TVA to boost rates 2.1 % in May

TVA to boost rates 2.1 % in May

April 13th, 2012 by Dave Flessner in Local Regional News

The TVA headquarters building is located in downtown Chattanooga.

Photo by Angela Lewis /Times Free Press.

The Tennessee Valley Authority will raise its wholesale rates another 2.1 percent in May to cover the anticipated higher expenses of buying more power from other utilities as temperatures warm this spring.

TVA said today the typical electricity user in its 7-state region will pay from $1 to $3 more during May because of the increase in the monthly fuel cost adjustment.

Despite the increase, TVA said its fuel costs are still 1.5 percent below a year ago. Including the 2 percent base rate increase adopted last fall, however, TVA overall rates are still higher than a year ago.

The increase in TVA's fuel cost adjustment comes despite the drop in natural gas prices, which fell this week to the lowest level in a decade.

"Lower gas prices certainly help, but the driver for May is mainly based on demand," TVA spokesman Scott Brooks said. "The summer peak season usually kicks in around May, meaning demand goes up, which is what we are expecting."