Residential customers of Pennyrile Electric will see an increase of about $14.53 for 1,000 kWh used. The bulk of the increase is the direct result of rising fuel prices, which are recovered quarterly through TVA's Fuel Cost Adjustment (FCA) mechanism. The FCA is based on the direct cost of fuel used in TVA's generating plants, and the cost of purchased power that TVA uses to supplement its power generation. About 56 percent of TVA's power supply comes from fossil fuels used to make electricity - coal, oil and natural gas. A variety of factors, which TVA cannot control, affect fuel and purchased power costs, including the weather and changes in market prices for various fuels. Many utilities, including most of those neighboring TVA's service area, use similar mechanisms to adjust their rates and are faced with similar rate increases.
In addition, continuing drought conditions mean that 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, it must buy replacement power at market prices.
The remainder of the TVA rate increase will cover additional fuel-related costs, such as increased coal inventory costs, and the expansion of TVA's energy efficiency and demand reduction program.
“When the prices of these fuels increase, TVA's costs increase. As a distributor of TVA power, when higher prices force TVA to increase its rates, we must pass those costs along to our customers,” said Pennyrile Electric President and CEO, Eston Glover, Jr. “The 159 distributors of TVA power worked with TVA two years ago to develop the FCA mechanism to help recover rising fuel prices on a quarterly basis. We believe the FCA is an important tool to help recover costs in a timely manner in order to maintain TVA's financial health.”
To assist members with dealing with an increase, Pennyrile Electric offers a variety of programs that can reduce the impact of rising costs. These programs include heat pump loans, levelized billing, cash incentives for new electric appliances and online energy audits.
To start saving energy and money on their power bills, Pennyrile Electric customers may take a few simple steps, which include completing an online home energy audit at www.precc.com.
Pennyrile Electric customers who complete the audit will receive a free energy efficiency kit to help them get started. More than 200 Pennyrile Electric customers have completed the do-it-yourself energy audit since January.
Customers may also use these energy-saving tips when possible to help reduce their electric bills:
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