'Tis the season for travel, and the estimated 112.7 million Americans traveling away from home during the holidays are getting an early Christmas gift this week with the cheapest gasoline prices in the past year and a half.
The average price of regular gas in Chattanooga fell another 9 cents a gallon in the past week to $2.63 a gallon — the lowest price since the spring of 2021, according to GasBuddy's survey of 170 stations in Chattanooga. Gas prices in Chattanooga have dropped 48 cents per gallon over the past month and are now 26.7 cents a gallon below where they were heading into Christmas a year ago.
"The national average for a gallon of gasoline is down nearly $2 compared to six months ago, and heading into Christmas travel week, is at its lowest in a year and a half, saving Americans some $750 million every day," Patrick De Haan, head of petroleum analysis at GasBuddy, said in a report Monday. "Fuel prices across the board have been plunging back into territory more Americans feel is normal, which could certainly boost economic sentiment going forward."
At home, energy prices are still up from a year ago for heating and cooling homes. The U.S. Energy Information Administration projects winter heating bills nationwide will be up an average of 10% for those relying on electric heat, by 27% compared to the previous year for those using heating oil, and by 28% from the past year for those heating with natural gas.
But electricity prices in the Tennessee Valley are rising at a slower pace than most of the country. Due to its more diverse generating portfolio, Tennessee Valley Authority has held its base rates constant over the past four years and its fuel cost adjustment is rising less than many utilities since TVA derives more than 60% of its capacity from nuclear power plants, hydroelectric dams and renewable sources like solar and wind that are less dependent upon volatile fossil fuel prices.
Winter heating bills
In Chattanooga, EPB electric rates in January 2023 will be up 3.6% from a year earlier, or less than half the projected increase in electricity prices nationwide, according to EPB fuel adjustment figures for January released on Monday. For the typical EPB residential customer who uses 1,295 kilowatt-hours of electricity a month, the higher rate next month will add $4.76 to their monthly light bill compared with January 2022.
TVA spokesman Scott Brooks said in an email message Monday that fuel costs for TVA are 45% higher than the average price of such fuel over the past three years.
"The higher fuel rate is mostly due to higher commodity prices, relative to the comparative three-year timeframe, which includes COVID impacts when demand was much lower," Brooks said. "Natural gas prices, in particular, are still very volatile in both directions."
But TVA is holding the line on its baseline rates and the jump in natural gas and coal prices are minimized, to some extent, by TVA's 29 hydroelectric dams and numerous solar farms.
The year-over-year increase in TVA's fuel cost adjustment for electricity in January will be less than half the year-over-year increases for fuel cost adjustments last summer, Brooks said
Energy prices are up from where they were during the pandemic when demand for gas, oil and electricity declined when more people stayed at home and factories operated less often.
Hitting the road
With the COVID-19 pandemic easing this year from where it was in the previous three Christmases and a more favorable holiday calendar, more people are traveling away from home from the holidays.
"This year, travel time will be extended due to Christmas Day and New Year's Day falling on Sundays," Paula Twidale, senior vice president of travel for the Amerian Automobile Association (AAA) said in a report last week. "With hybrid work schedules, we are seeing more people take long weekends to travel because they can work remotely at their destination and be more flexible with the days they depart and return."
Nearly 102 million Americans will drive to their holiday destinations or 2 million more than a year ago. Travel by car this year is on par with 2018 but shy of 2019 when 108 million Americans drove out of town for the holidays, the highest year on record.
Air travel will see a 14% increase over the past year, with nearly 7.2 million Americans expected to fly. AAA expects the number of people taking holiday flights this year will come close to matching 2019 when 7.3 million Americans traveled by air.
"If the distance is not reasonable to drive, more people are taking to the air to maximize the time spent at their destination," Twidale said. "Conversely, if the travel distances are reasonable and more than one or two people in the household are taking the trip, it may be more cost-effective to drive rather than buy multiple air tickets, rent a car, and spend too much money before the fun even begins."
According to GasBuddy price reports, the cheapest station in Hamilton County for standard regular gas purchases was priced at $2.38 per gallon in Ooltewah where a Circle K was also selling regular gas for as low as $2.29 a gallon Monday for those signed up for the station's easy pay bonus program.
Chattanooga gas prices, on average, are 46 cents a gallon below the U.S. average, according to GasBuddy.com. From the peak average price of $4.56 a gallon for regular fuel reached in June, gas prices have nearly dropped in half during the past six months.
Contact Dave Flessner at email@example.com or 423-757-6340. Follow him on Twitter @DFlessner1.