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As Summer Heats Up, Power Rates Go Down

 

Media Contact:

Wayne Scarbrough

(423) 745-4501 ext. 6002

wscarbrough@aub.org

 

 

July 19, 2017 

 

 

ATHENS, Tenn.-- Summer's heat is here along with the shirt-soaking seasonal humidity so common in the southeast.

 

But while temperatures rise, the local power rate is set to fall in August based on a slightly lower monthly fuel charge from TVA to local power companies such as AUB.

 

AUB's all-up residential energy rate for August will be $0.09106 down from the current July rate of $0.09335.

 

"We'll take it," said AUB's Wayne Scarbrough.

 

"TVA's summer base rates are the highest of their seasonal rates and summer is when customers really use a lot of energy to cool their homes. So, it is nice when a lower fuel cost helps decrease the all-up rate per kilowatt hour for the month," he said.

 

For August, the fuel charge is $0.02098 per kilowatt hour.

 

The summer billing months of June through September all have a base rate of $0.07008. Each month, TV's fuel charge is added to the base rate to arrive at the all-up, or "effective," rate retail customers pay for power that month.

 

The lower August rate versus July will shave about $2.80 off of the average residential AUB bill for 1160 kilowatt hours of energy.

 

"But this is August in the south. Many homes will use more than that average. The lower monthly rate will help, but with this heat and humidity you still will have a higher than average bill because you'll use so much energy to stay cool," Scarbrough said.

 

To save on summertime bills, he suggests simple steps such as closing curtains to reduce solar heat to your home's interior, lowering the setting on your water heater by 10 to 20 degrees, keeping your air conditioner on 74 instead of 68, and keeping the cooled air in with weather stripping and closed doors.

 

AUB General Manager Eric Newberry said that rising temperatures help him and his staff stay focused as well on TVA's pattern of rising wholesale power rates, which Newberry says seems to be unending.

 

"From what we gather, TVA plans to raise rates again this fall and each fall for the next several years. AUB and other distributors do not believe TVA has made its case and we are maintaining pressure on that plan and hope that TVA will hear us," Newberry said.

 

"TVA likes to announce that the "effective rates" in the Valley are lower than in recent years, but that's a bit of a shell game," Scarbrough said. "TVA's rates are not the effective rates."

 

TVA's rate is the wholesale rate that AUB pays the federal agency for power each month, he said.

 

"That wholesale rate is higher year over year and continues to climb," Scarbrough said.

 

TVA has increased AUB's wholesale rate more than 32 percent in the past eight years.

 

"AUB's power bill for June--what the local utility paid TVA--was more than $3.7 million," Scarbrough said.

 

Effective rates are the retail rates that local power providers like AUB charge customers.

 

Effective rates include TVA's wholesale rate that it charges AUB, the monthly fuel charge, and AUB's local adder that provides operating revenue for the local utility.

 

"It is the lean operations of local utilities such as AUB that have kept the effective rate in check, certainly not TVA," Newberry said.

 

Newberry said the pressure local power utilities continue to put on TVA to explain their plan for annual rate hikes may be making a difference.

 

"We don't think they have made the case for their rate actions and plans. We continue to press them for details and better reasoning, and we may be making some progress based on recent communications," he said. "They say they are listening."

 

AUB and other Valley distributors continue to press TVA regarding its apparent plans for annual rate hikes when the agency's revenues are strong, the need for capital spending is down based on demand in the Valley, and employee bonuses in excess of $110 million dollars a year have become the norm.

 

Visit AUB on the web for summertime energy saving tips. www.aub.org

 

 

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