After rising to a record high in August, consumers across the Tennessee Valley will get a reprieve next month with a drop in their monthly power bills.
But even with the decline in the monthly fuel cost adjustment and milder temperatures forecast in September, the price of electricity in Chattanooga next month will still be up by more than 12% from a year ago, according to EPB.
Homeowners have felt the heat in their pocketbooks this summer from higher temperatures and higher power rates that have combined to push up power bills by more than 30% for many homeowners.
“This summer has been a perfect storm of hot weather, record‐high energy demand and rising fuel costs,” Doug Perry, TVA’s senior vice president for commercial energy solutions, said in a report on the changing fuel cost adjustments.
According to TVA, electric load hit a June record of 31,617 megawatts, and natural gas prices were 141% higher this June than a year ago.
Bill Rush, executive director of Metropolitan Ministries, which tries to help low-income households cope with utility bills and other expenses, said in a telephone interview requests for assistance continue to overwhelm the agency’s ability to handle all of the consumer needs.
“Food and utility prices are up this year, and that has created hardships for more families,” Rush said. “EPB has been great to work with, but there continues to be real needs for a lot of people.”
The average request for help with power bills has increased to $222 this summer, Rush said.
The price of electricity in Chattanooga for a typical residential home that uses 1,295 kilowatt-hours of electricity jumped in August by 27% over the year-ago level, according to the EBP. TVA has kept its base rates flat since 2018, but the utility adjusts part of its charges each month based on the costs of fuel to produce electricity.
TVA officials said the fuel cost portion of power bills by TVA this month is nearly triple the average cost for fuel for August over the past three years, reflecting the highest monthly fuel cost for TVA on record.
“We’re seeing how higher natural gas prices impact our customers,” EPB President David Wade said during an interview this week. “We’re always working with our customers to try to help them figure out the best way to pay their bills. One of the programs we offer is our levelized billing plan to keep the same average bill throughout the year, which helps to limit some of the jumps in bills people see during the colder winter months or hot weather in the summer.”
EPB said the price of electricity, including base charges and the fuel cost adjustment, will be 11.6% cheaper next month than in the current month, reflecting a 33% drop in fuel costs.
Perry said temperature is the biggest driver for power bills, not the cost of power. As temperatures rise and more air conditioning is used to cool homes and offices, TVA turns to increasingly more expensive sources of power, including more purchased power on the grid and electricity generated by combustion turbines.
Lower temperatures in September will limit both the price and consumption of energy for most customers next month to cut their power bills significantly from the record highs reached this summer.
The Farmer’s Almanac estimates the average temperature in Chattanooga during September is 77 degrees, or 4.5 degrees cooler than the August average of 81.5 degrees.
TVA has pledged to keep its electric rates constant for at least a decade, and residential electricity prices in the Tennessee Valley are still well below the U.S. average, according to the most recent data from the U.S. Energy Information Administration. TVA directors are scheduled later this month to adopt a budget plan for fiscal 2023 that is projected to continue the base rate freeze.
“We’ve been using every tool in our toolbox to keep your power bill as low as possible,” Perry said. “We recognize the effect any cost increase has on families right now, and I can tell you that TVA is highly focused on doing everything possible to support communities by keeping power bills as low as possible.”
Chattanooga Gas Co., which is raising its gas prices by 5.6% next month, projects its rates will be up by more than 25% this winter due to higher natural gas prices.
Tennessee American Water and Hixson Utility District also are planning rate increases in September.
Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340. Follow on Twitter at @Dflessner1.
Price of power
Electricity prices in Chattanooga are adjusted each month according to changing fuel costs from the Tennessee Valley Authority. For the typical residential customer of EPB using 1,295 kilowatt-hours of electricity, the monthly bills are:
August 2022: $159.36
September 2022: $140.82
September 2021: $125.70
Source: EPB
What determines your bill
* Weather and usage: The amount of electricity that you use each month depends upon the temperature. If it is very hot or very cold outside, households use more power for heating or air conditioning.
* Base rates: TVA has set its base wholesale rates constant since 2019 to reflect the costs for generation plants, transmission from the generation plants to local power companies, and power distribution to your home.
* Fuel cost adjustments: A portion of the monthly bill is determined by the changing cost of the fuel TVA needs to generate electricity each month.