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HomeMy WebLinkAboutOrd 10-3527ORDINANCE NO. 10 -3527 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PLAINVIEW, TEXAS, "CITY APPROVING A NEGOTIATED RESOLUTION BETWEEN THE ATMOS WEST TEXAS CITIES STEERING COMMITTEE "STEERING COMMITTEE AND ATMOS ENERGY CORP., WEST TEXAS DIVISION "ATMOS WEST TEXAS" OR "COMPANY REGARDING THE COMPANY'S THIRD ANNUAL RATE REVIEW MECHANISM FILING IN ALL CITIES EXERCISING ORIGINAL JURISDICTION; DECLARING EXISTING RATES TO BE UNREASONABLE; REQUIRING THE COMPANY TO REIMBURSE CITIES' REASONABLE RATEMAKING EXPENSES; ADOPTING TARIFFS THAT REFLECT RATE ADJUSTMENTS CONSISTENT WITH THE NEGOTIATED SETTLEMENT AND FINDING THE RATES TO BE SET BY THE ATTACHED TARIFFS TO BE JUST AND REASONABLE; APPROVING ATMOS' PROOF OF REVENUES; EXTENDING THE RATE REVIEW MECHANISM FOR ONE YEAR WITH THE EXCLUSION OF A TRUE -UP COMPONENT; ADOPTING A SAVINGS CLAUSE; DETERMINING THAT THIS ORDINANCE WAS PASSED IN ACCORDANCE WITH THE REQUIREMENTS OF THE TEXAS OPEN MEETINGS ACT; DECLARING AN EFFECTIVE DATE; AND REQUIRING DELIVERY OF THIS ORDINANCE TO THE COMPANY AND THE STEERING COMMITTEE'S LEGAL COUNSEL. WHEREAS, the City of Plainview, Texas "City is a gas utility customer of Atmos Energy Corp., West Texas Division "Atmos West Texas" or "Company and a regulatory authority with an interest in the rates and charges of Atmos West Texas; and WHEREAS, the City and similarly situated municipalities working together as the Steering Committee of Cities Served by Atmos West Texas "Steering Committee were previously in continuing disagreement, dispute, and litigation with the Company over the application of Section 104.301 of the Texas Utilities Code and the interim rate adjustments "GRIP rate increases established by the Railroad Commission of Texas "RRC" or the "Commission and WHEREAS, pursuant to the terms of the November 15, 2007 stipulation settling the Company's GRIP rate increase application filed July 25, 2007, the Steering Committee and the Company collaboratively developed the Rate Review Mechanism "RRM tariff, ultimately authorized by the City in 2008, that allows for an expedited rate review process controlled in a three year experiment by Steering Committee Cities as a substitute to the current GRIP process; and WHEREAS, on or after April 1, 2010, Atmos West Texas filed with the City its third application pursuant to the RRM tariff to increase natural gas rates by approximately $4.76 million, such increase to be effective in every municipality within its West Texas Division; and Ordinance No. 10 -3527 Atmos West Texas RRM Ordinance Page 1 of 4 355 356 WHEREAS, the Steering Committee, assisted by its attorneys and consultants, coordinated the review of the Atmos West Texas RRM filing and designated the Executive Committee to resolve issues regarding the Company's RRM filing; and WHEREAS, the Company has filed evidence that existing rates are unreasonable and should be changed; and WHEREAS, independent analysis by the Steering Committee's rate expert concluded that Atmos West Texas is not able to justify a rate increase creating a more than $6 million differential between Steering Committee and Company positions; and WHEREAS, after negotiation and review, Atmos West Texas representatives and the Executive Committee were able to reach agreement that a $700,000 increase in the Company's revenue requirement is reasonable; and WHEREAS, the stipulation contemplates reimbursement of the Steering Committee's reasonable expenses associated with RRM applications; and WHEREAS, the Executive Committee, as well as Steering Committee lawyers and consultants, recommend that Steering Committee members approve the attached rate tariffs "Attachment A" to this Ordinance), which will increase the Company's revenue requirement by $700,000 consistent with the negotiated resolution; and WHEREAS, the attached tariffs implementing new rates are consistent with the negotiated resolution reached by the Steering Committee and are just, reasonable, and in the public interest; and WHEREAS, it is the intention of the parties that if the City determines any rates, revenues, terms and conditions, or benefits resulting from a Final Order or subsequent negotiated settlement approved in any proceeding addressing the issues raised in the Company's RRM filing would be more beneficial to the City than the terms of the attached tariffs, then the more favorable rates, revenues, terms and conditions, or benefits shall additionally accrue to the City; and WHEREAS, the negotiated resolution of the Company's RRM filing and the resulting rates are, as a whole, in the public interest; and WHEREAS, Atmos and the Steering Committee agree that the current RRM process should be continued for an additional year with the exclusion of a true -up component. NOW, THEREFORE, The City of Plainview hereby ordains that: SECTION I The findings set forth in this Ordinance are hereby in all things approved. Ordinance No. 10 -3527 Atmos West Texas RRM Ordinance Page 2 of 4 SECTION 11 The City Council finds that the existing rates for natural gas service provided by Atmos West Texas are unreasonable and new tariffs and the proof of revenues, which are attached hereto and incorporated herein as Attachment A, are just and reasonable and are hereby adopted. SECTION III The RRM process shall be continued for an additional year, but the current true up portion of the RRM proceeding shall not be included in the future filing. SECTION IV Atmos West Texas shall reimburse the reasonable rate making expenses of the Steering Committee Cities in processing the Company's rate application. SECTION V To the extent any resolution or ordinance previously adopted by the Council is inconsistent with this Ordinance, it is hereby repealed. SECTION VI The meeting at which this Ordinance was approved was in all things conducted in strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. SECTION VII If any one or more sections or clauses of this Ordinance is adjudged to be unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining provisions of this Ordinance and the remaining provisions of the Ordinance shall be interpreted as if the offending section or clause never existed. SECTION VIII If the City determines any rates, revenues, terms and conditions, or benefits resulting from a Final Order or subsequent negotiated settlement approved in any proceeding addressing the issues raised in the Company's RRM filing would be more beneficial to the City than the terms of the attached tariffs, then the more favorable rates, revenues, terms and conditions, or benefits shall additionally accrue to the City. Ordinance No. 10 -3527 Atmos West Texas RRM Ordinance Page 3 of 4 357 358 SECTION IX This Ordinance shall become effective from and after its passage with rates authorized by attached tariffs to be effective for bills rendered on or after August 15, 2010. SECTION X A copy of this Ordinance shall be sent to Atmos West Texas, care of C. W. "Bill" Guy, at Atmos Energy Corporation, 5110 80 Street, Lubbock, Texas 79424 and to Geoffrey Gay, Steering Committee Counsel, at Lloyd Gosselink Rochelle Townsend, P.C., 816 Congress Ave., Austin, Texas 78701. PASSED AND APPROVED on first reading this 24 day of August, 2010. PASSED AND APPROVED on second reading this 1 -.�.y of September, 2010. ATTEST: Belinda Hinojosa, City Se APPROVED AS TO FORM: Leslie pear Pea ce, City Attorney Ordinance No. 10 -3527 /itkfr h C. Anderson, .yor Atmos West Texas RRM Ordinance Page 4 of 4 RATE SCHEDULE: WEST TEXAS RATE REVIEW MECHANISM APPLICABLE TO: WEST TEXAS SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 11/15/2008 PAGE: 1 ATMOS ENERGY CORPORATION WEST TEXAS DISTRIBUTION SYSTEM Purpose: This mechanism is designed to provide annual earnings transparency. All rate calculations under this tariff shall be made on a system wide basis. If, through the implementation of the provisions of this mechanism, it is determined that rates should be decreased or increased, then rates will be adjusted accordingly in the manner set forth herein. The rate adjustments implemented under this mechanism will reflect annual changes in the Company's cost of service and rate base. This adjustment will be authorized for an Initial Implementation Period. With the conclusion of the final rate adjustment, if any, for the Initial Implementation Period, each entity having original jurisdiction may revoke, amend, or approve Subsequent Implementation Period(s) for, the mechanism. Definitions a) The Annual Evaluation Date shall be the date the Company will make its annual filing under this mechanism. The Annual Evaluation Date shall be no later than April 1, of each year. This filing shall be effective in electronic form where practicable. The initial filing shall be made no later than September 1, 2008. b) Audited Financial Data shall mean the Company's books and records related to the Company's West Texas operating area and shared services operations. Audited Financial Data shall not require the schedules and information provided under this taliff to undergo a separate financial audit by an outside auditing firm similar to the Company's annual financial audit. c) The Evaluation Period is defined as the twelve month period ending December 31, of each calendar year. The initial Evaluation Period shall be calendar year 2007. d) The Rate Effective Period is defined as the earlier of the twelve month period for which rates determined under this mechanism will be in effect or subsequent rates are implemented. e) Per Connection Basis is defined as the existing average number of West Texas Rate Division active meters to customers during the Evaluation Period. f) Initial Implementation Period is defined as the four (4) year period commencing with the Company's filing under this mechanism for the calendar year 2007, effective November 15, 2008, and shall conclude with the implementation of rate adjustments, if any, for the fourth Rate Effective Period. g) Subsequent Implementation Period is defined as any three (3) year period after the conclusion of the Initial Implementation Period. h) Final Order is defined as the most recent order establishing the Company's latest effective rates for the area in which the mechanism is implemented, and shall include municipal rate ordinances and resolutions. Rate Review Mechanism The Company shall file with each regulatory authority having original jurisdiction over the Company's rates the schedules specified below for the Evaluation Period, with the filing to be made by the Annual Evaluation Date following the end of the Evaluation Period. The schedules, which will be based upon the Company's Audited Financial Data, as adjusted, and will include the following: 359 RATE SCHEDULE: WEST TEXAS RATE REVIEW MECHANISM APPLICABLE TO: WEST TEXAS SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 11/15/2008 PAGE: 2 360 ATMOS ENERGY CORPORATION WEST TEXAS DISTRIBUTION SYSTEM a) Company's actual gross plant in service, accumulated depreciation, accumulated deferred income taxes, inventory, working capital, and other rate base components for the Evaluation Period. Evaluation Period ending balances for these items will be used for the calculation of rates for the Rate Effective Period. The ratemaking treatments, principles, findings and adjustments included in the Final Order will apply where they are not in conflict or specifically addressed elsewhere in this tariff or the letter agreement. The 4 part allocation methodology as approved for the Mid -Tex Operating Division in GUD 9670 will be used in place of the current 3 part methodology used by the West Texas Operating Division. Regulatory adjustments due to prior regulatory rate base adjustment disallowances will be maintained. The RRM Schedules Information section of this tariff identifies those ADIT components to be included in the calculation of rate base for the Rate Effective Period calculations. b) The Company's depreciation expense, operating and maintenance expense, and taxes other than income taxes booked in the period will be used for calculation purposes. Depreciation rates booked in the period will be those approved in the Final Order, or the rate most recently approved. All calculation methodologies will be those approved in the Final Order except where noted or included in this tariff, or in the most recent order addressing the methodology. In addition, the Company shall exclude from operating and maintenance expense the discretionary costs to be disallowed from Rider RRM filings listed in the RRM Schedules and Information section of this tariff. c) Return on Equity (ROE) shall be maintained at 9.6 d) Cost of debt will reflect actual cost for the Evaluation Period. Evaluation Period ending balances for cost of debt and capital structure will be used for the calculation of rates for the Rate Effective Period. Capital structure will be the actual Evaluation Period ratio of long -term debt and equity, with percentage equity not to exceed 48.1% equity, based on the calculation methodology outcomes used above. e) All applicable accounting adjustments along with all supporting work papers. Such adjustments may include: 1) Pro -forma adjustments to update and annualize costs and revenue billing determinants for the Rate Effective Period. 2) Pro -forma or other adjustments required to properly account for atypical, unusual, or nonrecurring events recorded during the Evaluation Period. f) Shared Services allocation factors shall be recalculated each year based on the latest component factors used during the Evaluation Period, as referenced in (a) above. RATE SCHEDULE: WEST TEXAS RATE REVIEW MECHANISM APPLICABLE TO: WEST TEXAS SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 11/15/2008 PAGE: 3 ATMOS ENERGY CORPORATION WEST TEXAS DISTRIBUTION SYSTEM Calculation of Rate Adjustment a) The Company shall provide additional schedules indicating the following revenue deficiency /sufficiency calculations using the methodology accepted in the Final Order. Evaluation Period ending balances will be used for the calculation of rates for the Rate Effective Period. These schedules shall identify the rate adjustments necessary for the setting of prospective rates for the Rate Effective Period. The net result of these rate adjustments shall be reflected in the proposed new rates to be established for the Rate Effective Period. In calculating the required rate adjustments, such adjustments will be made pro ratably to the customer charge and usage charge based upon actual revenue generated, as adjusted under the Company's approved Weather Normalization Adjustment (WNA) Rider. Provided, however, that neither the Residential nor the Commercial customer charges may increase more than 20% per year. b) The Company may also adjust rates for the Rate Effective Period to include recovery of any known and measurable changes to operating and maintenance costs including, but not limited to, all payroll and compensation expense, all benefit expense, all pension expense, insurance costs, materials and supplies, bad debt costs, all medical expense, transportation and building and lease costs for the Rate Effective Period. Provided, however, that adjustments may only be made for costs that are reasonable and necessary. Additionally, utility plant and rate base for the Rate Effective Period will be established by using the Evaluation Period ending balances, including associated changes in depreciation and amortization expense and taxes. In calculating the Company's known and measurable changes for prospective RRM adjustment purposes, the following limitations will apply, on a Per Connection Basis. 1. Operating and Maintenance expenses per connection for the Rate Effective Period cannot increase more than 5% per year without specific identification and justification. Any proposed adjustment above 5% per year, is subject to the provisions of the Evaluation Procedures of this tariff. Such procedures provide that the regulatory authority will review the proposed adjustment and that the Company and regulatory authority will work collaboratively to seek agreement on the proposed adjustments to the Company's schedules and proposed rates. Justification for such expenditures over the cap shall include an event or combination of events beyond the control of the Company. The beginning adjusted Operation and Maintenance expense per connection for the 2008 RRM Rate Effective Period will be limited to not exceed the final O &M as established for the 12 month period ended December 31, 2007 divided by the connections for the period. The increase in adjusted Operation and Maintenance expenses per connection for the 2009 Rate Effective Period and subsequent Rate Effective periods cannot exceed 5% per year, without specific identification and justification. The RRM Schedule Information section of this tariff provides an example calculation of the 5% limit. 2. Net plant investment per connection for the Rate Effective Period cannot increase more than 5% per year without specific identification and justification. Any proposed adjustment above 5% per year, is subject to the provisions of the Evaluation Procedures of this tariff. Such procedures provide that the regulatory authority will review the proposed adjustment and that the Company and regulatory authority will work collaboratively seek agreement on the proposed adjustments to the Company's schedules and proposed rates. However, in performing a cap test to verify compliance, Company shall exclude any changes in net plant investment associated with federal, state, or local mandates related to safety, compliance, or road moves. 361 RATE SCHEDULE: WEST TEXAS RATE REVIEW MECHANISM APPLICABLE TO: WEST TEXAS SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 11/15/2008 PAGE: 4 362 ATMOS ENERGY CORPORATION WEST TEXAS DISTRIBUTION SYSTEM Attestation Evaluation Procedures The initial 2008 prospective rate will be set using net plant established for the 12 months ended December 31, 2007. The rate increase limitations set forth in this tariff shall not preclude the Company from recovering any excluded net plant costs during a subsequent Evaluation Period in which the 5% limitation for net plant investment is not reached or in a subsequent Statement of Intent case. To the extent that the Company seeks to recover any excluded net plant costs during a subsequent Evaluation Period in which the 5% limitation for net plant investment is not reached or in a subsequent Statement of Intent case, the Company shall identify these costs as a specific line item in the schedule accompanying the RRM rate adjustment filing. The regulatory authority may disallow any net plant investment that is not shown to be prudently incurred. Approval by the regulatory authority of net plant investment pursuant to the provisions of this tariff shall constitute a finding that such net plant investment was prudently incurred. Such finding of prudence shall not be subject to further review in a subsequent Evaluation Period or Statement of Intent filing. c) The Company also shall provide a schedule demonstrating the "proof of revenues" relied upon to calculate the proposed rate for the Rate Effective Period. The proposed rates shall conform as closely as is practicable to the revenue allocation principles approved in the Final Order. A sworn statement shall be filed by the Company's Chief Officer in Charge of West Texas Operations affirming that the filed schedules are in compliance with the provisions of this mechanism and are true and correct to the best of his /her knowledge, information and belief. No testimony shall be filed. The regulatory authority having original jurisdiction over the Company's rates shall have no Tess than ninety (90) days to review the Company's filed schedules and work papers. The Company will be prepared to provide all supplemental information as may be requested to ensure adequate review by the relevant regulatory authority. The Company shall not unilaterally impose any limits upon the provision of supplemental information and such information shall be provided within ten (10) working days of the original request. The regulatory authority may propose any adjustments it determines to be required to bring the schedules into compliance with the above provisions. During and following the ninety (90) day review period and a thirty (30) day response period, the Company and the regulatory authority will work collaboratively and seek agreement on, the proposed adjustments to the Company's schedule and proposed rates. If agreement has been reached by the Company and the regulatory authority, the regulatory authority shall authorize an increase or decrease to the Company's rates so as to achieve the revenue levels indicated for the Rate Effective Period. If, at the end of the thirty (30) day response period, the Company and the regulatory authority have not reached agreement on the proposed adjustments, the Company shall have the right to appeal the regulatory authority's action or inaction to the Railroad Commission of Texas. Upon the filing of any appeal, the Company shall have the right to implement the proposed RRM rate adjustment, subject to refund. RATE SCHEDULE: WEST TEXAS RATE REVIEW MECHANISM APPLICABLE TO: WEST TEXAS SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 11/15/2008 PAGE: 5 ATMOS ENERGY CORPORATION WEST TEXAS DISTRIBUTION SYSTEM If approved by the entity exercising original jurisdiction, the rates established pursuant to the Rate Review Mechanism for the first Rate Effective Period shall be effective for bills rendered on or after November 15, 2008. Thereafter, rates established pursuant to the Rate Review Mechanism for subsequent Rate Effective Periods, if approved as provided herein, shall be effective on August 1 of each year. Reconsideration and Appeal Orders issued pursuant to this mechanism are ratemaking orders and shall be subject to appeal under Sections 102.001(b) and 103.021, et seq., of the Texas Utilities Code (Vernon 2007). Notice Notice of the annual Rate Review Mechanism filing shall be provided pursuant to Section 104.103, TEX. UTIL. CODE ANN. no later than forty -five (45) days after the Company makes its annual filing pursuant to this tariff. The notice to customers shall include the following information: a) a description of the proposed revision of rates and schedules; b) the effect the proposed revision of rates is expected to have on the rates applicable to each customer class and on an average bill for each affected customer; c) the service area or areas in which the proposed rate adjustment would apply; d) the date the proposed rate adjustment was filed with the regulatory authority; and e) the Company's address, telephone number and website where information concerning the proposed rate adjustment may be obtained. RRM Schedules and Information Accumulated Deferred Income Tax "ADIT Items To Be Recognized in Rate Base The following list identifies those ADIT components to be included in the calculation of rate base for both the Evaluation Period and Rate Effective Period calculations: WTX Rate Division:Gas Plant in Service Insurance Accruals Benefit Accruals Deferred Expense Projects Allowance for Doubtful Accounts Customer Advances Regulatory Asset West Texas Regulatory Liability West Texas Other Plant 363 RATE SCHEDULE: WEST TEXAS RATE REVIEW MECHANISM APPLICABLE TO: WEST TEXAS SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 11/15/2008 PAGE: 6 364 ATMOS ENERGY CORPORATION WEST TEXAS DISTRIBUTION SYSTEM Accumulated Deferred Income Tax "ADIT) Items To Be Recognized in Rate Base (continued): SSU Customer Support: Gas Plant in Service SSU General Office: Gas Plant in Service Insurance Accruals Benefits Accruals Deferred Expense Projects Prepaid Expenses Regulatory Liability Atmos 109 FAS 115 Adjustment Treasury Lock Adjustment State Bonus Depreciation R D Credit Valuation Allowance Other Plant Discretionary Costs to Be Disallowed from Rider RRM filings The following types of employee reimbursed expenses and directly incurred costs are to be removed from all expense and rate base amounts included within Rider RRM filings for the Evaluation Period and for the Rate Effective Period: Amounts incurred for travel, meals or entertainment of employee spouses. Amounts for air travel that exceed published commercial coach air fares. Amounts incurred for hotel rooms exceeding $250 per night inclusive of taxes and fees assessed on such rooms. Amounts for alcoholic beverages. Amounts paid for admission to entertainment, sports, art or cultural events, and all event sponsorship costs. Amounts for social club dues or fees. RATE SCHEDULE: WEST TEXAS RATE REVIEW MECHANISM APPLICABLE TO: WEST TEXAS SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 11/15/2008 PAGE: 7 ATMOS ENERGY CORPORATION WEST TEXAS DISTRIBUTION SYSTEM Example Calculation Operation Maintenance Expense Cap Test *AII Amounts are Hypothetical, and do not correspond with other example calculations Evaluation Period (Calendar Year) 2007 2008 2009 Benchmark O &M per Connection (increased 5% annually) Gas Service Connections [1] 97.23 102.99 107.19 1,553,000 1,560,000 1,567,000 Maximum O &M Allowed 151,000,000 159,260,400 167,966,730 [1] For illustration purposes only, Gas Service Connections are estimated for 2007 and are assumed to increase 7,000 connections per year. Therefore, 'Maximum O &M Allowed' is estimated for 2008 and 2009. Actual Gas Service Connections for 2007 will be used to calculate the 2007 O &M per Connection. For each subsequent Evaluation Period, the prior period O &M per Connection will be increased by 5 and then multiplied by the actual Gas Service Connections for the same period to derive the 'Maximum O &M Allowed'. 365 Charge Amount Customer Charge 7.50 Commodity Charge Bills Rendered on and after 08/15/2010 All Consumption 0.27514 per Ccf RATE SCHEDULE: RESIDENTIAL GAS SERVICE APPLICABLE TO: WEST TEXAS CITIES SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 08/15/2010 PAGE: 366 ATMOS ENERGY CORPORATION WEST TEXAS CITIES DISTRIBUTION SYSTEM Availability This schedule is applicable to general use by Residential customers for heating, cooking, refrigeration, water heating and other similar type uses. This schedule is not available for service to premises with an alternative supply of natural gas. Monthly Rate The West Texas System Gas Cost Adjustment Rider applies to this schedule. The West Texas System Weather Normalization Adjustment Rider applies to this schedule. The West Texas Cities Rate Review mechanism (RRM) Adjustment Rider applies to this schedule. The West Texas Cities Conservation Program Adjustment Rider applies to this schedule. Charge Amount Customer Charge 14.50 Commodity Charge Bills Rendered on and after 08/15/2010 All Consumption 0.18484 per Ccf RATE SCHEDULE: COMMERCIAL GAS SERVICE APPLICABLE TO: WEST TEXAS CITIES SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 08/15/2010 PAGE: ATMOS ENERGY CORPORATION WEST TEXAS CITIES DISTRIBUTION SYSTEM Availability This schedule is applicable to Commercial customers, including hospitals and churches, for heating, cooking, refrigeration, water heating and other similar type uses. This schedule is not available for service to premises with an alternative supply of natural gas. Monthly Rate The West Texas System Gas Cost Adjustment Rider applies to this schedule. The West Texas System Weather Normalization Adjustment Rider applies to this schedule. The West Texas Cities Rate Review Mechanism (RRM) Adjustment Rider applies to this schedule. The West Texas Cities Conservation Program Adjustment Rider applies to this schedule. 367 Charge Amount Customer Charge 110.00 Commodity Charge Bills Rendered on and after 08/15/2010 First 1,000 ccf 0.12859 per Ccf All over 1,000 ccf 0.10277 per Ccf RATE SCHEDULE: SMALL INDUSTRIAL GAS SERVICE APPLICABLE TO: WEST TEXAS CITIES SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 08/15/2010 PAGE: 368 ATMOS ENERGY CORPORATION WEST TEXAS CITIES DISTRIBUTION SYSTEM Availability This schedule is applicable to the sales of any industrial or commercial customer whose predominant use of natural gas is other than space heating, cooking, water heating or other similar type uses. Service under this schedule is available to eligible customers following execution of a contract specifying the maximum hourly load. This schedule is not available for service to premises with an alternative supply of natural gas. Monthly Rate The West Texas System Gas Cost Adjustment Rider applies to this schedule. The West Texas Cities Rate Review Mechanism (RRM) Adjustment Rider applies to this schedule. The West Texas Cities Conservation Program Adjustment Rider applies to this schedule. Charge Amount Customer Charge 61.50 Commodity Charge Bills Rendered on and after 08/15/2010 All Consumption 0.13806 per Ccf RATE SCHEDULE: STATE INSTITUTION GAS SERVICE APPLICABLE TO: WEST TEXAS CITIES SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 08/15/2010 PAGE: ATMOS ENERGY CORPORATION WEST TEXAS CITIES DISTRIBUTION SYSTEM Availability This schedule is applicable gas service to state agencies (as provided in Texas utilities Code, Section 104.202) including, but not limited to, state college and universities, MHMR Schools, agriculture, highway and public safety departments, prisons, and other facilities owned or operated by the State of Texas for the purpose of heating, cooking, refrigeration, water heating and other similar type uses. Monthly Rate The West Texas System Gas Cost Adjustment Rider applies to this schedule. The West Texas System Weather Normalization Adjustment Rider applies to this schedule. The West Texas Cities Rate Review Mechanism (RRM) Adjustment Rider applies to this schedule. The West Texas Cities Conservation Program Adjustment Rider applies to this schedule. 369 Charge Amount Customer Charge 55.00 Commodity Charge Bills Rendered on and after 08/15/2010 All Consumption 0.12786 per Ccf RATE SCHEDULE: PUBLIC AUTHORITY APPLICABLE TO: WEST TEXAS CITIES SERVICE AREA Inside City Limits (ICL) EFFECTIVE DATE: Bills Rendered on and after 08/15/2010 PAGE: 370 ATMOS ENERGY CORPORATION WEST TEXAS DIVISION Availability This schedule is applicable to general use by Public Authority type customers, including public schools, for heating, cooking, refrigeration, water heating and other similar type uses. This schedule is not available to premises with an alternative supply of natural gas. Monthly Rate The West Texas System Gas Cost Adjustment Rider applies to this schedule. The West Texas System Weather Normalization Adjustment Rider applies to this schedule. The West Texas Cities Rate Review Mechanism (RRM) Adjustment Rider applies to this schedule. The West Texas Cities Conservation Program Adjustment Rider applies to this schedule.