The Tennessee Valley Authority will lower its electricity prices again next month as heavy rains and a weak economy combined to lower fuel costs for America's biggest government utility.
TVA will cut its monthly fuel cost adjustment in February enough to lower the average residential power bill in Chattanooga by about $1.96, or 1.4%, less than a year ago. TVA has not raised its base power rates in nearly two years and next month's projected fuel cost portion of the electricity bill is projected to be 17% less than the average for February over the previous three years.
"The lower fuel rate is primarily due to expectations for higher hydro generation and lower projected sales in February," TVA spokesman Scott Brooks said Thursday.
Following record rainfall in the Tennessee Valley in 2020, hydro generation at TVA's 29 power-generating dams is producing more than 10% of TVA's electricity without any fuel expenses.
According to TVA, the Tennessee River Basin received around 70.36 inches of rain in 2020, which is 39% above normal. Last year followed two other years for above-average rainfall in 2019 when 66.47 inches of rain fell in the Valley and in 2018 when 67.01 inches fell during the year.
TVA and other utilities are also benefiting by cheaper natural gas prices and increased generation from nuclear power, which does not have as big of fuel expense as does electricity generation from fossil fuels like coal and gas. Additionally, with power demand down due to a slower economy, TVA is not having to buy as much purchased power on the grid from other utilities or activate its combustion turbines which tend to have higher generating costs.
With cheaper fuel passed along to customers in the monthly fuel cost adjustment, TVA's delivered cost of wholesale power is now cheaper than it was a decade ago. In the past year, TVA President Jeff Lyash said electricity utilities nationwide, on average, raised power rates about 1.7% while TVA has reduced its power bills.
TVA has also pledged to maintain its base electric rates stable for at least the next decade.
In Chattanooga, EPB said the typical residential customer who uses 1,295 kilowatts of electricity in a month will pay $137.77 for electricity next month, down from $138.91 this month and $139.73 a year ago.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.