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June 5, 2009

TVA to continue rate decrease

By Patrick McCreless

Cullman city and county residents can expect lower power bills in July — the latest decrease in a trend that began at the beginning of the year.

The Tennessee Valley Authority (TVA) recently announced it would cut its fuel cost adjustment rates by 4.1 percent on July 1. Combined with similar cuts made in April and January, the decreases offset a 17 percent rate increase TVA imposed in October last year due to the high cost of fuel.

“Seventeen percent was a huge jump in the fuel cost adjustment,” said Brian Lacy, spokesman for Cullman Electric Cooperative. “It’s now gone completely back to where it was (last year).”

For Cullman Co-op and Cullman Power Board customers, the 17 percent increase added an extra $12 to $15 onto their power bills each month, which will be negated by the July cut.

Lacy said with the latest cut, Co-op customers can expect a drop of between $2 to $5 on their bills.

Mike Manning, general manager for the Cullman Power Board, said the latest cuts will drop city rates by about $2.57.

“That will drop an average monthly bill of $72.71 to $70.14,” Manning said.

Lacy said TVA has been able to lower rates consistently this year due to the slow economy and decreases in the prices of coal and natural gas.

“Things are down a little bit right now,” Lacy said. “In the Southeast U.S., we’ve had some factories close and places go out of business, so demand is down. TVA doesn’t have to generate as much electricity, which means they don’t have to spend as much on coal.”

And since the area has received significant rainfall this year, TVA has been able to generate more hydroelectric power instead of using fossil fuels, which has lowered costs even more, Manning said.

TVA’s next fuel cost adjustment is scheduled in October.

“We don’t know if it (rate) will continue to go down until we get closer to that date,” Lacy said.



‰ Patrick McCreless can be reached by e-mail at patrickm@cullmantimes.com or by telephone at 734-2131 ext. 270.

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