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<br />August 3, 2007 <br /> <br />MEMO TO: <br />FROM: <br />SUBJECT: <br /> <br />Geoffrey Gay, Kristen Doyle, Georgia Crump <br />Karl Nalepa <br />Atmos Energy Mid Tex 2006 GRIP Review <br /> <br />On May 31,2007, Atmos Energy Mid Tex (Atmos or Company) filed its latest request <br />for an interim rate adjustment for calendar year 2006 under the Gas Reliability <br />Infrastructure Program (GRIP). The Company's proposed increase to current customer or <br />meter charges is summarized in Table 1: <br /> <br />Rate Schedule Charge per Month <br />Rate R - Residential Sales $0.59 <br />Rate C - Commercial Sales $1.48 <br />Rate I - Industrial Sales $28.90 <br />Rate T - Transportation $28.90 <br /> <br />Table 1 <br /> <br />RJ Covington Consulting (RJC) has reviewed this GRIP filing and has confirmed that <br />Atmos has removed certain costs that were disallowed by the Texas Railroad <br />Commission (RRC) in Atmos' most recent rate proceeding.) However, RJC has identified <br />several other items which we believe are inappropriate to be recovered from ratepayers <br />through this interim rate adjustment. <br /> <br />Costs Removed <br /> <br />The costs removed by Atmos in this filing2 consistent with the RRC order in the most <br />recent rate proceeding are summarized in Table 2: <br /> <br />Adjustment Amount <br />Remove SSU 2006 Additions for Ancillary $ (107,520) <br />Equipment (office furniture) <br />Remove Mid- Tex 2006 Additions for Ancillary (100,317) <br />Equipment (artwork, office furniture, equipment) <br />.Adjustment for Changes in SSU Cost Centers (2,764,894) <br />2006 Overhead Allocations to Mid- Tex <br />Reduction of Mid- Tex 2006 Capitalized (20,718,589) <br />Overheads to 13.5% <br />Remove Direct Expense Account Costs Included (254,511 ) <br />in SSU 2006 Additions (see Table 3 for details) <br />Remove Direct Expense Account Charges (26,130) <br />Included in Mid-Tex 2006 Additions (see Table 3) <br />Remove Expense Account Charges within SSU (219,956) <br />Overheads Included in Mid- Tex 2006 Additions <br />(see Table 3) <br />Remove Expense Account Charges within (235,404) <br />Business Unit Overheads Included in Mid- Tex <br />2006 Additions (see Table 3) <br />Total $ (24427321) <br /> <br />Table 2 <br /> <br />1 GUD No. 9670, Order on Rehearing, June 13,2007. <br />2 Workpaper/Schedule A <br />