TVA reduces Fuel Cost Adjustment credit May 1

MTEMC members will see slightly higher rates when they get their bills in May, as the Tennessee Valley Authority has decreased its Fuel Cost Adjustment (FCA) credit for the third month in a row.

“The FCA credit from last year’s bills continues,” MTEMC Communications Coordinator Todd Palmer said, “however, it has now been reduced three times since the first of the year.”

The FCA will move from April’s rate of –0.201 cents per kilowatt-hour to -0.136 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, but it looks to be about one percent on average,” 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 April 13, 2010.

 

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