News Release

Electric Rates Drop for Fourth Month

December 23, 2009

Huntsville Utilities customers will pay less for power when the latest TVA rate reduction takes effect next week.

The Tennessee Valley Authority notified distributors that they were reducing the Fuel Cost Adjustment (FCA) that is charged to the distributors of TVA power for January 2010. TVA supplies all of the power distributed by Huntsville Utilities. Huntsville Utilities is passing the TVA rate reduction directly to customers. This will be the fourth consecutive month that TVA has lowered the fuel cost adjustment since they converted to changing the amount each month.

A Fuel Cost Adjustment is a variable energy rate that can fluctuate each month as TVA's fuel and purchased power costs rise and fall. In 2005, the price of natural gas, oil and coal used to generate electricity increased dramatically. Since then, TVA has found it difficult to predict the amount of revenue that is required to cover the cost of producing power. The Fuel Cost Adjustment allows TVA to more quickly match costs with revenue and avoid implementing permanent rate increases.

The new rates for Huntsville Utilities residential customers will be $0.06861 for the first 1400 kilowatt hours used and $0.07662 for all kilowatt hour usage over 1400 kWh. The rates currently charged are $0.07006 for the first 1400 kilowatt hours and $0.07807 for everything over that amount.

Over the past five years, the typical Huntsville Utilities residential customer’s January electric usage has been 1,750 kilo-watt hours. Based on that amount of use, the electric bill last January would have been $157.60. This January the bill would be $128.64, a 22.5% reduction. This includes the $5.77 monthly customer charge.

For every dollar that a Huntsville Utilities customer spends for electricity, 89 cents is returned to TVA for the cost of electricity.

Huntsville Utilities is a publicly-owned, not-for-profit utility serving over 161,000 customers in Huntsville, Madison County and northern Marshall County.