With help from Mother Nature, electric bills in the Tennessee Valley will get a bit cheaper next month.
The Tennessee Valley Authority will cut its fuel cost portion of its wholesale power rates next month to the lowest April level in six years, helping to save the typical Chattanooga household $1.52 on their next monthly electric bill.
Rainy weather and milder temperatures have combined so far this year to boost generation from TVA's cheapest power source - its 29 power-generating dams on the Tennessee River and its tributaries - and to help lower the average cost of natural gas.
"This is the lowest April fuel cost since we started the current calculations in 2013," TVA spokesman Scott Brooks said. "The overall system average fuel rate for April is approximately 10 percent lower than the three-year average April fuel cost. This is primarily due to expectations for higher hydro generation for April combined with mild weather leading to lower sales in February."
Last month was the wettest February on record in the Tennessee Valley with nearly twice the normal rainfall for the month.
According to the U.S. National Weather Service, heating degree days in Tennessee were 23 percent lower than the seasonal norms last month.
For the typical Chattanooga household that uses 1,295 kilowatthours of electricity a month, the drop in fuel costs will cut the monthly power bill from $141.17 this month to $139.65 next month, according to EPB in Chattanooga. April's power rates in Chattanooga will be down 1.4 percent from a year ago, even after TVA implemented a 1.4 percent wholesale rate increase last fall.
Cheaper fuel has helped to keep electric rates relatively stable for TVA over the past five years.
"This is driven largely by having natural gas prices come down and stay down," said Doug Peters, president of the Tennessee Valley Public Power Association, the Chattanooga-based trade group for the 154 local power companies that distribute TVA power in its 7-state region. "That is a direct pass through to the retail customer and we're always happy when we can help keep electric rates low."
Cheaper natural gas has caused some competition for electricity suppliers which compete with natural gas for some residential heating and industrial sales. TVA's overall power demand has been stagnant or declining for most of the past decade due to improved efficiency of appliances, furnaces and machines and alternative power sources from natural gas and renewable energy.
The total monthly fuel cost is what TVA uses to recover the costs of the fuel it utilizes to generate electricity from nuclear, coal, oil and natural gas. The fuel cost allowance represents about one third of wholesale rates and is calculated monthly as generation fuel costs and purchased power costs from other suppliers rise and fall.
Contact Dave Flessner at dflessner@timesfrepress.com or at 757-6340