Local electric customers are very likely to see their power bills go up starting Oct. 1, perhaps by the largest margin in 30 years.

Bowling Green Municipal Utilities and Warren Rural Electric Cooperative Corp. both buy their power from Tennessee Valley Authority, which produces electricity for 159 utilities and 8.8 million customers in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia.

On Wednesday, TVA Chief Executive Officer and President Tom Kilgore said that rising production costs will drive up the price it charges local distributors for that power. TVA is allowed to make such fuel cost adjustments quarterly, and this one could increase individual bills by 10 percent to 20 percent, Kilgore said. A 15 percent boost would be TVA’s biggest rate jump since 1977.

That means an extra $12 to $25 charge per month for the average household, he said. Local utilities expect to pass that increase directly on to their customers.

“We foresee that as being a pass-through,” said Miles McDaniel, BGMU manager of Business Development & Marketing. As with all previous TVA fuel cost adjustments, he doesn’t expect the BGMU board to add anything to that amount, he said.

The actual amount of the increase will be announced Aug. 14, said Warren RECC President Gary Dillard. It will go into effect Oct. 1, and Warren RECC will begin passing that cost on to its customers immediately, he said.

“We have no choice,” Dillard said.

Kilgore blamed the increase on two things: more expensive fuel for its power plants, and the third year of a drought that cuts TVA’s hydroelectric generating capacity.

“Prices for fuels commonly used to make electricity are skyrocketing,” driven by growing global demand, he said. “The TVA region is not immune to these cost pressures.”

TVA gets most of its energy from burning coal, and coal prices have more than doubled in the United States since December, according to TVA. The utility spent more than $2 billion last year on coal.

Meanwhile, natural gas prices have risen by more than 65 percent since December. TVA expects to spend $750 million on natural gas this year, compared with $493 million in 2007.

Natural gas fuels TVA’s peak-power stations. It also is the primary fuel source for power sold on the open market. TVA is buying 12 percent more power from other providers than a year ago and is paying more for it - $701 million during the first half of 2008, up $220 million from the same period last year.

TVA has to buy more power from other producers because of low water levels in the Tennessee River, where the power producer has its hydroelectric plants.

— The Associated Press contributed to this report.