Why did TVA implement the Fuel Cost Adjustment?
A. The FCA is due primarily to a forecast increase in coal costs. TVA maintains long-term contracts with suppliers to help keep coal costs stable and well below spot market prices. However, when suppliers have mine production problems, TVA must buy more expensive replacement coal on the spot market. Additionally, as coal contracts expire, TVA must replace them with new contracts at current market prices. Q. Does the Fuel Cost Adjustment appear on my bill? A. The FCA appears as a dollar amount on your bill. The adjustment is included in the “total amount due” for the month. Q. Do other utilities have a Fuel Cost Adjustment? A. Fuel Cost Adjustments are typically found in private, investor-owned utilities. Many gas companies, including Nashville Gas, have used a Fuel Cost Adjustment for years. TVA had a similar mechanism in the 1970’s. Q. Why does the price of fuel and purchased power fluctuate? A. Many factors can affect the costs of fuel and purchased power including the weather, chang
