News Release

Huntsville Utilities Customers to Pay Less for Power Beginning in October

September 14, 2006

Huntsville Utilities customers will see a decrease in their power bills when the TVA rate reduction goes into effect next month.

The Tennessee Valley Authority Board voted in late July for a reduction in wholesale power rates that are charged to the distributors of TVA power beginning October 1. TVA supplies all of the power distributed by Huntsville Utilities.

"On average, our residential customers will see a decrease on their electric power bills of just over $5.00 each month," said utility spokesman Bill Yell. "We are passing the TVA rate reduction directly to our customers."

In 2005, the average monthly electric bill for HU customers was $101.36 based on 1477 kilowatts of electricity used. Under the new rates, a customer's bill would be $96.18.

The new rates for HU customers will be $0.0647 for the first 1400 kilowatt hours used, a 4.19% reduction, and $0.07271 for all kilowatt hour usage over 1400 kWh, a 3.75% reduction from the current rates.

The TVA Board also approved a fuel cost adjustment mechanism that will allow the company to adjust rates quarterly, either up or down, as fuel and purchased power costs change beginning October 1. The result of TVA's quarterly review of fuel costs and the implemented adjustment will not be seen by power consumers until January of 2007.

The rate reduction will actually take affect when the October billing cycle for Huntsville Utilities begins on September 27.

"We are fortunate in the Tennessee Valley to have low electric rates compared to other areas of the country," stated Yell. "Our goal at HU is to work with TVA to help keep rates low for our customers."

Memphis Light, Gas and Water recently released a rate survey of 55 utilities from around the country that showed Huntsville Utilities had the lowest rates for a combined electric and water bill. The survey was based on 1,000 kilowatts of electricity and 11,000 gallons of water used.

The Huntsville Utilities electric system is the largest public power system in Alabama serving over 150,000 customers in Huntsville, Madison County and northern Marshall County.