TVA Increases Fuel Cost Adjustment March 1

MTEMC members will see their rates go up about five percent when they get their bills in March, as the Tennesssee Valley Authority has increased its Fuel Cost Adjustment (FCA) for the first time since Oct. 2008.

“Because the FCA has been a negative number for the last year and essentially a credit on member bills,” MTEMC Communications Coordinator Todd Palmer said, “the FCA line item, while it is increasing, will still be a credit…just less of one.”

The FCA will increase from February’s rate of –0.896 cents per kilowatt-hour to -0.575 cents per kilowatt-hour.

“Because the Fuel Cost Adjustment is a per kilowatt-hour charge, the actual percentage change in members’ bills will differ depending on the amount of energy they use,” Palmer said. “Rates are still lower than they’ve been in a couple of years — more than 20 percent lower than in Dec. 2008.”

TVA cites the primary reason for the FCA increase as a result of colder than normal weather in January, which increased sales and TVA fuel costs.

The FCA is a billing mechanism TVA uses to help recover largely uncontrollable fuel and purchased power costs. Since TVA is the power supplier for Middle Tennessee Electric and the FCA is a TVA charge, all of the charge collected from Middle Tennessee Electric members goes back to TVA.