Energy costs are typically higher during July with more travel and gasoline use and higher electricity consumption as a result of higher air conditioning usage during the heat of the summer.
But Chattanoogans are getting a reprieve on their energy bills this summer compared with a year ago with the price of both gasoline and electricity down from the elevated levels reached in 2022.
Electricity prices will again edge slightly higher in July along with the expected temperatures next month. But EPB says the average household power rate next month will still be down by 10.4% from a year ago due to a drop in fuel cost adjustments on monthly electric bills.
At the same time, Chattanooga gasoline prices at the pump are down, on average, nearly $1.37 a gallon from where they were a year ago.
In a new survey released Monday, GasBuddy said the average price of regular gas in Chattanooga fell by 8 cents a gallon in the past week. The $3 average price per gallon for regular gas in Chattanooga on Monday was 39 cents a gallon below the U.S. average.
Last summer, gasoline prices soared to record highs in Chattanooga after the war in Ukraine cut off Russian oil supplies to the West and a travel rebound coming out of the pandemic boosted fuel demand. The average price of regular gas in Chattanooga jumped to an all-time high of $5.02 a gallon on July 14, 2022, and has since dropped by more than 40%.
Patrick De Haan, head of petroleum analysis at GasBuddy, said prices at the pump could decline even more in the coming weeks, although the upheaval in Russia threatens to again disrupt some markets.
“Ultimately, we could see the national average nudge a bit lower in the week ahead, should oil prices fail to rally,” De Haan said in a report Monday. “But, with developments including the Wagner group destabilizing and testing Russia, there can always be last-minute shifts that impact prices, which we continue to watch for and hope the market remains calm.”
Even with the price drop from last year’s record high, gasoline prices in Chattanooga this week are still 29 cents a gallon higher than where they were two years ago and are up $1.04 a gallon from the level reached in 2020 when COVID-19 shut down most travel activities.
Electricity prices also rose last summer to record highs in Chattanooga when the price of natural gas and coal spiked after the war in Ukraine reduced global supplies of such fuels. Although EPB has not raised its local share of electricity rates since 2015 and the Tennessee Valley Authority has kept its base rates constant since 2019, TVA has raised the monthly fuel cost adjustment to reflect the higher costs of fuels used to generate its power.
The fuel cost adjustment rose to an all-time high last summer, but TVA spokesman Scott Brooks said such prices have also moderated with cheaper fuel this year. The fuel cost adjustment of TVA bills will edge up slightly next month from the current level but will still be nearly 35% lower than a year ago, Brooks said.
“The fuel cost for July is going up only slightly from June to reflect expected warmer weather, but it is significantly below a year ago,” Brooks said in an emailed statement.
Brooks said an increase in the sales forecast is also contributing to the higher fuel rate. Sales in July are expected to be 8.4% higher, compared to the three-year average.
EPB said the typical household using 1,295 kilowatt hours of electricity a month will pay $15.91 less next month than what was paid a year earlier, according to EPB spokeswoman Sophie Moore.
Under a new budget plan adopted Friday, EPB is also planning about a 4% increase in its base rates in October, which will add about $5 a month to the typical residential electricity bill in Chattanooga, Moore said.
Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.
Staff photo / Ben Michaels pumps gas into his car at the Speedway gas station on the corner of South Holtzclaw Avenue and East Third Street on Oct. 11, 2021, in Chattanooga. Prices at the pump are down $1.37 a gallon from a year ago.