Gasoline prices rose nearly 2 cents a gallon in Chattanooga last week to their highest level in four years, but consumers may get some reprieve in coming weeks from other energy bills.
Oil prices fell Monday, and the Tennessee Valley Authority is preparing to cut its rates slightly Thursday when the monthly fuel cost adjustment for June takes effect.
The average EPB residential power bill in June will be down 56 cents from the current rate and virtually unchanged from a year ago due to a drop in TVA's fuel costs offset by a nearly 2 percent wholesale base rate increase adopted last fall.
TVA spokesman Scott Brooks said the federal utility is benefiting from cheaper natural gas prices and higher rainfall that has boosted production of its cheapest source of power generation — hydroelectric power generated from TVA's 29 power-producing dams.
"The overall system average fuel rate for June is approximately 7 percent lower than the three-year average June fuel cost," Brooks said. "This is primarily due to expectations for lower gas rates and lower sales projections for June."
The typical Chattanooga household using 1,295 kilowatt-hours of power will pay $140.14 in June, down from $140.70 this month.
In contrast to falling electricity rates, gasoline prices continued to rise in the past week, jumping to an average in Chattanooga of $2.64 a gallon, according to GasBuddy's daily survey of 170 gas outlets in Chattanooga. Chattanooga gas prices remain 32 cents per gallon below the U.S. average of $2.96 a gallon on Monday when GasBuddy did its weekly price survey. But local prices at the pump were still up 15.5 percent a gallon from a month ago and were 60.6 cents per gallon higher than a year ago.
Oil prices did drop along with stock prices on Monday, however. U.S. crude oil fell 1.7 percent to $66.73 a barrel in New York. Oil prices have slumped in the last week following reports that OPEC countries and Russia could start pumping more oil soon. Brent crude, used to price international oils, rose 0.1 percent to $75.39 a barrel in London.
"As the summer driving season gets underway, there's reason to be optimistic and perhaps happy: OPEC appears ready to raise crude oil production to meet higher global demand, dashing at least for now, the likelihood of seeing the national average hit that ugly $3-a-gallon mark," said Patrick DeHaan, head of petroleum analysis for GasBuddy. "For now, the national average peaked just under that level and prices are now starting to move ever so slowly lower, but more drops are coming."
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