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Winter heating bills dropWarmer weather, cheaper gas and electricity saves consumers

Cheaper winter heating bills

* Warmer weather: This week's 70-degree-plus temperature highs are more than 20 degrees above normal in Chattanooga

* Cheaper natural gas: AGL Resources, the parent company of Chattanooga Gas, projects the fuel-portion of its bills will be down about 20 percent this year over last.

* Mixed electricity prices: The Tennessee Valley Authority says its January fuel cost adjustment will be down about 15 percent from the average of the past three years and overall rates next month will by 0.4 percent below their current levels. But due to base rate increases earlier this year by both EPB and TVA, Chattanooga residential electricity rates next month will still be 3.7 percent above the same time a year.

Today's balmy 70-degree-plus temperatures may not seem like Christmas in Chattanooga, but the warmer weather should pay off next month when all those holiday-related credit card bills come due.

This winter is shaping up to be far warmer, and cheaper, for most Chattanoogans. A milder winter and cheaper fuel and electricity prices should trim what homeowners pay to heat their houses this winter, depending upon their usage and how the rest of the winter weather fares.

So far, the winter of 2015 that officially began Monday is shaping up as one of the warmest on record. Today's high is expected to be more than 20 degrees above normal, cutting the amount of fuel or electricity used to heat homes during the first few days of winter this week.

In addition to a drop in consumption, consumers also are benefiting from a drop in fuel and power generation costs.

AGL Resources, the parent company of Chattanooga Gas, estimates the fuel portion of gas bills this winter will be about 20 percent below a year ago. Natural gas futures for February dropped last week to $1.87 per million BTUs — the lowest price in 16 years. Futures advanced this week above $2 per million BTUs but were still only about half of the year-ago price of $3.91 per million BTUs.

"This is the perfect storm to drive natural gas prices down to where they are now," said Nicholas Potter, natural gas analyst with Barclays. "The industry needed some cold weather to use some of this excess supply and they're getting warm weather instead."

Alan Lammey, senior energy market analyst for PointLogic Energy, said natural gas consumption increases in the winter, due to heating needs, and the summer, when air conditioning drives up demand for electricity. Prices are typically low in the spring and fall.

"To have prices this low in the winter is really significant. We've got way, way too much supply and not enough demand," Lammey said last week during the low point for gas prices.

Next month, the Tennessee Valley Authority also will cut its monthly fuel cost adjustment for the coldest month of the year for the first time in four years. Cheaper natural gas and coal have cut the cost of fuel burned to generate electricity and above-average rains are providing more of TVA's cheapest power source — hydroelectricity generated from TVA's 29 power generating dams.

TVA spokesman Scott Brooks said the monthly fuel cost adjustment for January will be 15 percent below the average for the past three years.

Rainfall in 2015 has been nearly 10 inches above normal in Chattanooga. As a result, TVA has been running its hydro units nonstop through most of December and continues to spill water through most of its mainstream dams on the Tennessee River to limit chances of flooding in the region.

At the Chickamauga Dam in Chattanooga on Thursday, 30,000 cubic feet per second of water was flowing through the hydro units and the 10 gates that were partially opened to bring down rain-swollen reservoirs above Chattanooga, TVA spokesman Scott Fiedler said Thursday.

TVA normally generates about 10 percent of its power from its hydro dams and the extra rainfall helps lower TVA fuel expenses.

"Fuel costs were lower than anticipated due to lower than expected sales and higher TVA hydro generation," Brooks said. "With more hydro generation, TVA was able to rely less on higher cost resources."

Despite the drop in the monthly fuel cost adjustment for TVA next month, however, base rate increases by both TVA and EPB earlier this year will still mean higher electricity rates in January in Chattanooga than a year ago.

The average Chattanooga home that heats with electricity and uses 1,461 kilowatthours of power will pay $152.70 next month. That is 55 cents below the rate charged for such power this month, but still $5.96, or 3.7 percent, more than what such a homeowners paid in January 2015 for that amount of electricity.

The Associated Press and other wire services contributed to this report.

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340.

Cheaper winter heating bills

' Warmer weather: This week's 70-degree-plus temperature highs are more than 20 degrees above normal in Chattanooga

' Cheaper natural gas: AGL Resources, the parent company of Chattanooga Gas, projects the fuel-portion of its bills will be down about 20 percent this year over last.

' Mixed electricity prices: The Tennessee Valley Authority says its January fuel cost adjustment will be down about 15 percent from the average of the past three years and overall rates next month will by 0.4 percent below their current levels. But due to base rate increases earlier this year by both EPB and TVA, Chattanooga residential electricity rates next month will still be 3.7 percent above the same time a year.

Sources: National Weather Service, AGL Resources, Tennessee Valley Authority

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