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TVA: Nuclear plant shut-down one factor in higher power bills

  • Aug 29, 2022
Cullman Times

Aug. 27—For many Cullman County residents there is one number continuing to add pressure to already difficult economic times — the monthly total on their electric bills.

Christa Fowler, until recently, had been enjoying receiving a lower utility bill when she and her husband moved from an apartment in town to the county in September. Fowler's most recent bill was $316, up from her $194 bill in June. She said that even the most recent bill she received for the vacant house in town where her father lived before passing away in March was almost $150.

"I know there are people who have gotten higher bills, but every situation is different and when you are expecting one thing and then it's double that ... you're still just like, 'What the heck?'" Fowler said.

Similarly, Kirk and Kristy Teichmiller, who before receiving their most recent bill of more than $10,000, had never paid more than $8,537 for their business energy costs. Kirk said that he was anticipating a higher bill this month due to their increased water usage to operate the cool-cells used to operate their seven chicken houses in Berlin, but "this was unfortunately at a time when we were running everything at 100% capacity during the hottest months of the summer," Kirk said. Still, he said he was shocked when he read the total.

Kirk said that there is little leeway when it comes to the well-being of their animals, and that they are being forced to absorb these increased costs or make personal sacrifices.

"But that's just farming in general," he said.

The shutdown of a TVA nuclear facility had an impact on local energy costs, but there are larger factors influencing ballooning bills, a spokesperson for TVA said during an interview with The Cullman Times.

While Scott Brooks said that while the maintenance performed to the Watts Bar nuclear facility was the victim of unfortunate timing, the temporary loss of one of its nuclear reactors was a small piece in a much bigger picture.

The U.S. Energy Information Administration (EIA) estimates that between 2015-2021, 48 percent of the energy generated by the TVA comes from its three nuclear facilities, and Brooks said that shutting down one of Watts Bar's two reactors — and with five other reactors at other facilities operating at full capacity — resulted in only a fractional loss of energy.

"We're talking maybe 1,100 or so megawatts out of the 30,000 that we produce each day," he said. "That was certainly not something that we would have preferred to have to be dealing with in the middle of all these other increased costs, because nuclear power is one of our lowest cost forms of generating power."

There are many factors contributing to the rise in consumer electric bills, he said, including increased natural gas prices and Mother Nature.

According to the information website, natural gas prices in Alabama began climbing above national averages in March of this year. In May, Alabama prices averaged $9.66 per thousand cubic feet — 16.2 percent higher than the national average of $8.37. Earlier this month, the cost of natural gas — which is used to generate 28 percent of the TVA's electrical supply — climbed to over $9 per million British Thermal Units, the highest it has been since August of 2008. Brooks said that from June 2021 to June 2022 the TVA's cost for natural gas increased by 141 percent.

These increases are, in part, due to an increased demand overseas. As the war between Russia and Ukraine continues, Russia has scaled back its exports of liquefied natural gas to European countries which has caused them to look to the US to help fill that void. According to the EIA, the US exported 74 percent of its LNG to Europe this year compared to the annual average of 34 percent last year.

As the largest single source of electricity in the US, the increased demand being placed on the electrical grid to mitigate the higher temperatures of summer — in June the TVA's electrical load hit a record of 31,617 megawatts— are also driving up prices. In numbers provided by Manager of Communications and External Affairs with the Cullman Electric Cooperative Brian Lacy, the average Cullman County residential customer consumed 1,532 kilowatt hours (kWh) in the month of July. This is 269 kWh higher than last year's average of 1,263 kWh.

While Brooks said that the base rate that TVA charges the 153 local utility companies for their electricity has remained the same since 2019, there is a monthly fuel cost adjustment (FCA) fee that fluctuates depending on the cost of the raw materials needed for them to generate electricity. In June the TVA's FCA fee was 2.715 cents added to their base rate of roughly 7 cents per kWh, that number rose in July to 3.829. According to Brooks that number will rise to to 4.612 cents when customers receive their bill in September. Based on the average use of 1,532 kWh, this will result in the bills that Cullman County residents receive in September to be roughly $70 higher than before factoring in the FCA.

The rate is currently expected to drop to 3.064 cents for the bills customers will receive in October as the temperatures drop, but have the potential to quickly climb again in the event of a harsh winter.

The TVA, he said, attempts to mitigate the volatility of these costs by forecasting the hourly energy needs and then determining the lowest cost manner to serve that energy, but there are exceptions to this formula. Brooks points to the polar vortex in January of 2014, and the most reason unexpected high temperatures in June where fuel costs exceeded the TVA's predictions and were recouped during the next month's billing cycle.

In an article published on its website, TVA Senior Vice President Dour Perry says temperature is the biggest driver for power bills, not the cost of power.

"When it is 100 degrees outside, your A/C is running around the clock to try to keep your home cool. That means you are using much more electricity than you normally would," Perry said.


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