Electric rates to decline in March but still up 5.7% from a year ago

Inflation-wary consumers will get a bit of a reprieve next month in their household heating bills when the Tennessee Valley Authority lowers its fuel cost adjustment in March, cutting the price of electricity in Chattanooga by 6% from the current rate.

Electricity rates will still be up by 5.7% next month from where they were a year ago due entirely to higher costs for natural gas and coal used to generate about a third of TVA’s electricity.

Despite the higher fuel cost adjustment from last winter, power bills are still down nearly 15% from the record-high levels reached last summer, when natural gas prices skyrocketed following the Russian invasion of Ukraine.

For the typical Chattanooga household that uses 1,295 kilowatt-hours of electricity in a month, March’s power bill will be $8.66 below what was charged for the same amount of power in February, EPB spokeswoman Sophia Moore said Wednesday in an emailed statement.

TVA spokesman Scott Brooks said in an emailed statement the price of natural gas, purchased power and coal have moderated from the peaks reached last June, but they are still up by 47% from the average of the previous three years.

“Natural gas prices, in particular, are still very volatile in both directions,” Brooks said.

TVA has not raised its base rates since 2019 and has pledged to keep its base rates constant over the next decade. But the federal utility adjusts part of its power prices each month based on what it has and expects to pay for fuel and purchased power.

“I think we did a very good job mitigating what was a very difficult situation with rising fuel prices,” TVA President Jeff Lyash said in a telephone interview with the Chattanooga Times Free Press. “Our fuel costs have risen less than for most utilities and I think are going to come down more quickly than most utilities.”

Despite a jump in the overall inflation rate last year, Lyash said TVA has been able to pare its borrowing costs with lower debt and offset higher labor costs with higher electricity sales from economic growth in its sevenstate region.

“Gas prices have come down, and I expect they will moderate in the intermediate term, but it’s hard to predict long term where fuel costs will go,” Lyash said.

TVA, which provides electricity to about 10 million customers through 153 local power companies like Chattanooga’s EPB, generates more than 60% of its power from nuclear, hydro and solar generators that are not subject to volatile prices for fossil fuels.

Moore said homeowners can call EPB to get an energy audit to identify ways to reduce their electricity consumption or to convert to levelized payment plans to equalize what households pay for electricity throughout the year.

“Through EPB Energy Pros and TVA Energy Right, eligible homes can receive substantial home energy upgrades at no charge to reduce electricity usage,” Moore said. “Home Uplift (available in targeted lower-income communities) can reduce energy usage and improve air quality for an average annual savings of $450 on energy bills.”

Through Home Uplift, EPB Energy Pros identify personalized improvements to improve residents’ energy use, like home sealing, duct replacement, water heater and pipe insulation, wall insulation and HVAC cleaning and tune up. When necessary, the program can also replace doors, heat pumps, water heaters and refrigerators.

To learn about qualifications or apply, interested persons should visit epb. com/homeuplift.