Consumers trying to cope with the economic fallout from the growing COVID-19 epidemic are getting some reprieve in what they pay for energy.
The Tennessee Valley Authority will reduce the fuel cost portion of electric bills in its 7-state region next month to the lowest April level since TVA began its monthly fuel adjustments eight years ago.
TVA is benefiting by falling gas and coal prices and near record rainfall that is boosting hydroelectric generation from its 29 dams. TVA also has expanded its nuclear generation which relies upon less expensive fuel than the coal- or natural gas-powered generation that it is replacing.
"April is the lowest fuel cost since the current calculation began in 2012, and one of the lowest on record since the fuel cost began being calculated separately in 2006," TVA spokesman Scott Brooks said.
For the typical Chattanooga household, the monthly power bill in April will be down about 2% from both the current rate and rate charged a year ago, according to EPB spokeswoman Scottie Summerlin. The average EPB monthly residential bill for using 1,295 kilowatthours of electricity will decline by $2.70 in April to $136.90.
Consumers are also benefiting by cheaper prices at the pump. The price of regular gas fell Friday at the Sam's Club in Ooltewah to only $1.58 per gallon and the average price of gas in Chattanooga was the lowest since the end of 2018, according to surveys of area gas stations by GasBuddy.com.
U.S. crude oil prices plunged Friday by about 21% and moved below $20 a barrel for first time since February 2002.
Nationwide, some analysts foresee gas prices falling to the cheapest level on record, when adjusted for inflation.
Cheaper fuels helps not only motorists by utilities that generate power from natural gas or coal.
Although TVA has pledged to keep its base rates contant for the next decade, the utility adjusts a porton of consumers' bills each month based upon the changing cost of the fuel used to generate TVA's power. After two of the highest rainfall years on record in the Tennessee Valley, TVA has achieved above-average hydro generation from its dams, the cheapest source of TVA power without any fuel costs. The depressed energy market amid concerns over the coronavirus has also cut the prices for natural gas and coal.
TVA's overall system average fuel rate for April is approximately 23% lower than the three-year average April fuel cost.
The April fuel cost continues a trend of declining fuel costs for consumers that goes back to TVA's investment in a diverse generation mix, which allows us to take full advantage of lower priced fuel sources such as natural gas," Brooks said.
Contact Dave Flessner at email@example.com or at 423-757-6340.