Local power rates likely to increase slightly

By Staff
Mike Self, FCT Sports Writer
The Tennessee Valley Authority raised the price of electricity for 2007, but local officials expect the impact on utility bills in Franklin County to be minimal.
Effective Monday, TVA increased the price of electricity it sells to power distributors throughout the Valley by one-hundredth of one cent per kilowatt-hour in an effort to recoup increasing costs for coal and natural gas used to produce electricity and for power it purchases from other utilities.
"It's just one-hundredth of one cent. I expect it will have very little effect," said A.H. Akins, manager of Franklin County Electric Cooperative. "I haven't calculated exactly how much the increase will be [per month], but I don't even think it will be noticeable."
Reports indicate that residential utility bills are expected to increase by about 15 cents per month.
The increase is a result of a fuel cost adjustment program TVA adopted this past summer.
The program took effect in October. This is the first time the federal utility has used the adjustment to boost electrical rates.
TVA increased its price of electricity 7.5 percent in October of 2005 and 9.95 percent in February to help it cope with rapidly rising prices for fuel and purchased power.
The two increases combined raised monthly utility bills for most homes by $8.25 to $15.25.
This latest increase is not expected to have anywhere near that type of impact.
In adopting the fuel-cost adjustment program, TVA reduced residential power rates by 4.5 percent in October to reflect lower prices it was paying for fuel and purchased power.
The reduction lowers monthly power bills for most homes by $2.15 to $4.
TVA officials say that fuel and purchased power prices have so far been less volatile this winter than last when coal and natural gas prices spiraled upward in the wake of hurricanes Katrina and Rita.
Also, problems at two western mines where TVA purchases coal helped drive up fuel prices.
TVA officials said they will evaluate the utility's fuel and purchased power costs again in March to determine if there will be a fuel cost adjustment during the second quarter of the year, which begins April 1.

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