Decatur Utilities customers have experienced an increase in their electric bills this summer due to both higher usage and higher wholesale power costs. North Alabama has experienced a hotter-than-usual summer already this year and electric customers are seeing increased usage reflected in their bills. Adding to the issue are supply chain constraints that have driven up natural gas prices, causing wholesale power costs from TVA to increase significantly over the same time last year.
TVA wholesale power costs
The Fuel Cost Adjustment, or FCA, fluctuates monthly as TVA’s fuel costs change and is a component of DU’s wholesale rate for electricity. The recent increase is due primarily to higher prices for natural gas, which is used to fuel about 25% of TVA’s generation of electricity.
“This FCA is a direct pass-through from TVA,” said Ray Hardin, DU General Manager. “We have no control over these changes and the entire amount goes to TVA and not DU.”
Hardin noted that DU operates its electric system very efficiently, keeping just 17% of revenues. “The majority, or about 83%, of the electric bill a customer pays goes to TVA for wholesale electricity purchased.”
The FCA helps TVA manage market fluctuations in fuel cost. While it has been relatively steady for the past several years, global supply chain issues and inflation has resulted in a higher adjustment over the last few months.
Explanation of FCA - Courtesy of Huntsville Utilities TV (HUTV) (3:53 mark)
Additional info on FCA increase from TVA:
Conservation Efforts
Customers can take the following steps to reduce energy usage:
Set your thermostat at the highest temperature possible while maintaining your desired comfort level. HVAC experts recommended setting your thermostat no more than 20 degrees lower than the outside temperature. Most systems are designed to overcome a 20-degree differential while maintaining efficiency.
Run ceiling fans counterclockwise, forcing air to move straight down and create a “wind chill” effect on skin. Even mild air movement can make a room feel three to four degrees cooler.
Keep blinds, shades and curtains closed during the hottest parts of the day to prevent sunlight from heating your home.
Stoves and ovens can raise a kitchen’s temperature as much as 10 degrees. Use an outdoor grill or microwave as much as possible to keep the temperature down.
Limit chores that produce heat and moisture, like cooking, cleaning, ironing, and laundry, to the cooler early morning and evening hours as much as possible.
Turn off any unnecessary lights. Much of the energy consumed by light bulbs is emitted as heat, driving already warm temperatures even higher.
Wear thin, loose-fitting clothing around the house to stay comfortable without keeping the room temperature low.