TVA Raises Fuel Charge, Blames Drought

With the drought drying up its cheapest source of electricity _ hydroelectric power _ the Tennessee Valley Authority on Thursday announced another quarterly charge to offset rising fuel costs. 

TVA said it will assess a fuel adjustment fee of four-tenths of a cent per kilowatt hour effective Oct. 1. Residential customers can expect an increase of $3 to $6 in their monthly bills. 

The country's largest public utility supplies electricity to about 8.7 million consumers across an 80,000-square-mile territory that includes most of Tennessee and parts of Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia. 

"Extreme dry conditions across the Tennessee Valley this year have reduced our hydro generation by more than 40 percent, driving our fuel and purchased power costs higher than we planned," TVA President and CEO Tom Kilgore said in a statement. 

"We are working hard to manage our resources and costs during these extraordinary conditions, but there is no way for us to avoid buying more power to offset the significant loss of hydro production." 

TVA gets about 60 percent of its electricity from coal-fired power plants, 30 percent from nuclear plants and 10 percent from its 29 hydroelectric dams. Renewable energy sources such as wind and solar account for less than 1 percent. 

January through July was among the driest on record in 118 years in the valley, TVA said. Although the utility has been able to maintain near normal levels in the main channel of the Tennessee River, upstream tributaries mostly in eastern Tennessee average 19 feet below normal, leaving little water for hydroelectric plants.