Gas prices drop for fifth week; TVA cuts fuel cost adjustment
Concerns over a global slowdown and trade war may be hurting some investors, but Chattanooga energy consumers continue to benefit from cheaper gas and power costs.
Gas prices fell for the fifth consecutive week last week, cutting prices at the pump by 24.3 cents per gallon from a month ago and leaving prices at the pump in Chattanooga 33 cents a gallon less than a year ago, according to GasBuddy’s daily survey of 170 stations in
the Chattanooga area.
At the same time, electricity will get cheaper in the Tennessee Valley next month, bringing the price of power back down to where it was a year ago. TVA’s monthly fuel
cost adjustment will drop to its lowest price in September since the utility began adjusting part of its power rates based on fuel expenses.
That will offset the wholesale rate increase TVA adopted last October and leave electric rates at the same price next month as they were a year ago in Chattanooga, according to EPB.
“The September monthly fuel cost will be the lowest amount since we updated the way we calculate it in December 2012,” TVA spokesman Scott Brooks said Monday. “This is the first time it has been below 1.6 cents [per kilowatthour], at least in the last seven years.”
TVA adjusts the fuel cost portion of its wholesale rates every month based on the cost of the fuel it uses to generate electricity at its nuclear, coal, natural gas and other power stations. TVA has benefited this year by above-average rainfall, which has boosted power production from its 29 power-generating dams by more than 26% from a year ago, and the drop in natural gas prices, which fuel more than one fourth of TVA’s power during peak periods.
Brooks said the overall system average fuel rate for September is approximately 18% lower than the three-year average September fuel cost for TVA. That will offset the 2% wholesale base rate increase adopted by TVA last fall and will trim the average EPB residential bill for a household using 1,295 kilowatthours of power by 1.7%, or $1.32 a month, in September.
Chattanooga motorists also will enjoy lower prices at the pump for the busy Labor Day holiday weekend next week compared with a year ago.
On Monday, the online gas price reporting service GasBuddy. com said the average price of regular gas in Chattanooga fell another 4 cents a gallon in the past week to $2.18 a gallon, or 13.2% less than a year ago. Despite an increase Monday in global oil prices, the price of regular fuel still fell to only $1.99 a gallon at three gas stations in West Tennessee.
Chattanooga gas prices were higher but remain 42 cents a gallon below the U.S. average and Chattanooga ranked No. 25 among the 455 markets surveyed by GasBuddy.com for the cheapest average price for regular fuel.
“For a surprising fifth straight week, the national average has declined, ushering in lower gas prices to every state and providing relief to consumers who’ve watched the stock market tank, but for the same reason oil prices have plunged,” said Patrick DeHaan, head of petroleum analysis for GasBuddy. “While gasoline demand remains healthy, continued worry over U.S. and China relations clouds energy markets and has weighed significantly on oil prices. As the summer draws to a close, the declines may slow down as new signs from both the U.S. and China show a less aggressive tone regarding trade, but we’ll have to see if that materializes into something concrete in the weeks ahead.”
Contact Dave Flessner at dflessner@times freepress.com or at 423-757-6340.