TVA surcharge to raise August bills for customers
RUSSELLVILLE Electricity customers should expect higher bills in August as TVA passes along a surcharge driven by high summer demand and a recent outage at the Sequoyah Nuclear Plant in Tennessee.
The Fuel Cost Adjustment (FCA) is a monthly charge TVA recalculates based on forecasted fuel and purchased power costs which local utilities pass on to customers.
Russellville Electric Board Manager Derrick Moore said REB includes the Fuel Cost Adjustment (FCA) in the overall rate on customer bills, similar to how the City of Florence handles it.
Moore said there is no separate line item on customer bills for the FCA.
He added that fuel costs rise and fall throughout the year, “impacted by the weather, regional and global economic conditions, supply and demand.”
While TVA’s surcharge will rise for August bills, Moore emphasized the utility itself has not raised its base rates during his tenure.
He said higher summer bills generally reflect increased usage of air conditioning, pool equipment and similar items, running longer hours.
TVA’s decision
TVA said recent outages at its Sequoyah Nuclear Plant in Tennessee, combined with regional temperatures in the upper 90s, will contribute to a higher Fuel Cost Adjustment (FCA) for August bills.
“Any impact of the most recent Sequoyah Nuclear Plant outages will be reflected in the August Fuel Cost and would be only one of many factors,” said Clarissa McClain, senior strategic communicator for Alabama.
TVA’s FCA is not a local rate, but a pass-through charge TVA applies to local power companies who then pass it on to customers.
For July, TVA set the FCA at 2.607 cents per kilowatt-hour for residential and business customers. The rate is 2.484 cents for Large General Service customers and 2.491 cents for Large Manufacturing Service customers served by TVA and local power companies, including REB.
TVA notes that the July rate is about 7% lower than the three-year average for the month.
McClain explained the FCA generally accounts for about one-third of a typical monthly bill.
“Both usage and cost impact the amount people pay,” she said. “People use more power during the summer and winter to heat or cool their homes and stay comfortable, which makes their bills go up.”
She added that each local power company decides how to show the surcharge to customers.
“Some choose to have a separate line item on the bill and others add it to the energy charges or to the total bill,” McClain said.
Everybody pays
Sheffield Utilities General Manager Steve Hargrove said Sheffield Utilities lists the FCA as a separate line item on its power bills to let customers know the local utility isn’t increasing rates.
“Everybody gets charged a fuel charge in the TVA region,” Hargrove said.
Hargrove said 99.9% of the time, Sheffield Utilities, not TVA, receives calls from customers asking why their power bill was higher than a previous month.
“Youmaynoticeachange in your monthly bill due to the Fuel Cost Adjustment (FCA),” Florence Electricity Department General Manager Mary McDuffa said. “This is a pass-through charge, meaning every penny collected goes straight to TVA.”
McDuffa said the FCA is not a fixed charge.
“It can increase or decrease monthly depending on TVA’s fuel and purchased power costs, which often rise during peak energy seasons like hot summers and cold winters,” she said. “While the FCA is part of your overall monthly bill, it’s not listed as a separate line item on your statement.”
