News Release

Huntsville Utilities' Rates Among Lowest in the Valley

March 31, 2005

The Tennessee Valley Authority (TVA) recently released an annual report on electricity sales and rates that showed Huntsville Utilities' residential electric rates are in the lowest 5% for all 165 distributors of TVA power.

Huntsville's average residential rate per kilowatt-hour (kWh) (including customer charge) is 6.29 cents. The average rate for all TVA distributors is 6.85 cents. Of the five largest TVA distributors, Memphis, Nashville, Knoxville, Chattanooga and Huntsville, the average is 6.74 cents. A residential bill for 1000 kWh would be $63.60 in Huntsville, $64.69 in Memphis, $69.26 in Chattanooga, $69.66 in Knoxville and $71.46 in Nashville.

The average rate per kWh for all of Huntsville's sales (including residential, commercial and industrial rates) is 5.94 cents compared to the TVA distributor average of 6.42 cents, the five largest systems at 6.32 cents and all TVA municipal systems at 6.20 cents.

As all TVA distributors pay the same for wholesale power, the difference in rates is a direct result of operating efficiency. Operations and maintenance (O & M) expenses per customer was $124 for Huntsville; $242 average for all TVA distributors and $269 for the five largest systems.

Huntsville's margin on sales (money left to operate the utility after paying the TVA wholesale power bill) is 15%, the average for all distributors is 21%, and the average for the five largest systems is 20%.

Huntsville's rates look even better when compared to the national average retail price for electricity. In 2004, the national average residential rate was 8.97 cents.

Having reasonable rates not only saves Huntsville and Madison County customers money, it also encourages growth in business and jobs. The TVA region's total consumers grew at a 1.7% rate in 2004, while at the same time Huntsville's growth was 2.2%. In every category of distributors, kWh sales fell in 2004 while Huntsville showed a slight growth.

Huntsville Utilities is a municipally owned electric, natural gas and water utility system providing service to Huntsville, Madison County and northern Marshall County.