Fayetteville Public Utilities announced this week that customers will see rate changes on their electric bills effective October 1 reflecting a 2% increase in the utility's wholesale electric base rate from the Tennessee Valley Authority.  FPU will be passing through this increase to its customers but will not be raising its local portion of the electric rate at this time.  This increase will result in a 1.5% increase to a customer's base energy rate.  At the same time, the total monthly fuel cost will be decreasing effective October 1. 

FPU customers who use a monthly average of 1,330 kilowatts will see their bills decrease overall by $3.45.  In September, 1,330 kilowatts cost $141.22; in October the same kilowatt use will cost $137.77.

"When considering all the changes in the TVA rates for October plus the usual temperature changes as we head into cooler weather, consumers could see their electric bills decrease over the next couple of months, depending on their usage," says Britt Dye, CEO/General Manager.

"When TVA adjusts wholesale electric rates, each power distributor has an option at that particular time of increasing its own local rates according to a conservative, pre-approved percentage allowed by TVA. This percentage is a standard ‘guideline amount' allowable to individual power distributors through TVA as one of our governing bodies," explains Dye.

"After reviewing the increases in costs of materials and system upgrades which FPU has absorbed over the past few years by cutting internal operational costs, we are still in a position where no action is necessary at this time locally to maintain our level of service," he says.

"For several years, FPU has controlled local operations and maintenance costs internally," he says, "and as we entered this new fiscal year, we continued to make cuts to our operating budgets in order to control costs and hold our local rates steady."

FPU records show that, although TVA has adjusted wholesale rates several times over the years, local rates have remained stable.  In October 2005, TVA increased rates by 7.52%; FPU passed along the wholesale increase, but did not raise its local rate.  In April 2006, TVA raised rates again by 9.95%; FPU took no action again with its local rate.  In October 2006, TVA decreased rates by 4.5%.  Rather than pass along the entire amount of the rate reduction, FPU elected to retain most of the decrease to recover growing operations and materials costs and pass along a .5% rate reduction to local customers.  In April 2008, TVA increased its wholesale rate to distributors by 7.0%.  At that time, FPU raised its local electric retail rate by 2% to help recover increasing energy, operational, and maintenance costs.  FPU's local increase was 1% below the allowable TVA guideline of 3% granted for distributors to recover costs of operation.  In October of the same year, TVA increased its wholesale rate by 3.1%, and FPU passed along the wholesale increase, but did not raise its local rate.  In October 2009, TVA increased wholesale rates by 9%; FPU took no action beyond passing along the TVA increase.  With the TVA rate restructuring that took place in April of this year, FPU absorbed an increase of approximately $62,000.  Since 2008, Fayetteville Public Utilities has not raised local electric rates to its customers.

"Keeping your electric rates affordable is part of FPU's mission statement," says Dye.  "We will do all we can to be good stewards of your utility system and the rates you pay for good service, but we will not sacrifice the quality of service in order to save money.  At this time, we feel that FPU can maintain our level of service for the electric system at the current rate which you pay for that service.  There will be no change in the local portion, in addition to the increase passed through from TVA, of your electric rate come October 1, but if our operational costs continue to increase, we will be forced to do what's necessary to provide safe and reliable service to this community."

To help electric consumers with their energy costs, FPU offers a budget billing plan to average monthly electric and natural gas bills.  FPU also offers the TVA Do-It-Yourself Energy Audit online at http://www.fpu-tn.com/.  Visit FPU and pick up a mail-in coupon for the paper version of the energy audit.

"We will continue to work with our customers as we are able," says Dye.