Chattanooga gas prices drop, but home energy prices by TVA to hit record high in August – Chattanooga Times Free Press

Average gasoline prices in Chattanooga dropped another 17.5 cents a gallon in the past week to dip below $4 a gallon for the first time this summer, according to GasBuddy’s survey of 170 stations in Chattanooga.

But while motorists are feeling less pain at the pump, homeowners are still feeling the heat from higher prices for electricity used to power air conditioners during the summer. Home energy prices continue to rise with the monthly fuel cost adjustment from the Tennessee Valley Authority hitting a new high, boosting Chattanooga electricity prices next month by nearly 27% above what they were a year ago.

With higher temperatures and increased natural gas and purchased power costs, electricity bills in Chattanooga will increase for many homeowners to record summertime highs in August. EPB said Monday the typical residential customer that uses an average of 1,295 kilowatt-hours of electricity a month will pay a monthly power bill of $159.36 next month, or $9.39 more than they will pay for such power usage this month and $32.80 more than what they paid for the same amount of electricity a year ago.

“Gas and purchased power rates remain significantly higher than the three-year average rates, and volatility remains prevalent, especially in natural gas pricing,” TVA spokesman Scott Brooks said in a statement Monday. “An increase in the sales forecast is also contributing to the higher fuel rate (electricity sales are 9% higher compared to the three-year average).”

TVA ratepayers feel the heat

TVA has kept its base rates flat since 2018, but the utility adjusts part of its charges each month based on the costs of fuel to produce electricity. Brooks said the fuel cost portion of power bills by TVA next month will be nearly triple the average cost for fuel over the past three years, reflecting the highest monthly fuel cost for TVA on record.

TVA spokesman Scott Fiedler said in an emailed statement the current cost of natural gas is at a 14-year high, and as energy use rises in the summer due to more air conditioning use, TVA must turn to more expensive sources of power to meet peak power demands.

TVA gets about 10% of its power from its hydroelectric dams, which have no fuel costs, and more than 40% of its power from nuclear reactors, which have a relatively low fuel expense compared with other sources. But TVA also gets about 40% of its power from natural gas and coal-burning plants, and the price for those fuels has jumped this year, due in part to the ongoing war in the Ukraine and the cut off of Russian gas and coal supplies on the global market.

TVA and EPB officials said energy bills are rising even more in some markets, such as in New Hampshire, where the local utility is proposing to double electricity charges.

“When this increase in TVA’s monthly fuel cost adjustment is considered in combination with the likelihood of warmer summer temperatures, which drive up energy consumption, many customers will see an increase in their energy costs for August,” EPB spokesman J.Ed. Marston said in an emailed statement. “Because TVA has a diverse power generation portfolio, which utilizes natural gas for about 26% of power generation, electric customers in markets that are more heavily reliant on natural gas and other fuels that are already seeing substantial price increases will experience even higher energy costs.”

TVA’s wholesale rates remain higher than some of its neighbors in the South, but TVA residential rates are below about 70% of those charged by other utilities nationwide, and its industrial rates are among the lowest 20% of all utilities, according to Energy Information Administration data.

Relief at the pump from record prices

While energy prices at home hit record highs, Chattanooga motorists are getting some reprieve in their cars from the record-high prices at the pump reached in May. The online gas pricing service GasBuddy.com calculates that the average price of regular gas in Chattanooga has dropped by nearly 56 cents a gallon in the past month and is now 57 cents a gallon below the U.S. average to remain among the cheapest markets for fuel in Tennessee.

Patrick De Haan, head of petroleum analysis at GasBuddy, said gas prices are likely to continue to decline through the summer, although Chattanooga fuel prices are still nearly 42% higher than a year ago.

“We’ve seen the national average price of gasoline decline for a fifth straight week, with the pace of recent declines accelerating to some of the most significant we’ve seen in years,” De Haan said in a report released Monday. “This trend is likely to reach a sixth straight week, with prices likely to fall again this week.”

According to GasBuddy price reports, the cheapest gas in Chattanooga on Monday was at the Sam’s Club on Lee Highway, where regular gas is priced at $3.55 a gallon.

The national average price of gasoline has fallen 15.8 cents per gallon in the last week, averaging $4.51 per gallon, De Haan said.

Contact Dave Flessner at dflessner@timesfreepress.com or 423-757-6340. Follow him on Twitter @dflessner1.

Original Source: https://www.timesfreepress.com/news/business/aroundregion/story/2022/jul/18/gasoline-prices-drop-home-energy-prices-tva-high/572982/