TVA Announces Another Fuel Cost Decrease in April

TVA today announced the second consecutive decrease in its quarterly fuel cost adjustment for billing periods beginning April 1, 2009.

While savings will vary across the Tennessee Valley, residential consumers can expect a decrease that ranges from about $4 to $9 in their monthly power bills. Retail billing periods for TVA power distributors also vary, so some April bills will include March usage at the lower rate.

“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,” said TVA President and CEO Tom Kilgore. “Unusually cold weather this winter has meant higher consumption of electricity and higher power bills even for people who keep their thermostats low.”

Because the fuel cost adjustment is a per kilowatt-hour charge, amounts
that consumers will save depend on the amount of energy they use.  Under the fuel cost adjustment, when the price of fuels used to make electricity decreases, the cost of electricity also decreases. Current economic conditions and increased rainfall also contributed to lower fuel and purchased power costs, Kilgore said

Unfortunately, coal prices have not decreased as rapidly as other fuel prices, preventing TVA’s costs from dropping further. About 60 percent of TVA’s power supply comes from fossil fuels – primarily coal, along with oil and natural gas.

Like utilities around the country, TVA uses a fuel cost adjustment to recover costs of the fuel to generate electricity and the cost of electricity bought from other suppliers. The adjustment is part of consumers’ power bills and goes up or down, depending on those costs.