Tennessee Valley Authority electricity rates jump 20 percent
TVA electricity rates jump 20 percent today (Times Daily)
The wholesale price of electricity jumped 20 percent today across north Alabama and portions of six other states as the Tennessee Valley Authority tries to cope with the rapidly rising cost of coal and power that it purchases from other utilities…For the average resident of the Tennessee Valley, the increase will mean about $20 more per month on the electric bill.
TVA spokesman Gil Francis said the rate adjustment, the largest in 34 years for the utility, is needed to help TVA pay for the coal used to produce the bulk of its electricity and other expenses.
“Central Appalachian coal that we were buying for about $60 per ton in January was costing $140 per ton in August,” he said. “The cost of transporting that coal to our power plants has also increased. When we have to purchase power from other utilities to meet peak demands, that also costs us more than it did at the beginning of the year. Plus our hydroelectric generation remains about 50 percent of normal for the year, which forces us to burn more coal and purchase more power to meet our customers’ demands for electricity.”
Explaining TVA’s Rates (EnergyBiz Insider)
It’s a function of supply and demand. More people are moving into the region and consuming more energy. But the utility’s supply is stretched. It imports much of its coal from China, which is now a scarce resource. Price increases for fuel, including coal, natural gas and purchased power are driving TVA’s costs up by more than $2 billion in fiscal year 2009, compared to fiscal year 2008.
At the same time, TVA has been able to generate only about half as much inexpensive hydropower this year as it would generate in an average year. When TVA cannot generate that hydropower — about 1,000 megawatts — it must buy replacement power at market prices. Those power prices are much greater than hydropower costs and were even higher this summer, averaging 63 percent higher than last summer.
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EIA: Retail Prices
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