RPU announces a proposed 4% electric rate increase and no water increase effective January 1

ROCHESTER, MN—Rochester Public Utilities (RPU) announced today, a proposed 2008 budget that includes a 4% electric rate increase and no rate increase for the water utility effective January 1. If the increase is approved by the Utility Board and the City Council, the average residential customer’s bill will increase by approximately $3.00 per month.

The electric increase is driven primarily by RPU’s increase in wholesale power costs. RPU’s wholesale energy provider, Southern Minnesota Municipal Power Agency (SMMPA) recently announced an increase of 2.5% for their member utilities, of which RPU is one of 18 members. RPU’s purchased power cost for 2007 was budgeted at almost $80 million, about two-thirds of the utilities budget.

RPU is not proposing a rate increase for water customers. RPU’s water rates continue to be among the lowest in the region when compared with similar size water utilities. Through previous financing and prior rate increases, cash-flow has stabilized and will not require a rate increase for the water utility.

This proposed electric increase reflects inflationary increases and will help fund a number of major projects and initiatives that RPU has planned for 2008 including:

• Planned distribution system expansion and reliability improvements to serve community growth

• Continued work on the CapX2020 transmission project

“We are pleased to continue providing water to our customers at rates among the lowest in the region. The Utility Board’s consideration of a modest increase in electric rates will allow us to invest in infrastructure to continue providing the same reliable service that our customers have come to expect and, in addition, we will be able to meet the needs of the growing Rochester community,” said Larry Koshire, RPU General Manager.

The City Council will have to approve any increase recommended by the Utility Board. The next Utility Board meeting will be held on December 13 and the next City Council meeting will be on December 19. For more information go to www.rpu.org or call (507) 280-1540.

About Rochester Public Utilities

As the municipal utility of Rochester, Minn., for more than 110 years, RPU provides high-quality and reliable electricity to over 45,000 customers. Water customers number more than 34,000. RPU continually investigates innovative technologies to help customers realize the best value from the services they receive. Current initiatives include fuel cell research, wind power, and photovoltaic offerings.

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