NBU NEWS RELEASE

FOR IMMEDIATE RELEASE: April 4, 2006
Contact: Gretchen Reuwer, NBU Communications Manager, (830) 629-8486

Settlement to save NBU customers millions

NEW BRAUNFELS—New Braunfels Utilities (NBU) has successfully reached an agreement this month with the Lower Colorado River Authority (LCRA) in regards to a lawsuit filed in 2004 that is expected to save NBU electric customers an estimated $8 to $9 million over the next 10 years. The settlement specifically defines the contract load to be served by LCRA generation, protects NBU customers from any cost associated with the purchase of the second half of the Lost Pines Power Plant located in Bastrop, and allows NBU to recover higher costs of power incurred during the dispute.

In 2004, NBU opted to cap its contract load and not participate in costs associated with the purchase of the second half of the Lost Pines No. 1 Power Project. Based on model runs and estimates of future loads, NBU had determined that its customers would pay higher costs for power if the utility participated in the cost of the plant.

"In view of the fact that we believed the costs associated with this plant were not justified, it was in the best interest of our customers to exercise a clause in our contract that allowed NBU to opt out of participating," NBU CEO Paula DiFonzo explains. "A dispute arose over current contract provisions for opting out of any part of this plant and how those provisions would be applied to power costs."

NBU and LCRA representatives were able to reach the agreement through a series of negotiations that avoided an extended court process.

"We have worked to lower costs for our customers while maintaining an efficient and reliable electric system in New Braunfels," DiFonzo adds. "With the lawsuit behind us, NBU has the ability to diversify our power supply for our customers and continue with our efforts to keep costs down."

NBU is a municipally owned utility providing electricity, water and wastewater services to over 24,000 customers in New Braunfels and the surrounding community.