News Release

Huntsville Utilities Reduces Natural Gas Rates

April 11, 2006

Huntsville Utilities announced today a $2.16 rate decrease for all natural gas customers. The rates for Huntsville Utilities' residential customers are being lowered by almost 14% from $15.45 to $13.29 per one thousand cubic feet (1,000 mcf). The new rate will be effective on meter readings beginning April 26.

With the new rate, the average gas customer could see their monthly bill reduced by over $21 a month. During the peak heating months of December through February, the average Utilities' gas customer uses 10,000 cubic feet of gas. Under the current rates they would have a bill of $157.00, which includes a $2.50 monthly customer charge. Under the new rate, the same usage would result in a bill of $135.40. 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.

Huntsville Utilities last lowered gas rates in November 2005 after having to increase rates twice last fall when natural gas prices were at the highest level in history. Hurricane activity in the Gulf of Mexico created short-term supply disruptions as nearly 100% of natural gas production was halted for a period of time during Hurricane Katrina in August and Hurricane Rita in September. Before Katrina, some natural gas production had just recovered from Hurricane Ivan, which hit the Gulf Coast in September of 2004. Today, 13% of natural gas production is still offline in the Gulf.

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 cost customers pay for natural gas reflects what Huntsville Utilities pays for gas supplies it obtains from the gas production areas along the Gulf Coast. Huntsville Utilities does not earn a profit on the cost of the gas purchased to meet system requirements.

"This rate decrease is the direct result of the easing of price pressures on natural gas since the first of the year," stated spokesman Bill Yell. "The natural gas market continues to be very volatile and we may have to reevaluate our rates this fall."

The Huntsville Utilities gas system is the largest public gas system in Alabama serving over 44,000 customers in Huntsville and Madison County.