TVA rate cut will benefit PEC customers
Plateau Electric Cooperative representatives are calling a fuel cost adjustment decrease by the Tennessee Valley Authority “good news.”
While the amount saved on consumers’ bills will depend on the amount of kilowatt hours used, a news release by PEC said that residential consumers can expect a decrease that ranges from about $4 to $9 in their monthly power bills, beginning April 1.
Overall, the rate decrease for the quarter will be about 7% on total average wholesale rates, which is a reduction of almost 40% from the current quarter’s fuel cost adjustment amount. For the second quarter, which begins April 1, the fuel cost adjustment will decrease about 0.5 cents per kilowatt hour, from more than 1.3 cents to 0.8 cents.
“In these economically challenging times, we are especially glad lower fuel costs will provide some relief in power costs to the consumers in the Tennessee Valley,” TVA CEO Tom Kilgore said. “Unusually cold weather this winter has meant higher consumption of electricity and higher power bills even for people who keep their thermostats low.”
The fuel cost adjustment is based on the price of fuels used to make electricity and current economic conditions. Increased rainfall also contributes to lower fuel and purchased power costs.
According to TVA, coal prices have not decreased as rapidly as other fuel prices, preventing the utility’s costs from dropping further. About 60% of TVA’s power supply comes from fossil fuels — primarily coal, along with oil and natural gas.
In fiscal year 2008, approximately 40% of TVA’s total revenue — $4.2 billion — was spent on fuel and purchased power. During the first quarter of the current fiscal year, TVA spent $1.4 billion on fuel and purchased power costs.