Fuel Costs Push Up TVA Electric Rates

By Dave Flessner, Chattanooga Times/Free Press, Tenn.

Sep. 22–The average Chattanooga homeowner will pay another $4.36 for electricity next month as part of the cost of the drought across the Tennessee Valley, officials said Friday.

EPB will raise the price of the electricity it sells about 4.6 percent, effective Oct. 1. The rate increase is the fourth in as many quarters from a fuel cost-adjustment plan started in 2006 by the Tennessee Valley Authority, which supplies electricity to EPB and 158 other municipalities and electric co-ops in a seven-state region.

“This is by far the biggest fuel cost increase yet,” EPB Executive Vice President Ron Fugatt said.

For a typical household that uses 1,200 kilowatt-hours of electricity a month, the monthly light bill will increase from $94.63 to $98.99, Mr. Fugatt said.

TVA officials blamed the prolonged drought for the higher fuel costs. Power generated at TVA’s 29 hydroelectric dams — the least expensive source of electricity for the federal utility — has been cut by 40 percent during what has been the driest year in the Tennessee Valley since 1986, according to TVA President Tom Kilgore

To make up for the lost power from the Tennessee River and its tributaries, TVA has had to buy more expensive power from other utilities, officials said.

“We are working hard to manage our resources and costs during these extraordinary conditions, but there is no way for us to avoid buying more power to offset the significant loss of hydro production,” Mr. Kilgore said.

The higher rates come as electric users are getting their bills for the hottest August on record in Chattanooga. EPB President Harold DePriest said EPB set a new record for peak consumption last month at 1,302 megawatts, eclipsing EPB’s previous record set more than three decades ago. EPB’s electric sales in August were 15 percent above normal as air conditioners ran more frequently to cope with the prolonged heat wave.

The hot weather boosted electricity sales in Chattanooga by $5.7 million above normal in August. But so far, Mr. DePriest said, there has not been an abnormally high number of customers late in paying their power bills. In fact, EPB’s share of delinquent accounts is less than half the average for all TVA distributors, Mr. DePriest said.

“We’re really good at working with people who try to pay their bills,” he said.

E-mail Dave Flessner at dflessner@timesfreepress.com

—–

To see more of the Chattanooga Times/Free Press, or to subscribe to the newspaper, go to http://www.timesfreepress.com.

Copyright (c) 2007, Chattanooga Times/Free Press, Tenn.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.