Aug. 7--TVA power rates could increase by up to 20 percent Oct. 1, TVA Chief Executive Tom Kilgore said Wednesday.

"I don't have any final numbers," he said in a telephone conference, but he expects to announce an increase in the fuel cost adjustment portion of the Tennessee Valley Authority's rates between Aug. 15 and Aug. 20.

He said he expected the fuel cost adjustment to increase the total power bill for residential customers between 10 and 20 percent, but warned a higher increase is possible.

All area utilities said they would pass on the increase to their customers, effective Oct. 1.

Dan Gibbs, senior rate and planning engineer at Decatur Utilities, said the average residence uses about 1,300 kilowatts of electricity per month at a cost of $100. A 20 percent TVA increase would raise the average DU bill to $120.

Hartselle Utilities customers, who pay about $113 for 1,300 kilowatts, would see a $23 monthly increase, to $136.

The cost of 1,300 kilowatts of electricity in residences served by Joe Wheeler Electric Membership Corp. is $128, so it would increase by $26 a month.

The same usage in the Athens Utilities service area costs $110, so a 20 percent increase would come to about $22 a month.

The problem, Kilgore said, is an increase in the cost of fuel TVA uses to generate electricity, particularly coal and natural gas.

"I don't personally like to go out in times of rising gasoline prices and rising food prices and say your electric bill is going up, too," Kilgore said. "But that is what is happening."

Coal prices have increased 128 percent since December 2007, Kilgore said. Natural gas prices jumped 66 percent during the same period.

Kilgore said coal has become a global commodity, and demand is increasing dramatically in Asia. Complicating coal supply is flooding in the Midwest. Most TVA coal comes from west of the Mississippi River, and the flooding has slowed deliveries.

Coal transport costs also have jumped. Kilgore said transportation companies apply a fuel surcharge to coal deliveries, increasing TVA's costs.

Natural gas prices impact TVA in two ways. Not only does it produce power with natural gas, but most of its purchased power -- 11 percent of all power it distributes -- is generated with natural gas.

The only fuel costs facing TVA that are relatively flat are hydroelectric and nuclear.

Continuing drought conditions are reducing TVA's ability to produce hydroelectric power. Rainfall in fiscal 2008 is 23 percent below normal. Because of last summer's severe drought, runoff levels -- which dictate the amount of hydroelectric TVA can generate -- are 52 percent below normal.

Reduced water levels also will affect recreational activities.