2010-039 ORD ATMOS SITES STEERING COMMITTEE AND ATMOS ENERGY NATURAL GAS RATES

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ATMOS ENERGY CORPORATION MID-TEX DNISION Exhibit A to Settlement Agreement Attachment A to Ordinance RIDER: RRM - RATE REVIEW MECHANISM APPLICABLE TO: All Cities except the City ot Dallas and all unincorporated areas EFFECTIVE DATE: Bills Rendered on or after 10/0112010 1. 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 rnanner set forth herein. The rate adjustments implemented under this mechanism will reflect annual changes in the Company's cost of seroice and rate base. This Rider RRM will be effective for the period commencing with the Company's RRM filing on April 1, 2011, and cpncluding with the implementation of new, final rates established pursuant to the general rate case that Atmos will file on or before June 1, 2013. II. Definitions a) The Annuat 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. b) Audited Financial Data shall mean the Company's books and records related to the Company's Mid- Tex operating area and shared services operations. Audited Financial Data shall not require the schedules and information provided under this tariff to undergo a separate financial audit by an outside auditing firm similar to the Company's annual financial audit. c) The Evaluation Reriod is defined as the twelve month period ending December 31, of each calendar year. d) The Rate Effective Period is defined as the later 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 Mid-7ex active meters to customers during the Evaluation Period. f} 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. III. 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 Evalua6on 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 provided in the same farmat as Atmos' RRM filing with municipalities on March 15, 2010, will exclude a true-up computation, but will include the following: a) Evaluation Period ending balances for actual gross plant in service, accumulated depreciation, accumulated deferred income taxes, inventory, working capital, and other rate base components wifl 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. Regulatory adjustments due to prior regulatory rate base adjustment disallowances will be maintained. Cash working capital will be calcuiated using the lead/lag days approved in the Final Order. Accumulated deferred income taxes (ADIT) will be calculated using the methodology used in the Final Order. The RRM Schedules & Information section of this tariff identifies those ADIT components to be included in the calculation of rate base for both the Evaluation Period and Rate Effective Period calculations.