Last month's abundant rain will bring cheaper power rates in January, TVA announced today.
The Tennessee Valley Authority will cut its wholesale price of power next month by 3.1 percent. The monthly fuel cost adjustment will save the typical electricity user from $2 to $4 in January, depending upon usage.
In an announcement of the change in electricity prices, TVA said above-average rainfall in November filled TVA reservoirs above normal and through the winter should boost TVA's hydroelectric generation -- the cheapest source of power for the federal utility.
"With hydroelectric generation that was almost 30 percent higher than expected, TVA was able to rely less on higher cost generation sources," TVA spokesman Scott Brooks said. "It was a good month for rain."
The utility also said lower demand is helping reduce the need to buy the most expensive power during peak periods.
TVA adjusts its power prices each month to reflect the cost of the fuel it buys or power in purchases to supply electricity to customers in parts of seven states.
The fuel cost adjustments, combined with a base rate increase of 2 percent on Oct. 1, will leave TVA wholesale rates on electricity up by less than 1 percent next month from the levels of January 2011.