The Tennessee Valley Authority is taking advantage of abundant rainfall, milder temperatures and cheaper fuel to lower its electricity prices next month.
TVA is cutting its fuel cost adjustment in February to the lowest for that month in the seven years that TVA has had its monthly fuel cost adjustment. TVA is not raising its base rates in the current fiscal year and has offered a 3.1% rebate to local power companies that sign 20-year purchase agreements with TVA.
The utility adjusts a portion of its power charges each month based upon the cost of the fuel used to generate electricity, but those costs have been held down by the drop in the price of coal and natural gas and abundant hydro and other renewable power sources.
"The overall system average fuel rate for February is approximately 15% lower than the three-year average February fuel cost," TVA spokesman Scott Brooks said. "This is primarily due to lower than forecast purchased power and gas rates and higher expectations for hydro generation in February."
After the two wettest years in TVA history in 2018 and 2019, the new year has begun with above average precipitation. That is swelling production at TVA's 29 power-generating dams by more than 16% above normal this month.
Hydroelectric generation is TVA's cheapest source of power. Milder winter temperatures also have limited how much power TVA must purchase or generate from its most expensive combustion turbines.
As a result, electricity rates for EPB customers in Chattanooga will be 1.9% cheaper than the current and 2.1% below year-ago prices. The typical residential customer of EPB using 1,295 kilowatthours of electricity will be charged $1.39.73 in February, or $2.67 less than the charge this month for households using the same amount of power.
After finishing a second reactor at its Watts Bar plant four years ago and adding more generation at it Browns Ferry nuclear plant in the past couple of years, TVA has pledged to try to avoid any base rate increase for the next decade. TVA gets nearly 40% of its power from its seven nuclear reactors, which have less expensive fuel that fossil plants, and the utility has a mix of other power generation from natural gas, coal, hydro, wind, solar and purchased power.
"TVA's planned mix of low-cost nuclear, hydro and natural gas power generation is a benefit to the people of the Tennessee Valley," Doug Peters, president of the Tennessee Valley Public Power Association, said Thursday in response to the drop in February's fuel cost adjustment. "Local power companies across the Valley and their customers will benefit from that combination and the good fortune of heavy rains and low natural gas prices early this year."
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.