Chattanooga electricity prices rising again next month

Tony Overman / The Olympia via Tribune / Electric meters track power consumption. Chattanooga power bills will increase again next month due to higher fuel costs, which TVA adjusts each month to reflect the changing price of natural gas, coal and purchased power used to generate its electricity.

The winter storm that cut off power for millions of Tennesseans just before Christmas is also being blamed for pushing up power bills for TVA customers next month.

The monthly fuel cost adjustment by TVA is going up again next month, adding an extra $5.72 to the monthly light bill for the typical EPB residential customer in Chattanooga during February.

TVA spokesman Scott Brooks said TVA fuel costs jumped during Winter Storm Elliott, when temperatures fell at a fast rate and left TVA without enough power to meet the surge in demand on Dec. 23-24. With its biggest coal plant idled by frozen lines and wind damage, TVA had to limit power delivery to its customers for the first time in its 89-year history, and the federal utility scrambled for days to buy power on the grid at premium prices.

"We are seeing the effects of the record demand and winter storm in the February adjustment," Brooks said in a statement Friday. "The February fuel rate is 89% higher than the three-year average, mostly due to higher commodity prices."

Even though TVA required local power companies to reduce their electricity use on the two days before Christmas, natural gas, coal and purchased power costs all rose last month and remain much higher than in recent years.

"Natural gas prices, in particular, are still very volatile in both directions," Brooks said.

TVA has not raised its base rates since 2019 and has pledged to keep its base rates constant over the next decade. But the federal utility adjusts part of its power prices each month based upon what it has and expects to pay for fuel and purchased power.

Natural gas prices jumped this past month, particularly on the spot market, when total consumption of natural gas in the United States reached a daily record high of 141. billion cubic feet, exceeding the previous daily record high of 137.4 billion cubic feet set on Jan. 1, 2018, according to data from S&P Global Commodity Insights.

The fuel cost adjustment planned by TVA for next month is still 12.1% below the peak levels reached last summer, when higher natural gas prices pushed electricity rates in the Tennessee Valley to an all-time high.

Nationwide, the typical American household paid 14.3% more for electricity last year than in 2021, more than double the overall 6.5% rise in prices, according to Consumer Price Increase data released Jan. 12 by the U.S. Bureau of Labor Statistics.

The price of residential electricity is projected in the coming years to rise more slowly. The Energy Information Administration predicted this month that electricity prices nationwide will rise in 2023 by only 2.5% this year to 15.45 cents per kilowatt-hour.

But in Chattanooga, EPB's effective power rate, combining both basic and fuel cost charges, will still be up in February by nearly 13.2% above a year ago, according to EPB. For the typical residential customer using 1,295 kilowatt-hours of electricity a month, the higher fuel cost adjustment will mean power bills next month will be $13.79 higher than they were in February 2022.

EPB President David Wade told directors of the EPB board Friday that the local utility works with customers who are struggling to pay their bills and offers a levelized payment plan to help consumers pay the same amount each month for power despite varying usage and fuel cost adjustments each month.

Wade also said EPB is trying to limit the monthly peak charges it pays to TVA with its own solar power generation and battery storage. TVA allows its local power companies like EPB to generate up to 5% of their own power in exchange for the local utilities signing rolling 20-year power purchase contracts for most of their power from TVA,

Last year, EPB selected EDF Renewables North America to provide 15 megawatts of solar power generation from a pair of solar farms planned in north Hamilton County. EPB also has a 1.35-megawatt solar array near its EPB Distribution Center and has 7 megawatts of battery storage. Wade said EPB plans to add another 8 megawatts of storage to help it store power during low-demand periods and dispatch needed power during hot afternoons in the summer or on cold winter mornings when electricity usage surges.

"Having battery storage absolutely helps us almost every day and anytime we have an event like we did before Christmas or even when we have a tree fall on one of our lines, it can really help us," Wade said

Wade said EPB's battery storage helped EPB to achieve the 5% reduction in power load on Dec. 23 without resorting to rolling blackouts like many other local power companies in TVA'sseven-state service territory. But on Dec. 24, when TVA ordered a 10% cut in power load by all its customers, EPB had to cut off power for short periods to more than 100,000 of its customers in the first such widespread power outages in EPB's history.

Contact Dave Flessner at or 423-757-6340.