TVA Forecasts Lower Electric Bills
Scorching heat, record electric consumption, and volatile natural gas prices have increased power bills across the nation. TVA digs deeper into the causes of this summer’s higher bills and shares tips for saving energy.
This summer, Mother Nature brought hot temperatures across the nation. Combined with record‐high electric consumption and natural gas prices, customers are seeing higher than regular electric bills. TVA says consumers should start seeing lower power bills this fall due to milder temperatures and lower electric demand, giving families relief from the heat and higher bills.
"This summer has been a perfect storm of hot weather, record‐high energy demand, and rising fuel costs," said Doug Perry, Tennessee Valley Authority, senior vice president, Commercial Energy Solutions. "We've been using every tool in our toolbox to keep your power bill as low as possible."
According to TVA, electric load hit a June record of 31,617 megawatts, natural gas prices are 141% higher this June versus last year, and this summer is shaping to be one of the hottest ‐ July was Nashville's second‐hottest on record.
Perry explains that temperature is the biggest driver for power bills, not the cost of power. TVA has kept rates flat for the past ten years and has among the lowest electricity prices in the country, according to the most recent data from the U.S. Energy Information Administration.
"When it is 100 degrees outside, your A/C is running around the clock to try to keep your home cool. That means you are using much more electricity than you normally would."
Your power bill is made up of three parts:
- Usage: The amount of electricity that you use each month. If it is very hot or very cold outside, you use more power to keep your family safe and comfortable. You can control this amount by making more informed energy choices.
- Base Rates: These rates are necessary to collect the costs for generation plants, transmission from the generation plants to local power companies, and power distribution from your local power company to your home.
- Fuel: The cost of the fuel TVA needs to generate electricity each month. To protect customers, TVA updates the fuel cost each month so you can realize the savings as fuel prices go down. TVA is a non‐profit and only recovers the actual cost of fuel.
In terms of fuel, Perry says TVA is focused on protecting customers' pocketbooks by using hedging strategies to lock in prices through longer‐term contracts and by choosing the least‐cost generation available from among TVA's diverse generation resources.
This year, over half of the energy TVA generates is carbon‐free and not affected by fuel prices. TVA's long-term vision is to achieve a 70% reduction in carbon emissions by 2030 and 80% by 2035, without raising costs or impacting reliability, and achieve net-zero emissions by 2050. Decarbonization can help stabilize the risk of higher power bills due to fuel price volatility.
To help achieve carbon reductions, last month, TVA made a request for up to 5,000 megawatts of carbon‐free energy and plans to add 10,000 megawatts of solar by 2035 – enough solar electricity to power 1.6 million single‐family homes.
Nationwide, utility customers are experiencing higher bills than in the Tennessee Valley, as TVA's residential power rates are lower than 80% of other utilities. Last month, Duke Energy announced its intent to increase its current electric rates for residential by 7.2%, or 29.8% over what these customers paid for the same period last year, due to fuel costs. This is Duke Energy's second request for a rate increase in its Fuel Adjustment Clause over the previous four months. Cape Coral, Fla., residents experienced a sharp rise in their electric bills last month – $32.70, or 27% – from the city's power provider, Lee County Electric Cooperative, due to high fuel prices.
"We recognize the effect any cost increase has on families right now, and I can tell you that TVA is highly focused on doing everything possible to support communities by keeping power bills as low as possible," said Perry.
Is Your Home Ready for Summer?
To help reduce energy consumption, Perry suggests the following:
- Turn your thermostat up just one or two degrees and use fans to circulate air when people are in a room. Each degree can save 3% on your power bill.
- Close window coverings on the sunny side of your home or office.
- Avoid using ovens, dishwashers, clothes dryers, and other appliances that generate heat in your home until later in the evening or early in the morning.
TVA wants to help make your home more efficient to save energy this summer. Visit energyright.com/residential/ for more no‐cost or low‐cost energy‐saving tips or to schedule a free in‐person or virtual home energy evaluation. Homeowners can also check their eligibility for financing for home energy upgrades by visiting energyright.com/residential/financing/.
Need Bill Assistance?
Local assistance programs also offer relief, such as the Low Income Home Energy Assistance Program. Homeowners and renters can also check with their local power company for additional assistance programs.