Shell: ‘Planning for the worst and hoping for the best’ with anticipated fuel charge increases

Published 3:41 pm Monday, May 2, 2022

Customers of Elizabethton Electric will see increases in their fuel adjustment charges in the upcoming year as the utilities provider faces an estimated $2.4 million fuel increase from TVA.

City officials originally expected a $3.5 million increase in fuel costs from TVA but recently discovered a computational error which lowered the cost to $2.4 million.

Preston Cobb, city finance director, said the additional expense will be passed on to the over 26,000 utility customers through monthly fuel charge adjustments.

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“TVA doesn’t eat (the added cost of purchasing power) … they pass it on to us and we don’t increase our rates, we just pass it onto customers,” Cobb said. “It’s part of the customer’s rate which fluctuates every month, and that happens now every month on the bill that they pay.

“It’s not a rate change from TVA or us, it’s a fuel adjustment.”

Elizabethton Electric General Manager Brandon Shell said the fuel adjustment and energy usage fluctuate monthly. Each month, the city posts the new fuel adjustment on the electric system website for customers to see. May’s adjustment will be $0.09941, a slight decline from $0.09968 in April.

Bills are calculated by multiplying the kilowatt hours used by the fuel adjustment, adding that total to the customer’s base monthly charge.

Shell provided an example of a customer who uses 900 kilowatt hours of electricity over a 30-day period. With a fuel adjustment of $0.09941, the usage charge is $89.71, and with the base rate of $15.29, the total bill will be $105.

“If a customer wants to see how much they spend per day, they can take their bill total and divide it by the number of days,” said Shell. “When you divide $105 by 30 days, you are looking at only $3.50 per day which is more reasonable than a hamburger these days and it provides the level of comfort the customer desires.”

Shell said the anticipated increase will be divided among all the customers.

“Although the energy charge is minimal, when you consider the number of kilowatt hours used by over 26,000 customers, you can see that adds up,” he said. “We are just planning for the worst and hoping for the best in that $2.4 million budgetary item.”