Itawamba County residents should begin receiving slightly lighter power bills in July.

TVA recently announced that their quarterly fuel cost adjustment will decrease by 4.1 percent beginning July 1, which will likely result in savings for its customers. This represents the third straight quarterly decrease for the company, following decreases in January and April.

This change will affect all of TVA’s 159 distributors, including Tombigbee Electric Power Association, which covers Itawamba County.

According to official information released by TVA, the new fuel cost adjustment rate should result in customers saving approximately $2 to $5 on their monthly power bills. Because this cost is based on a per kilowatt-hour charge, however, the amount will vary from customer to customer, depending on how much energy he or she uses. Retail billing periods for TVA power distributors also vary, so some July bills will include June usage at the higher rate.

Lowest level

Overall, the decrease for the fourth quarter of the 2009 fiscal year will be a 4.1 percent reduction on total average wholesale rates, which is a reduction of approximately 35 percent from the current quarter’s fuel cost adjustment amount, bringing it to the lowest level in more than a year.

In October of last year, TVA implemented a 17 percent fuel cost adjustment increase in conjunction with a 3 percent base rate hike, resulting in an average increase of $20 to TVA customer’s power bills.

“With the reduction in July, we will roll back all of the fuel cost adjustment increase from last fall, which is good news for ratepayers,” TVA President and CEO Tom Kilgore said in an official company statement. “Fortunately for all of us, the price of coal and natural gas that are used as fuels in TVA power plants has declined in recent months. In addition, current economic conditions have resulted in lower power sales for TVA and that reduces our fuel and purchased power costs as well.”

According to Bill Long, general manager for TEPA, TVA relies on the purchase of various types of fuel to generate electricity for its customers. Most fuel purchased by TVA is coal and natural gas, both volatile markets. Customer’s power bills reflect these fluctuating rates, evaluated on a quarterly basis.

How much this rate changes will depend on the amount of fuel and natural gas TVA has to purchase to both power its equipment and transport materials. Long has previously stated the quarterly fuel cost adjustments are largely a benefit to both the utility and its customers, allowing for rates to more closely match expenses.

The 20 percent increase last October was the federal utility's highest increase in three decades. According to Long, rising costs for the fuel used to supply the utility’s power plants were largely to blame for that sizable increase.

Adam Armour can be reached at 862-3141, by e-mailing adam.armour@itawamba360.com or by visiting his blog at itawamba360.com.