TVA has announced a decrease in its fuel cost adjustment effective Jan.1, 2009. Because the fuel cost adjustment is a per kilowatt-hour charge, amounts that consumers will save depends on the amount of energy they use. While savings will vary across the Tennessee Valley, residential consumers can expect a decrease ranging from about $4 to $8 in their monthly power bills.

 

We’ve heard from many of our members with questions and concerns about the TVA Fuel Cost Adjustment. To learn more about the FCA and how it impacts your monthly bill, visit www.tva.gov.

 

In the meantime, here are four things you need to know about the TVA Fuel Cost Adjustment

 

1. The Fuel Cost Adjustment is a charge from TVA. Cullman EC does not keep the money. We collect it and pass it on to TVA.

 

2. The FCA is NOT used to pay for gasoline or diesel fuel in Cullman EC’s vehicles. “Fuel” in the electric industry refers to coal and natural gas used to generate electricity at power plants. Although the price of gasoline has dropped recently, coal has not.

 

3. The FCA is adjusted quarterly. It is calculated based on the actual price of “fuel” over the previous nine months and projected costs over the next three months. If prices were higher than projected or are expected to increase, the FCA goes up. If prices were lower or are expected to decrease, the FCA goes down (see sidebar).

 

4. The FCA charge each month is based on individual usage. The more kilowatt hours you use, the higher your FCA charge will be.