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DRAFT F:ALICEIRESWORKICURRENTI ATMOS Suspension Res December 30. 2004 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, SUSPENDING THE PROPOSAL BY ATMOS- ENERGY CORP. TO IMPLEMENT INTERIM GRIP RATE ADJUSTMENTS FOR GAS UTILITY INVESTMENT IN 2003; AUTHORIZING PARTICIPATION WITH OTHER CITIES SERVED BY ATMOS- ENERGY CORP., MID- TEX DIVISION, IN A REVIEW AND INQUIRY INTO THE BASIS AND REASONABLENESS OF THE PROPOSED RATE ADJUSTMENTS; AUTHORIZING INTERVENTION IN ADMINISTRATIVE AND COURT PROCEEDINGS INVOLVING THE PROPOSED GRIP RATE ADJUSTMENTS; DESIGNATING A REPRESENTATIVE OF THE CITY TO SERVE ON A STEERING COMMITTEE; REQUIRING REIMBURSEMENT OF REASONABLE LEGAL AND CONSULTANT EXPENSES; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Paris, Paris, Texas ("City") and/or its residents are gas utility customers of Atmos- Energy Corp., Mid- Tex Division, ("Atmos Mid- Tex" or "the Company") and the City is a regulatory authority with an interest in the rates and charges of Atmos Mid- Tex; and, WHEREAS, Atmos Mid- Tex made filings with the City and the Railroad Commission of Texas ("Railroad Commission") in December, 2004, proposing to implement interim rate adjustments ("GRIP Rate Increases") pursuant to Texas Utilities Code § 104.301 on all customers served by Atmos Mid-Tex; and, WHEREAS, Atmos Energy Corporation has reported a twenty percent increase in profits for its fiscal year ended September 30, 2004, and projects further increases in profits in 2005; and, WHEREAS, in May, 2004, the Railroad Commission entered its Final Order in GUD No. 9400 authorizing a rate increase that will provide additional annual revenues of$I1.5 million for Atmos Mid-Tex; and WHEREAS, Atmos Mid- Tex has projected that it will experience annual cost savings of at least $40 million over the costs included in rates approved in GUD No. 9400 and said savings are likely to greatly exceed the annual revenue requirement associated with any reasonable increases in invested capital that form the basis of the proposed GRIP rate increases; and, WHEREAS ratepayers of Atmos Mid- Tex, including the City and its residents, will be adversely impacted by the proposed GRIP Rate Increases; and, WHEREAS, the City of Paris and its residents could benefit from coordination with other cities served by Atmos Mid- Tex ("Cities") in a review ofthe reasonableness ofthe proposed GRIP Rate Increases and joint participation in any proceedings at the Railroad Commission related to the proposed GRIP Rate Increases; and, WHEREAS, the reasonable costs associated with the participation of Cities in this rate proceeding are reimbursable from Atmos Mid-Tex; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS: