Motorists may be enjoying cheaper gas prices at the pump, but electricity prices will edge higher next month as summertime temperatures push up air conditioning use.
The Tennessee Valley Authority plans to boost its power rates under its monthly fuel cost adjustment next month by nearly 0.9 percent, pushing up the average residential power bill in Chattanooga by $1.22 in June for a typical household using 1,295 kilowatt hours of power. Power rates for the month are still up only a fraction - about 43 cents for the typical household served by Chattanooga's EPB - as power rates have remained relatively stable over the past five years.
"The total monthly fuel cost is going up slightly in June but is still below the 3-year average," TVA spokesman Jim Hopson said. "This is not unexpected, as we are coming into the summer peak period. The overall system average fuel rate for June is approximately 8% lower than the three-year average June fuel cost, primarily due to higher expectations for hydro generation and lower gas rates in June."
TVA, the federal utility which supplies electricity to part of seven Southeastern states, adjusts part of its monthly power rates based upon the cost of fuel to generate that power. In summertime peak demand periods, TVA has to turn to more expensive purchased or gas turbine generators for some of its power., raising both sales and power rates under the fuel cost adjustment formula.
TVA electric rates are still among the bottom 25% of power charges for all U.S. utilities, according to the Energy Information Administration.
EPB said the typical residential household using 1,295 kilowatt hours of electricity will pay $140.57 in June, up from the average bill of $139.35 last month.
While electricity rates are rising for the nearly 9 million persons served by TVA, gas prices at the pump remain muted as oil prices drop in the wake of trade and economic concerns.
Chattanooga prices for regular gas were are unchanged in the past week, averaging $2.37 per gallon, according to GasBuddy's daily survey of 170 stations. Gas prices in Chattanooga are 13.5 cents per gallon lower than a month ago and 26.9 cents per gallon lower than a year ago.
"With the summer driving season kicked off, gasoline prices have continued to moderate with nearly all areas off their 2019 high water mark with more declines on the way," said Patrick DeHaan, head of petroleum analysis for GasBuddy. "Overall, the biggest risk factors for rising gas prices this summer: unexpected refinery outages mainly in challenged areas like the Midwest or West Coast, a potential trade deal between the U.S. and China, and any rise in Middle East tensions, mainly between the U.S. and Iran. Otherwise, expect this summer's gas prices to be similar but lower than they were last year."
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.
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