TVA increases Fuel Cost Adjustment April 1

MTEMC members will see rates go up about 4.5 percent when they get their bills in April, as the Tennesssee Valley Authority has increased its Fuel Cost Adjustment (FCA) for the second time this year.

“Because the FCA has been a negative number for the last year and essentially a credit on member bills,” MTEMC Communications Coordinator Todd Palmer said, “the FCA line item will still be a credit…just less of one.”

The FCA will increase from March’s rate of –0.575 cents per kilowatt-hour to -0.201 cents per kilowatt-hour.

“Because the Fuel Cost Adjustment is a per kilowatt-hour charge, the actual percentage change in members’ bills will differ depending on the amount of energy they use,” Palmer said.

The FCA credit that members have received since October is slowly being used up. The credit was created when fuel costs in 2009 were lower than TVA had forecasted. As the credit is reduced over the next three months, FCA amounts will continue to increase slightly.

The FCA is a billing mechanism TVA uses to help recover largely uncontrollable fuel and purchased power costs. Since TVA is the power supplier for Middle Tennessee Electric and the FCA is a TVA charge, all of the charge collected from Middle Tennessee Electric members goes back to TVA.

Posted on March 16, 2010.

 

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