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Chattanooga’s December heating bills could spike $10 for typical EPB customer

Chattanooga homeowners are going to have to shell out more cold cash to stay warm this winter with higher fuel costs pushing up utility prices.

The average price of electricity for residential customers of EPB next month will be 8.4% higher than a year ago because of fuel cost adjustments caused by a jump in natural gas and coal prices used to generate electricity for the Tennessee Valley Authority.

Just as temperatures drop and families boost their power consumption in December, TVA is raising its monthly fuel cost adjustment numbers to reflect the doubling in price for much of the natural gas and coal bought by TVA to power its fossil fuel plants. Although TVA generates about 60% of its electricity from nuclear power, hydroelectric dams and purchased solar and wind generation, TVA has been forced to pay more for its fossil fuels, even though the utility hedges about 80% of its natural gas purchases.

“Certainly without a doubt, the past few months have seen tremendous price increases and volatility within the fuel markets, both for coal and natural gas,” said Brian Child, vice president of enterprise planning for the authority. “At TVA, we’ve not been immune from these challenges nor from the implications that result.”

For a typical EPB residential customer using 1,295 kilowatt-hours of electricity a month, next month’s electricity bill will be $134.10. That is $2.02 a month more than what such power is currently priced at and is up $10.63 from the cost of such power in December 2020, according to EPB.

Child said TVA’s diverse energy profile should ensure the utility has no trouble meeting the demand for electricity this winter, but most homeowners will probably pay 5% to 10% higher bills for electricity than they did last winter due to the higher fuel expenses.

TVA, which had kept its delivered price of power below levels of a decade ago through most of this year, is raising fuel costs in December by 37% above the average of what the fuel cost adjustment has been over the past three years.

TVA has kept its base rates flat and even provided pandemic relief credits to its local power companies last year, this year and into 2023. But TVA adjusts a portion of each month’s bill based upon the cost of the fuel it uses to produce electricity. TVA spokesperson Scott Brooks said the overall system average fuel rate for December is at levels similar to 2010 through 2014, but fuel costs are much higher than the pandemic lows reached a year ago.

“There is a significant global increase in natural gas prices that has also pushed the demand for coal higher,” Brooks said. “TVA has taken action to partially mitigate the volatility in gas prices with a diverse asset portfolio and hedging practices.”

Homeowners heating with natural gas, about 30% of the households in Chattanooga, will feel the impact of fossil fuel inflation far more than those who have electric furnaces.

Chattanooga Gas Co., a subsidiary of Southern Company Gas, estimates the typical residential customer with a gas furnace will pay about $27 more a month this winter than what was charged a year ago due to a projected 48% jump in the commodity price of natural gas delivered to the 69,000 customers of Chattanooga Gas in Hamilton and Bradley counties.

“There is an increased demand for natural gas as the economy continues to recover from the pandemic, and that is affecting supply and ultimately the cost,” Chattanooga Gas spokesperson Robin Gray said.

Both Gray and Child said they expect the natural gas price hikes to be short term and fuel prices should come down again next spring after the winter increases.

Contact Dave Flessner at or 423-757-6340.

Read More: Chattanooga’s December heating bills could spike $10 for typical EPB customer

2021-11-18 23:02:20

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