Cheaper fuel and a leaner staff are helping TVA cut the cost of electricity in the Tennessee Valley.
Despite higher power bills for many homeowners last month due to the July heatwave, the average cost of TVA power in its seven-state region has declined by more than 8 percent in the past five years. Although TVA has adopted nominal base rate increases every year for the past three years – and is likely to do so again when the TVA board meets on Aug. 25 in Knoxville to set its fiscal 2017 budget – the overall price of delivered power has continued to decline.
The drop in natural gas, coal and purchased power costs reflected in TVA’s monthly fuel cost adjustments have more than offset TVA base rate hikes and cut the delivered price of power to an average 6.6 cents per kilowatthour – down 2.9 percent from the 6.8 cents-per-kilowatthour price of a year ago and and 8.3 percent below TVA’s price of 7.2 cents per kilowatthour in 2011.
“The cost efficiencies we’ve achieved in the past few years, combined with our diversified power fleet, are keeping power prices lower for our customers,” TVA President Bill Johnson told analysts Tuesday during the utility’s quarterly financial report. “TVA was able to take advantage of lower fuel prices and lower-price generation sources during the first nine months of the year, resulting in lower fuel and purchased power expenses compared with last year.”
A milder winter cut the amount of electricity most consumers used in early 2016, although power sales were more normal in the spring period, TVA reported Tuesday in its quarterly report filed with the U.S. Securities and Exchange Commission.