly higher rates in October, however, when TVA's new fiscal year begins and a 1.5 percent base rate increase begins to fund the utility's $10.3 billion budget for fiscal 2014. Next month marks the first increase in TVA's non-fuel adjusted portion of power bills since fiscal 2012.

But fuel costs, which are adjusted each month, have more than offset the rise over the past year, Brooks said.

Such rate relief was welcomed Monday by EPB customers paying their monthly bills at the utility's downtown headquarters.

Belinda Grayson, a Virginia College student who lives in a 2-bedroom home in Highland Park, said her electric bill last month was $217, or $50 less than the previous month. But she said her power bills are much higher in the winter and "that takes a lot of your budget just to get by.

"You've got to pay to keep your house warm, or cool in the summer, but they don't seem to care how much these bills make many of us struggle," she said. "I just hope they keep my rates down."

TVA President Bill Johnson said last week the utility to looking at ways to trim operations and maintenance expenses to hold the line on power bills for both residential and industrial customers.

"We recognize the importance of low rates," he said during a hearing before members of Congress in Knoxville last Friday.

Contact Dave Flessner at or 757-6340.