May 21—As higher temperatures push up air conditioning and power usage next month, Chattanoogans will feel the heat this summer with electricity prices projected to be nearly 10% higher than a year ago.
EPB will boost its average power rates again in June to cover higher monthly fuel cost adjustment by the Tennessee Valley Authority to cover soaring natural gas prices. Although TVA's price increases are below most of the country, residential customers of EPB will pay 9.4% higher rates next month than they did a year ago, costing the typical household another $11.93 on their monthly power bill compared with a year ago.
After Russia invaded Ukraine and the West began a boycott of Russian gas producers, global natural gas prices have more than doubled, rising to the highest level since 2008.
The June fuel rate for TVA is 69% higher than the average of the past three years, "mostly due to higher gas and purchased power rates" which could go even higher this summer, TVA spokesman Scott Brooks said.
"There has been persistent upward and volatile movement in natural gas markets, and the monthly fuel cost will likely remain elevated for upcoming months," Brooks said in a statement on the monthly fuel cost changes.
TVA has not raised its base electricity rates since the fall of 2018 and EPB has not adjusted its base power rates since 2013. At a EPB board meeting Friday, EPB President David Wade said the municipal utility will continue to hold the line on its base rates for another fiscal year, although monthly fuel cost adjustments will likely continue to push the delivered price of power still higher.
EPB projects the volume of electricity sales in Chattanooga will rise about 1.4% in the next year to $576 million as the region continues to see the addition of more subdivisions and apartments and more use of electric vehicles.
"At a time, when our customers are facing inflation and much higher fuel costs, we will continue to work hard to steward our community's resources to keep electric rates as low as possible for the people we serve," Wade said in presenting EPB's fiscal 2022-23 budget plan to the board. "I think you'll see that higher natural gas prices will probably push prices a little higher and there will continue to be more volatility in the market. But we are in a much better position than most of the country."
TVA generates about 20% of its electricity from natural gas and more than 15% from coal, which also has gotten more expensive in the past year. But a majority of TVA's power comes from its seven nuclear reactors, 29 hydroelectric dams and purchases of solar- and wind-generated power that are not subject to changing fuel costs.
According to the Energy Information Administration, TVA residential power rates are below more than three-fourths of the country and its industrial rates are among the lowest 5% of all utilities.
Contact Dave Flessner at email@example.com or at 423-757-6340.
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