Despite an increase Monday in oil prices following the Iranian seizure of an English tanker, gas prices still fell in the past week and electricity prices will get cheaper next month in Chattanooga as energy markets continue to benefit from an abundance of supply.
With rainfall in Chattanooga nearly 15 inches above normal so far this year, the 29 hydroelectric dams on the Tennessee River and its tributaries are providing extra cheap power for the Tennessee Valley Authority. As a result, residential electric rates in Chattanooga will drop by more than 1.7% next month due to a drop in the fuel cost portion of power bills.
The typical residential homeowner using 1,295 kilowatthours of electricity will pay $2.47 less next month than the current rate, according to EPB. Despite a nearly 2% increase in wholesale power rates implemented with the start of the current fiscal year, August power bills this year in Chattanooga should still be cheaper than a year ago with the typical residential customer paying 75 cents less than a year ago, according to the newly released fuel cost adjustments by TVA for Chattanooga's EPB.
"The overall system average fuel rate for August is approximately 17% lower than the three-year average August fuel cost," said Scott Brooks, a spokesman for the Tennessee Valley Authority. "This is primarily due to higher expectations for hydro generation and lower purchased power and gas rates expected in August."
TVA is cutting its monthly fuel cost adjustment for August to the lowest level of any August since the fuel charge was added six years ago.
Paying for power
For a typical residential EPB customer using 1,295 kilowatts of electricity, the monthly bill is: * $139.56 in August 2019 * $14203 in July 2019 * $140.31 in August 2018 Source: EPB
Chattanooga motorists also are enjoying cheaper prices at the pump than a week ago.
Chattanooga gas prices fell 4.6 cents per gallon in the past week, averaging $2.42 per gallon at the start of the week, according to GasBuddy's daily survey of 170 stations. Gas prices in Chattanooga are 19.6 cents per gallon higher than a month ago, yet stand 11.1 cents per gallon lower than a year ago.
Chattanooga gas prices average 8 cents a gallon less than the statewide average for Tennessee and 34 cents per gallon below the U.S. average.
"Average U.S. gas prices drifted lower this week as oil's downturn has picked up steam thanks to a smaller than expected decline in U.S. oil inventories and concerns remain over the strength of the U.S. economy," said Patrick DeHaan, head of petroleum analysis for GasBuddy. "Oil largely ignored Iran's attempt to make waves in the Strait of Hormuz last Friday but we may see some impacts in the week ahead, though over the weekend some behind the scenes signs emerged that some parties were trying to de-escalate the rising tensions."
Paying less at the pump
The average price of a gallon of regular gas fell last week to an average of:* $2.42 a gallon in Chattanooga, down 4.6 cents a gallon in the past week* $2.50 a gallon across all of Tennessee, down 1.8 cents a gallon in the past week* $2.76 a gallon nationwide, down 3.5 cents a gallon in the past weekSource: GasBuddy.com
DeHaan said he expects gas prices to drift lower for the first part of the week, but he said they may move up later this week.
Oil prices traded higher Monday as global tensions with Iran continue to escalate, sparking concerns about supply.
West Texas Intermediate futures rose 1.1% to $56.22 a barrel on the New York Mercantile Exchange on Monday. Brent crude, the global benchmark, gained 1.3% to close at $63.26 a barrel on London's ICE Futures exchange.
The gains follow news of the seized British tanker.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.