Sustained weak hydrology has cut back TVA’s hydro power generation in a major way but recent drops in some power and thermal fuel costs have enabled the Fuel Cost Adjustment (FCA) to be decreased.

TVA said it is benefiting from the reductions in purchase power and natural gas prices, and are forecast to remain so during the winter. The reduced costs have come from the weakening general economy. However, the rate fall has had no help from hydro power and the utility also noted that coal prices remain high.

The FCA was introduced two years ago after fuel costs jumped in the wake of major hurricane damage in the Gulf of Mexico.

In a separate move to reduce costs, the utility is to introduce changes in the management of two reservoirs. From mid-2009 it will no longer manage aquatic plants along private and commercially-developed shorelines of the Guntersville and Nickjack reservoirs. Stretches for public use will continue to have herbicide or mechanical harvesting treatment. With state responsibility for herbicide application, it will provide technical assistance to private and commercial operators.