Abundant rains and cheaper natural gas will hold down the cost of electricity next month in Chattanooga.
The Tennessee Valley Authority said Monday the fuel cost portion of electricity bills will drop by 7.1 percent in December. For the typical Chattanooga residential customer of EPB, the drop in the monthly fuel cost adjustment will cut December electricity bills by $2.27 from what it would otherwise be without the rate adjustment.
"The overall system average fuel rate is approximately 14 percent lower than the three-year average December fuel cost adjustment," TVA spokesman Scott Brooks said. "The decrease is primarily due to higher expectations for hydro generation and lower natural gas rates compared to prior years."
So far this year, rainfall in Chattanooga has already reached the usual total for the entire year. Through last week, precipitation in Chattanooga had totaled nearly 52 inches, or 7.23 inches more than normal for this time of year.
Heavier rains allow TVA to generate more power from the utility's 29 power-generating dams.
Natural gas prices also have dropped about 40 percent from a year ago, providing cheaper fuel to power TVA's combustion turbines and combined cycle gas plants.
Colder weather in December is still likely to push up next month's power bills from the November charges for most homeowners, however.
Additionally, base rate increases in the past year by both the Tennessee Valley Authority, which supplies electricity in its 7-state region, and EPB, which distributes electricity in a 600-square-mile region of Chattanooga, will keep December rates this year well above a year ago.
For the typical EPB residential customer who uses 1,461 kilowatt hours in a month, next month's power bills from EPB will total $153.25, or 5.1 percent more than the cost of that same amount of power in December 2014, EPB spokesman John Pless said.
The price break for winter heating will be even bigger for homeowners who heat with sources other than electricity. The U.S. Department of Energy projects that winter heating bills in the coming months will be 25 percent cheaper for those using heating oil, 18 percent less for those relying upon propane and 10 percent cheaper for those who heat with natural gas.
Brooks said TVA's major industrial customers will enjoy even lower power rates next month under TVA's revised rate schedule implemented last month, although their fuel costs are down only 5.3 percent from November's average.
TVA revised its rates for fiscal 2016 to give more of the benefits of cheaper fuel costs to industrial customers, which a cost-of-service study determined could be served for less than most residential and commercial customes, Brooks said.
The December 2015 total monthly fuel cost will be 1.927 cents per kilowatt hour for residential and business customers, and 1.825 cents per kilowatt hour for non-standard service customers, which includes large industrial customers served both by TVA and local power companies.
In the current month, TVA fuel cost adjustment charges total 2.074 cents per kilowatt hour for residential and business customers and 1.998 cents per kilwatt hour for large industrial customers.