The price of power at the electric meter will be slightly higher next month in Chattanooga, but fuel prices at the pump continue to trend lower as energy costs remain muted during the coronavirus pandemic.
The monthly fuel cost adjustment by the Tennessee Valley Authority will raise the price of electricity slightly in October from the current rate, although electric rates are still below what they were a year ago.
For the typical residential customer of EPB in Chattanooga using 1,295 kilowatt-hours of electricity in a month, October’s light bill will be $2.15 higher, or about 1.6% more, than the price for the same amount of power usage this month. But the average residential EPB bill for that same customer will still be down by $1.36, or nearly 1%, from a year ago, according to EPB spokeswoman Scottie Summerlin.
TVA spokesman Scott Brooks said higher power usage last month pushed TVA to use more expensive sources of energy and adjust the monthly fuel cost change upward. But next month’s electricity prices are still lower than five years ago for most TVA customers.
The overall system average fuel rate for October is approximately 12% lower than the three-year average October fuel cost,” Brooks said. “The lower fuel rate is primarily due to lower projected sales for October and lower purchased power and gas rates.”
The fuel portion of TVA power bills has remained below 1.5 cents per kilowatt-hour since March as the federal utility has benefited from abundant hydroelectric generation from historically high rainfall this year and from cheaper natural gas prices. Hydro generation from TVA’s 29 power-generating dams on the Tennessee River supplies the cheapest power for TVA.
TVA directors voted last month to keep TVA’s base rates unchanged for a second consecutive year and voted to grant another 2.5% rebate to local power companies like EPB as part of a $200 million pandemic relief program. A year ago, TVA granted EPB and other local power companies a 3.1% rebate for signing a long-term power purchase agreement with TVA.
Fuel prices have also been held down by sluggish demand due to lower consumption during the coronavirus pandemic, which has limited travel and energy use by some industries.
Chattanooga gas prices dropped by an average of 2 cents a gallon last week to $1.81 a gallon, according to GasBuddy’s daily survey of 170 stations. Gas prices in Chattanooga are 50.4 cents per gallon lower than a year ago and remain 35 cents a gallon below the U.S. average price of $2.16 for a gallon of regular fuel.
Patrick De Haan, head of petroleum analysis for GasBuddy, said gas prices “remain at the lowest prices seasonally since 2004 in most states, and largely, motorists can expect that to continue.”
Contact Dave Flessner at email@example.com or at 423-757-6340