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Higher than usual utility bills? Here's why.

Huntsville Utilities customers have been questioning why their rates are increasing.
Credit: FOX54

HUNTSVILLE, Ala. — You may be seeing higher utility bills lately, and there's a reason for that. Like many parts of the globe, TVA, which supplies power to Huntsville Utilities, is experiencing supply chain issues that trickle down to our local power companies.

And the increase in prices? This has to do with something called the monthly 'fuel cost adjustment.'

Gary Whitely with Huntsville Utilities explains, "The monthly fuel cost adjustment is a portion of the electric rate that is a part of your Huntsville Utilities electric bill. That rate fluctuates each month. The fuel cost adjustment is based on the amount of fuel needed to purchase to generate the electricity."

Huntsville Utilities is a local power company which purchases electricity from the Tennessee valley Authority, which provides electricity to about 10 million homes across a seven state region around the Tennessee River Valley. And right now the demand for products that generate electricity is up. 

The best way to combat high utility bills? Whitely says, "Be mindful of that consumption on really warm days, utilize our summer cooling tips on our website. Keep your thermostat at 78 in the summertime, use ceiling fans to cool yourself. Ceiling fans cool people not rooms. Make sure you change the filters in your home, make sure that your home is as efficient as possible and you do everything possible to reduce your consumption." 

From Huntsville Utilities:

While TVA has a diverse generation mix, including a robust network of hydroelectric dams, solar sites, wind assets, and nuclear units, the fuel costs for natural gas and other power plants are experiencing sharp increases.

The monthly fuel cost is a component of Huntsville Utilities’ per kilowatt hour charge for residential and commercial electricity. While the monthly fuel cost does vary month to month, the variance is usually just a few tenths of a cent. Prior to recent events, that rate typically moved between 1.5 to 2.5 cents per kWh. However, in June the fuel cost increased to 2.715 cents. In July, it increased to 3.829 cents, and for August, TVA is forecasting a fuel cost adjustment of 4.612 cents.

Because of this sharp rise in fuel costs, the residential rate per kWh rate for June increased to 10 cents, then to approximately 11 cents in July, and will increase to roughly 12 cents in August.

While a change of three cents over three months may not sound like much, it can add up quickly if customers use large amounts of electricity.

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