The average electric customer will see a $1.89 increase for June service in comparison to the May 2012 amount.

The TVA FCA is subject to change monthly and is rolled into the overall rate that customers see on their monthly utility statements. These charges will go up or down each month depending on what TVA has to pay for fuel to generate electricity. None of the charges collected for the TVA FCA are kept at Huntsville Utilities.

For billing periods beginning with June 1, 2012, TVA’s total monthly fuel cost will change from 2.311 cents per kilowatt-hour to 2.363 cents per kilowatt-hour.

HU customers will pay 8.673 cents per kilowatt-hour (kWh) in June for the first 1400 kWh compared to 8.545 cents in May.  

Last June, HU customers paid 8.363 per kWh.

“These are very good ratings for the public utility sector and it means we can acquire the needed funds to finance construction projects to meet the energy needs of all the communities Huntsville Utilities serves,” stated Bill Pippin, President/CEO of Huntsville Utilities. “I am very proud of the employees and management in their work that allows us to receive this high rating,” Pippin added.

S & P cited Huntsville Utilities’ strong and stable financial performance, a strong and diverse regional economy and a manageable five-year capital improvement program in assigning the AA+ rating. S & P also affirmed its AA+/Stable rating on the utility’s long-term system debt outstanding.

Moody’s assigned a Aa1 rating on the utility’s Revenue Warrants. Moody’s cited a solid financial position, healthy debt service coverage and a diverse service area as strengths to support their rating. Moody’s also affirmed an Aa1 rating to the system’s outstanding debt.

Both rating agencies noted Huntsville Utilities’ strong relationship with its power supplier, the Tennessee Valley Authority (TVA), and noted Huntsville’s ability to maintain both low rates and system stability. Both agencies noted that the financial outlook for the utility was stable.

Huntsville Utilities is a publicly owned not-for-profit utility providing electric service to approximately 170,000 customers in Huntsville, Madison County and northern Marshall County, Alabama.

 This increase is planned to ensure that Huntsville Utilities remains financially strong as it continues to expand infrastructure to support the Huntsville area’s anticipated growth.

 “The 3.5 percent increase in the electric rate marks Huntsville Utilities’ first request for an increase in more than eight-and-a-half years,” said Huntsville Utilities’ President and CEO William Pippin. “During that same period, the Consumer Price Index has increased by more than 27 percent,” he noted.

 The effect of the increase on the average residential customer’s electric power bill will be only $4.90 per month. Huntsville Utilities held a work session in August with the City Council to explain the need for the rate increase. A public hearing was also held last month to allow customers to voice their opinions on the proposed rate change.

 “If Huntsville is to continue its strong growth, Huntsville Utilities must continue to build and maintain infrastructure to sustain that growth in the future just as we have in the past,” Pippin added.  “The steps we are taking now will keep our system viable and supportive of a vibrant, growing community.”

 The increase will take affect with meter readings in October of this year and will include an increase in the monthly availability charge from $5.88 to $8.88.