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Lloyo 816 Congress Avenue, Suite 1900 <br />Austin, Texas 78701 <br />Gosselink Telephone: (512) 322-5800 <br />Facsimile: (512) 472-0532 <br />ATTORNEYS AT LAW <br />www.lglawfirm.com <br />Ms. Doyle's Direct Line: (512) 322-5820 <br />Email: kdoyle@lglawfirm.com <br />MEMORANDUM <br />TO: Atmos City Steering Committee (ACSC) Members <br />FROM: Geoffrey Gay <br />Kristen Doyle <br />DATE: August 13, 2008 <br />RE: FINAL ACTION BY OCTOBER 1ST - Atmos RRM Settlement <br />The ACSC Settlement Committee (Jay Doegey - Arlington, Danny Reed - Fort Worth, <br />Mark Israelson - Plano, Don Wilson - Eastland, Cathy Cunningham - various ACSC cities, Phil <br />Boyd - Lewisville, Rodney Adams - Irving), with the advice and input of ACSC consultants and <br />lawyers, has worked to resolve the Company's pending $33.5 million Rate Review Mechanism <br />("RRM") rate increase request without the necessity of a protracted and costly contested case <br />proceeding. The attached tariff that reflects rates that will increase Atmos' revenues by $20 <br />million. The negotiated result represents a 35 percent reduction in Atmos' requested rate <br />increase. The monthly bill impact for an average residential customers is $0.81. <br />The RRM process was created by Atmos and ACSC to eliminate the piecemeal <br />ratemaking GRIP process in favor of an expedited rate review controlled by cities The <br />Company's filing is the first filing pursuant to the agreed RRM process. The ACSC Executive <br />Committee recommends approval of the negotiated resolution because it represents an outcome <br />that is equal to or better than the outcome expected from a lengthy contested case proceeding, <br />and maintains cities' role as a regulator of natural gas rates. <br />Please schedule consideration of the ordinance for your next available council <br />meeting. Final council action to approve the ordinance must take place by October lst. To <br />assist you, several documents are attached: <br />• An ordinance setting new rates. The approved Ordinance should include the <br />attached Tariff ("Attachment A" to the Ordinance) and Proof of Revenues <br />("Attachment B") <br />• A model staff report <br />• An explanation of key provisions of the RRM tariff and filing <br />Please contact Kristen (512/322-5820, kdoyle@lglawfirm.com) immediately if your city <br />is unable to meet the October 1 St deadline for final action. Once final action has been taken by <br />your city, please forward a copy of the ordinance to Atmos Mid-Tex and to our paralegal, Gary <br />Stiffler (fax number: 512/472-0532, gstiffler@lglawfirm.com). <br />Lloyd Gosselink Rochelle & 'rownsend, P.C. <br />M 000066 <br />