NBU NEWS RELEASE

FOR IMMEDIATE RELEASE: March 20, 2008
Contact: Gretchen Reuwer, NBU Communications Manager, (830) 629-8486

Generation cost increases to impact NBU customers

NEW BRAUNFELS—Wholesale electric generators continue to see a rise in cost for natural gas and coal transportation, both key components of the price that is placed on power purchased by electric utilities. The escalation in costs is driving rate increases for purchased power that is affecting many utilities across Texas and the nation, including NBU. NBU customers will be seeing an 11% increase on their bills as part of the Power Cost Recovery Adjustment beginning on April 1.

“Electric rates are made up of several components, including distribution, transmission and generation costs,” NBU Communication Manager Gretchen Reuwer explains. “The distribution portion incorporates the operational costs that NBU charges for delivering electricity across our lines to the customer. The Power Cost Recovery Adjustment generally reflects the wholesale generator’s cost for fuel, rail transportation, and other operational costs, that are required to produce the electricity.”

“NBU has actually been successful in reducing its operational cost component twice in the past five years,” Reuwer says. “Our distribution charge and customer charge are not changing. However, the Power Cost Recovery Adjustment component that reflects wholesale generators’ charges for fuel and transportation costs will be increasing by approximately 11%. For a residential customer who typically uses 1,250 kWh, the increase will mean an additional $12.50.”

NBU takes a 12-month outlook on fuel costs estimates of its provider contracts and tries to stabilize the impact of this factor for its customers through the Power Cost Recovery Adjustment. As increases or decreases are passed through by wholesale generators, adjustments are made by NBU in order to keep the effect of fuel as stable as possible over 12 months. At the time the rates were established, the average price for natural gas was $7.70 per mmbtu. Since that time, the cost of natural gas has risen to an average price of $9.56 per mmbtu.

“The 11% increase in April sets rates at a level necessary to recover costs charged by our wholesale provider,” Reuwer says. “We will take the step of implementing this increase now and then in June, there may be the potential for another 1/2 cent increase. We will continue to make every effort to try to stabilize rates through the summer months while we monitor gas prices and see what adjustments will be necessary in the future.”

Any steps that customers can take to reduce their energy usage will play an important role in helping to lower their bills year round. NBU offers free energy audits to help customers identify areas in their homes and businesses where greater energy efficiency can be achieved. Customers are also encouraged to take advantage of the NBU Budget Billing Program and obtain free Energy Saver booklets at the Main Office. For more information about any of these programs and services, please call the NBU Customer Service Division at (830) 629-8400.