After eight consecutive months of rate increases, the Tennessee Valley Authority will cut its power prices by 5 percent, effective Nov. 1.
TVA officials said Wednesday that rates will drop next month for the first time since February because the utility is paying less for natural gas and purchased power.
November's reduction in the monthly fuel cost adjustment will save the average Chattanooga residential customer $5.37 next month, according to EPB figures.
"We need any break we can get," said Roland Clemons, a 70-year-old East Ridge resident who was paying on his $295 monthly bill at EPB's headquarters Wednesday. "That's a big chunk of my monthly income of only $876. I don't see how I'm going to make it if rates stay this high."
Next month's rate reprieve won't fully offset rate hikes of more than 30 percent since March. But spokesman Scott Brooks said TVA rates remain below the U.S. average, even before the upcoming cut, and still are below the peak price reached in the fall of 2008 before the recession began cutting fuel prices.
Brooks said next month's rate drop illustrates how the monthly fuel prices change.
"Our fuel costs were actually 12 percent below our forecasts for coal, natural gas and purchased-power costs," Brooks said. "That helped offset that fact that we sold more because it was warmer in September and our hydro generation was lower than expected."
September power sales were up 6 percent but its hydro generation was down by 31 percent.
Red Bank's Darla Ledford said the rate cut can't come soon enough. She said she had to pay more than $200 a month for electricity this summer.
"Being a single parent, that's a lot of money and a real hardship to have to pay that much," she said.
In its nationwide winter fuels outlook released Wednesday, the U.S. Energy Information Administration predicted that households heating with electricity should spend 2 percent per month, or about $18, less this year than a year ago.
Prices are projected to be 2 percent higher than a year ago, but weather should cut consumption by about 4 percent, the prediction stated.
Chattanooga Gas Co., announced last month it cut its rates by 18 percent in October because of lower commodity prices for gas.