Mar 18 - McClatchy-Tribune Regional News - Patrick Mccreless The Cullman Times, Ala.

For area residents who notice a slight jump in their electricity bills next month, the extra cost is not a mistake but a scheduled increase by the Tennessee Valley Authority.

Beginning April 1, the TVA will implement a 7 percent rate increase as well as a 55/100th of a cent per kilowatt-hour quarterly Fuel Cost Adjustment (FCA) that will impact all of its distributors, which includes the Cullman Electric Cooperative and the Cullman City Power Board.

"We did not plan on any additional increase," said Mike Manning, general manager of the city power board. "We're just passing on the cost from the TVA."

Grady Smith, president and CEO of Cullman Electric Co-Op said the cooperative is also just passing on the cost.

"At Cullman EC our largest expenditure is for TVA electricity that we purchase for our residential, commercial and industrial members," Smith said. "In fact, 72 cents of every dollar goes to TVA for wholesale electricity, leaving a very small margin for our remaining expenditures. Due to this fact, we must pass the rate increase along to our members."

According to a press release, the 7 percent increase in firm wholesale electric rates means the average TVA residential customer may expect an increase of about $4 to $7 on monthly retail electric bills. The FCA, which has been part of monthly consumer power bills since 2006, will cause the average residential customer's bill to increase between $2 and $5.

At Cullman Electric Co-Op, the two increases means residential customers using 1,000 kilowatt hours per month will see their monthly bill increase from $91.59 to $99.09.

Manning explained that city board customers who use an average 1,231 kilowatt hours per month can expect to pay an extra $8.81 on each power bill.

"The idea of a rate increase certainly isn't a pleasant thought for Cullman Electric Cooperative or our members," Smith said. "But as a trip to the gas pumps will attest, fuel costs are at record levels and unfortunately, TVA is not immune to the effects these spiraling expenses are having on the cost of doing business."

TVA scheduled the rate increase to provide an estimated $300 million in additional revenue to help fund new power generation and energy efficiency initiatives needed to meet the growing power demand of the Tennessee Valley.

Manning said though the latest FCA was not unexpected, it is higher than usual.

"The fuel cost adjustment is higher than forecasted primarily due to sustained drought conditions across the TVA region impacting needed hydro generation," Manning said.

TVA has been forced to purchase more coal and natural gas to operate its plants, which has caused an increase in demand and cost for fossil fuels.

"While the ongoing drought has impacted all of us, our pledge to our members remains the same," Smith said. "We will continue to work hard to keep our rates as low as possible while also providing the best service to our members."

TVA is the nation's largest public power provider, supplying electricity to large industries and 159 power distributors that serve approximately 8.8 million customers in seven southeastern states.

Residents who want to save money on their monthly power bills are encouraged to participate in TVA's home energy audit program. Now through June 30, TVA will send an energy conservation kit to every participant who completes a Home e-Valuation mail-in audit or completes the Energy Depot for Home Profile online audit. The energy conservation kit includes two compact fluorescent light bulbs, outlet and light switch gaskets, a water filter whistle, two faucet aerators, a hot water temperature gauge, a home thermometer and a "How to Save" energy conversation brochure.

Besides utilizing the kit, residents can save energy by remembering to turn off all lights, appliances and other electronics not needed with a power bar, to use the sleep mode on their computers and to use a microwave for cooking whenever possible instead of a stove burner or oven. Other tips include operating dishwashers and clothes washers only with full loads and only after 8 p.m., air drying dishes in the dishwasher, replacing incandescent bulbs with compact fluorescents and setting thermostats two degrees warmer during summer days and three degrees cooler on winter nights.

To request a mail-in audit for the energy conservation kit, visit www.energyright.com/savingenergy/evaluation.htm .