City’s electricity prices decline, but costs still up from a year ago
Chattanoogans are getting a bit of a reprieve from the jump in energy prices over the past year since the pandemic pushed down consumption and prices a year ago.
The average price of gasoline fell 3.2 cents a gallon last week for regular fuel in Chattanooga despite a slight increase again in gas prices in most U.S. cities, according to the fuel price web site GasBuddy.com which surveyed 170 stations in Chattanooga.
At the same time, the Tennessee Valley Authority announced that electricity prices will drop slightly next month due to a decrease in the monthly fuel cost adjustment in August compared with the current month.
But gas and electricity prices remain well above prices a year ago.
The average price of a gallon of regular fuel in Chattanooga fell in the past week to $2.78 per gallon, which was 38 cents a gallon cheaper than the U.S. average. Chattanooga gas prices, on average, also remain below neighboring markets such as Knoxville, Nashville, Atlanta and Huntsville, according to Gasbuddy.com.
But gas prices in Chattanooga are still 5.9 cents per gallon higher than a month ago and are up 91 cents per gallon from a year ago when the drop in travel due to the pandemic pushed fuel prices down to the lowest inflationadjusted levels in decades.
“Gas prices across the country have been a bit sideways in the last week with a mixed bag of decreases and increases, but overall, the national average hasn’t seen much meaningful direction as oil prices remain under their early-July levels thus far thanks to OPEC coming to an agreement on production over the weekend,” said Patrick De Haan, head of petroleum analysis for GasBuddy. “OPEC’s plan is to raise oil production by 400,000 barrels per day each month until 2022, at which time OPEC’s oil production will be back at pre-Covid levels. It’s a positive development in light of U.S. gasoline demand which last week rose nearly 2%, which should act as a loose ceiling on the price of oil, and could mean we’re even closer to seeing a peak in the national average if we haven’t already.”
However, oil futures fell Monday along with the stock market over concerns about a resurgence in COVID-19 infections.
According to GasBuddy price reports, the cheapest station in Chattanooga Monday was the Sam’s Club on Lee Highway which was selling regular gas at $2.61 per gallon. The lowest price gas in Tennessee on Monday was at an ABC Convenience store in Madisonville where regular gas was priced at $2.05 per gallon.
While gasoline prices are a bit cheaper this week, natural gas prices remain elevated. That has pushed up the fuel cost adjustments on home heating and electricity bills in the Tennessee Valley by 4.6% in the past year. However, TVA’s August fuel price adjustment will be about 1% lower due to continued strong production by TVA’s nuclear plants and hydroelectric units which have the lowest cost fuel among the mix of energy generation for the federal utility.
For the typical Chattanooga household that uses 1,295 kilowatthours of electricity a month, the typical monthly light bill in August should be $142.97, or 36 cents cheaper than the price of such power usage this month. Electricity bills next month for a household using 1,295 kWh will still cost $6.29 more than in August 2020.
TVA spokesman Scott Brooks said the overall system average fuel rate for August is 13% higher than the three-year average due to higher fuel prices in the past year.
“The higher fuel rate is mostly due to expectations for increased gas rates and a small increase in TVA sales, both relative to the comparative threeyear time frame, which includes impacts from the pandemic in August 2020,” Brooks said.
Energy price hikes in the past year have been among the contributors to a 5.4% jump in the consumer price index over the past 12 months — the highest yearly inflation rate in the U.S. in nearly 13 years.