Electric Bills Up Due to Rising Fuel Costs

The numbers on the thermometer are going up, and if you’re not careful, on your electric bill too. TVA explains what is causing the higher bills this summer and gives money-saving advice.

The numbers on the thermometer are going up, and if you’re not careful, on your electric bill too. TVA explains what is causing the higher bills this summer and gives money-saving advice.  

Summer brings soaring temperatures and outdoor fun with family and friends. It can also burn your wallet if you waste electricity - TVA warns.

With inflation at a 40-year high, utilities across the nation are warning customers to prepare for high energy bills this summer. While inflation is playing a role in electricity prices, the real cause is higher natural gas prices due to geopolitical events, economic growth, and tight supply.

Natural gas is used for cooking, heating water and generating over 40% of America’s electricity. 

TVA says it is working to address the high natural gas prices to reduce the impact on power bills.

“We’ve seen natural gas prices increase to a 14-year high,” said Doug Perry, Tennessee Valley Authority, senior vice president, Commercial Energy Solutions. “We are using every tool in our toolbox to provide you with clean, reliable power and keep money where it belongs - in your pocket.” 

TVA’s monthly Fuel Cost Adjustment for August has hit the highest amount since it started in 2011 – 4.6 cents per kWh. The FCA amount changes monthly as fuel prices fluctuate, based on the actual cost TVA pays for fuel.  To protect customers, 65% of TVA’s rates are not affected by fuel. The 35% of the rate that is affected by fuel will immediately lower as fuel prices decrease.   

For the average household, that could mean an extra $18 on your power bill in August. Which is an 8.5% increase over July.  

Electric bill increases are happening across the nation. 

Pennsylvania regulators said this year that customers will see increases of 6% to 45% effective June 1. This month, Cape Coral, Fla., residents are experiencing sharp increases – $32.70, or 27% – in their electric bills from the city's power provider Lee County Electric Cooperative due to high fuel prices.   

Perry notes that about 80% of the people served by the nation’s top 100 utilities pay more for energy than people in the TVA service area, and TVA’s industrial rates are lower than more than 95% of the nation’s top utilities.

While utilities across the country are affected by the fuel price increases, Perry points to TVA’s diversified generating portfolio as a strategic advantage. Since 2013, TVA has invested about $14 billion in new generating assets. Moving forward, TVA will invest over $2 billion in transmission system improvements, through 2025.

As a result, 56% of the agency’s energy is carbon-free (including solar, wind, nuclear and hydro power) and not affected by fuel volatility.    

Perry said, “Fuel price spikes like this demonstrate that our investments to have multiple ways to generate power helps protect customers from outside events that will affect your utility bill.”

TVA expects to reduce carbon from 2005 levels by 70% by 2030, 80% by 2035, and aspire to be net-zero by 2050. Removing carbon will further reduce the risk of inflation and geopolitical events on power bills. To help achieve the carbon reductions, 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. 

TVA expects natural gas prices to remain high through the rest of the year, Perry said, “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.”

Is Your Home Ready for Summer?

TVA wants to help make your home more efficient to save energy this summer. Visit energyright.com/residential/ for no-cost or low-cost energy-saving tips or 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/.  

TVA’s Home Uplift program is also available in many areas to help those struggling with a heavy energy burden.  Since 2018, TVA and our partners have invested over $40 million to provide valuable energy upgrades to over 3,700 income-qualified families through the end of this year. This program assists homeowners with no-cost improvements – saving them an average of 25% on their power bills annually. Home Uplift is offered in partnership with local power companies across the Tennessee Valley and is now open to renters where allowed by local power companies. A manufactured home program is being tested with six local power companies.   

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 companies for additional assistance programs.