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Summary/Recommendations: <br /> <br /> The rate base for TXU Gas is a true and accurate <br /> representation of rate base for the period December 31, 2002. <br /> All appropriate additions and deductions to rate base have been <br /> made. <br /> <br /> The depreciation studies of TXU Gas depreciable property as of <br /> December 31,2002 describes the extensive analysis performed <br /> and the resulting rates that are now appropriate for their <br /> respective property. The depreciation rates should be set at the <br /> recommended amounts in order to recover the Company's total <br /> investment in property over the estimated remaining life of the <br /> assets. The rates are designed to recover the significant <br /> increase in removal costs for distribution property the Company <br /> has experienced in recent years. These removal costs are <br /> projected to continue to increase in future years due to more <br /> stringent regulation. <br /> <br /> The inclusion of costs for the Safety Compliance Program in <br /> rates is an equitable way for the Company to recover the costs <br /> of complying with the Commission's directive in GUD No. 9151 <br /> and 9186. <br /> <br /> Watson - Summary of Testimony Page 2 of 2 <br /> <br /> <br />