“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.

 Over the past four years, Huntsville Utilities has been working on a project to replace all of its computer based systems.  In the first phase, which was completed in 2009, all of the back office systems were updated which included areas such as purchasing, accounting and work order management.

 The second phase, which was announced today, is the complete revamping of the Customer Information Systems.

 The new Customer Information System is scheduled to go online on May 2.

 The most significant change that the customer will see will be that they will no longer be getting a postcard bill, but will be receiving a full-page bill in an envelope.

 Other changes customers will be seeing include:

•  New Due Dates
• Final Notice Included on the Letter-Size Bill.
• New Customer and Account Numbers
• Improved website; more functionality
• Average Monthly Billing program will replace the current Budget Billing program

 “All of these changes reflect our effort to be more efficient and help our customers conduct business with Huntsville Utilities with a minimum amount of effort,” stated spokesman Bill Yell.

 Over the next five weeks, customers will be receiving materials in the mail detailing the changes that are coming.

 “We encourage customers to review the materials they receive in the mail so that they will become familiar with these changes,” Yell said.

 The first mailing, going out this week, will be an oversized postcard announcing the changes.

 Next week a newsletter will be mailed that details the changes that customers will be seeing.

 The newsletter will be followed up with additional mailings as the utility prepares for the May 2 rollout.

Due to the inclement weather this week, the tree trimming work on Governors Drive will continue through Wednesday, February 16.

Huntsville Utilities’ tree contractor crews will be clearing trees away from power lines on eastern Governors Drive.

During the work, there may be some lane blockage from California Street to Monte Sano Boulevard, causing traffic delays.

Crews are scheduled to work this route Saturday, February 12, and Monday through Wednesday, February 14-16.

Rates for other rate classifications, including commercial and industrial customers will also see reductions of from 7.7 to 9.3%. The rate for transportation only customers will remain the same.

This is the second rate decrease for natural gas customers this year. Huntsville Utilities lowered rates by 10.1% in May.

With the new rate, the average residential gas customer could see their monthly bill reduced by over $20 a month during the peak heating months of December through February compared to last winter. The average residential gas customer uses approximately 10,000 cubic feet of gas during the heating season. Last winter that customer’s bill would have been $121.70, which includes a $4.50 monthly customer charge. Under the new rate, the same usage will result in a bill of $101.50. The average usage of 10,000 cubic feet per month is based on a 1,800 square foot house using natural gas for heating and water heating.

Natural gas rates have three components: the actual cost of the physical natural gas (commodity cost), the cost to transport that gas to Huntsville and the cost of operating the gas distribution system to deliver the gas to the customer.

The gas that Huntsville Utilities’ customers use is produced and refined along the Gulf Coast and then shipped by pipeline to north Alabama. Huntsville Utilities pays monthly transportation and storage costs associated with the delivery of the gas from the production area to Huntsville. Huntsville Utilities’ distribution costs, which include administrative costs as well as the costs necessary to provide required maintenance and capital investments in the gas system (as well as a 6% in lieu of tax payment paid to the city of Huntsville), are part of the rate.

Natural gas is a commodity traded on the Futures Market of the New York Mercantile Exchange (“NYMEX”). Pricing on NYMEX directly influences the price paid for natural gas by Huntsville Utilities. The commodity base price for gas in the new rate structure is $4.81.

The Huntsville Utilities gas system is the largest publicly-owned, not-for-profit gas system in Alabama serving over 47,000 customers in Huntsville and Madison County.

Rates for other rate classifications, including commercial and industrial customers will also see reductions of from 9.7 to 11.5%. The rate for transportation only customers will remain the same.

While there is limited use of natural gas in the summer months, many commercial and industrial customers use gas in their business operations. These will be the rates for gas use as the area moves into the heating season in the fall.

With the new rate, the average residential gas customer could see their monthly bill reduced by nearly $12 a month during the peak heating months of December through February. The average residential gas customer uses 10,000 cubic feet of gas during the heating season. Under the current rates they would have a bill of $121.70, which includes a $4.50 monthly customer charge. Under the new rate, the same usage would result in a bill of $109.90. The average usage of 10,000 cubic feet per month is based on a 1,800 square foot house using natural gas for heating and water heating.

Natural gas rates have three components: the actual cost of the physical natural gas (commodity cost), the cost to transport that gas to Huntsville and the cost of operating the gas distribution system to deliver the gas to the customer.

The gas that Huntsville Utilities’ customers use is produced and refined along the Gulf Coast and then shipped by pipeline to north Alabama. Huntsville Utilities pays monthly transportation and storage costs associated with the delivery of the gas from the production area to Huntsville. Huntsville Utilities’ distribution costs, which include administrative costs as well as the costs necessary to provide required maintenance and capital investments in the gas system (as well as a 6% in lieu of tax payment paid to the city of Huntsville), are part of the rate.

Natural gas is a commodity traded on the Futures Market of the New York Mercantile Exchange (“NYMEX”). Pricing on NYMEX directly influences the price paid for natural gas by Huntsville Utilities. The commodity base price for gas in the new rate structure is $5.60.

The Huntsville Utilities gas system is the largest publicly-owned, not-for-profit gas system in Alabama serving over 47,000 customers in Huntsville and Madison County.