Oil prices may be headed higher, but electricity users in the Tennessee Valley will enjoy lower power bills next month.
The Tennessee Valley Authority is cutting its monthly fuel cost adjustment in May to the lowest level in six years and one of the lowest on record since TVA began calculating its monthly fuel expenses on bills in 2006.
"The overall system average fuel rate is approximately 34 percent lower than the three-year average May fuel cost," TVA spokesman Scott Brooks said. "The primary reasons are recent mild weather and lower natural gas prices than in prior years."
For the typical Chattanooga household that uses 1,461 kilowatt- hour of electricity, monthly power bills will drop by $1.30, or 0.9 percent, from the current month, according to EPB. Next month's electricity rates will be $2.13 less than bills from a year ago for the typical EPB residential customer, even though both TVA and EPB had base rate increases in their electricity rates in the past year.
The fuel portion of TVA's bills will average 29 percent less next month than what they were in May 2015.
Brooks said TVA fuel cost adjustments have been lowered 12 times in the past 18 months as demand for power has remained limited, helping TVA to avoid costly production or purchases of peak load generation.
Petroleum prices also are the lowest for May in a dozen years. Although oil prices have jumped by nearly a third from the low prices reached in February, the U.S. Energy Information Association projects the average price of a gallon of regular unleaded gasoline will still be around $2.04 nationally this summer, 59 cents per gallon cheaper than last year. Those gas savings are projected to save the average household $350 this summer.