TVA to reduce FCA for third time this year, meaning 4-percent rate reduction for MTEMC members

MTEMC members will see their rates go down about four percent in July as TVA will reduce its Fuel Cost Adjustment for the third time since the first of the year.

While the average impact to member bills will be about four percent or $2 to $5, amounts consumers save will depend on the amount of energy they use because the fuel cost adjustment is a per kilowatt-hour charge.

“That’s important to note,” said MTEMC’s Chris Jones, “come July 1, our members will pay less per kilowatt-hour. But when the weather gets hot, bills will be higher because we’ll all use more kilowatt-hours to stay cool.”

The FCA will decrease from .8 cents per kilowatt-hour to just more than .5 cents per kilowatt-hour on July 1. This decrease, in addition to reductions on Jan. 1 and April 1, will more than offset the 17-percent FCA increase in October 2008.

“Fortunately for all of us,” TVA President and CEO Tom Kilgore said, “the price of coal and natural gas that are used as fuels in TVA power plants has declined in recent months. In addition, current economic conditions have resulted in lower power sales for TVA and that reduces our fuel and purchased power costs, as well.”

Like other 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.

Posted on May 15, 2009.

 

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