Huntsville Utilities: Cold temps (mostly) drove high power bills
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Huntsville Utilities is conducting a billing audit. Photo: Derek Lacey/Axios
Huntsville Utilities pointed to low temperatures as the main cause of higher-than-normal winter power bills.
Why it matters: Community concerns over high bills spurred City Council into calling in CEO Wes Kelley last week to explain.
What they're saying: "All I got was calls, calls, calls," from constituents about power bills, District 1 Council member Michelle Watkins said at the meeting.
- Kelley said a quarter of Huntsville Utilities' roughly 235,000 customers contacted HU about their bills.
How it works: Temperatures dipped below normal between January and February, a stretch matched closely by a single billing cycle for some customers, Kelley said.
- Cold weather also led to burst pipes and water leaks that exacerbated bills, and the expiration of a six-month suspension of penalties led to some customers having to catch up on those on top of normal bills.
By the numbers: When temperatures dip below 40 or so, Kelley said, heat pumps become less efficient and begin auxiliary heating, which uses electricity to heat metal coils.
- That can cause energy use to spike up to three times the normal rate, he said, leading to higher bills.
Zoom in: Tennessee Valley Authority's Fuel Cost Adjustment, which Kelley said accounts for about one-third of customers' monthly bills, is not new, but is newly itemized on the bill.
- The amount of that adjustment is set by TVA, he said, and changes based on the cost of fuel like natural gas and the cost of power TVA has to buy from outside providers.
- TVA also had a 5.25% base rate increase in 2024.
Catch up quick: Huntsville approved a 5.2% rate increase in October 2024, which went into effect in phases last year, with the final 1.2% of the increase taking effect in October 2025.
- Residential rates saw a $3 increase in the Residential Availability Charge and a $0.00288 per kWh increase in the residential consumption rate.
Context: The conversation also comes as HU is looking to consolidate its governance structure from separate water, gas and electric boards into a single board, and eyeing large-scale infrastructure upgrades.
- Huntsville Utilities is also partnering with Athens and Scottsboro in the North Alabama Public Energy District to construct a natural gas pipeline and explore electric generation in the area via natural gas.
What we're watching: HU's annual audit is due before its board in April, Kelley said, and the utility has contracted with firm Baker Tilly for a billing audit.
- "We've got a lot of outside entities going through our numbers right now," he said.
More from Axios: Energy execs say they're trying to address ratepayers' anger