Unusually warm winter temperatures and more normal rainfall last month combined to cut the price of electric power in the Tennessee Valley next month.
Electric rates by EPB in Chattanooga will be 1.1 percent lower in March than they are in the current month, saving the average Chattanooga household $1.57 on the average monthly light bill.
But because of increases in base rates during the past year, electric rates in Chattanooga area are still up by 3.4 percent from a year ago, costing the average Chattanooga household an extra $4.54 next month compared with March 2016.
"Mild temperatures in January led to lower than expected power demand, which contributed to the decrease in fuel costs from the previous month," TVA spokesman Scott Brooks said. "Hydro generation was also higher than expected in January."
TVA's 29 hydroelectric dams generate the utility's cheapest source of power, but their output is dependent upon runoff into TVA reservoirs and rivers in the 7-state region. Despite last year's drought, rainfall in January filled reservoirs to their normal wintertime levels, TVA Chief Financial Officer John Thomas said.
As a result of more cheap hydro power and less purchases of more expensive generation from outside the Valley, the average monthly electric bill for an EPB residential customer that uses 1,295 kilowatthours will be $138.30 next month, compared with $140.40 for the same power usage this month. But bills will still be higher than $134.29 charged for such consumption a year ago, EPB spokesman John Pless said.
"Our job is to deliver electricity at the lowest feasible rate and everything we do is focused on that and stems from that," TVA President Bill Johnson told agency directors during the quarterly TVA board meeting Thursday in Gatlinburg. "The sale of electricity funds all of TVA's operations since we no longer receive any taxpayer appropriations."
Johnson said TVA has cut its annual operating costs by $800 million over the past four years to help stabilize rates and pay for record high investments in new power plants and pollution controls. TVA has phased out more than 2,000 jobs since Johnson became TVA CEO in 2013.
"We're investing in our power system while managing debt to ensure that TVA continues to supply reliable, clean energy to the region," Johnson said. "We will continue to identify ways to reduce our costs, improve our efficiency and manage debt."
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.