MTE members can expect higher than normal bills this summer as the Tennessee Valley Authority’s (TVA) Fuel Cost Adjustment charge remains up, thanks primarily to much higher natural gas prices.
“As compared to last summer’s bills, we calculate the impact of the higher TVA charges to mean an average monthly increase of about $12 for residential members,” said Chris Jones, MTE’s CEO. “If you consume more than an average amount of electricity, that amount will be higher; and if you consume less than average, it will be less.
“We wish that it were otherwise, but MTE has no control over the FCA. It is a direct pass-through, meaning that every penny we collect for this goes straight to TVA.”
TVA uses the FCA to help manage fluctuations in the costs of fuels it uses to generate electricity. The FCA has been steady for several years, but with global supply and inflation issues, the FCA has been higher the last several months.
“Increased natural gas prices is the biggest culprit,” Jones said. “TVA generates about 25 percent of its electricity by burning natural gas. Prices for natural gas are way up all over the world.”
Why? Among many reasons:
On June 2, 2022, the EPA proposed a new rule that would undo the Trump-era reforms. Under the rule, states can now exercise more flexibility when conducting their permit reviews and determine a “reasonable period of time” rather than a set period of one year.
Production is stagnating, but the growth of fossil fuels is not part of the Biden administration’s agenda despite natural gas being cleaner than coal and oil for energy production. “Burning natural gas for energy results in fewer emissions of nearly all types of air pollutants and carbon dioxide than burning coal or petroleum products to produce an equal amount of energy,” according to the U.S. Energy Information Administration.
Despite proposing new rules to stonewall the American supply of natural gas, Biden wants to provide the resource to our European allies as they decouple from Russia. Domestic production is stagnating in the northeast because of pipeline projects being halted and delayed, but we are telling allies to rely on our liquid natural gas. Promises are being made that cannot be kept.
And let’s wait for winter when people cannot heat their homes unless they set them on fire.
Something will have to give.