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<br />DRAFT <br /> <br />RESOLUTION NO. <br /> <br />F:A TIORNEY\RESWORK\CURREN1ì A NOS Shaw Cause Resolution <br />October 17,2005 <br /> <br />A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF P AIDS, <br />PARIS, TEXAS ORDERING ATMOS ENERGY, MID-TEX DIVISION TO <br />SHOW CAUSE REGARDING THE REASONABLENESS OF ITS <br />EXISTING NATURAL GAS DISTRIBUTION RATES WITHIN THE <br />CITY; REQUIRING ATMOS ENERGY, MID-TEX DIVISION TO <br />SUBMIT A RATE PACKAGE BASED ON A RATE YEAR ENDING JUNE <br />30, 2005; DIRECTING THAT SUCH FILING SHALL BE MADE BY <br />DECEMBER 31, 2005; REQUIRING REIMBURSEMENT OF <br />REASONABLE LEGAL AND CONSULTANT EXPENSES; REQUIRING <br />DELIVERY OF THIS RESOLUTION TO THE COMPANY AND LEGAL <br />COUNSEL; MAKING OTHER FINDINGS AND PROVISIONS RELATED <br />TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. <br /> <br />WHEREAS, the City is a regulatory authority under the Gas Utility Regulatory Act <br />("GURA") and has original jurisdiction over the gas utility rates of Atmos Mid- Tex; and <br /> <br />WHEREAS, the City has the authority under §§ 103.001 and 104.151, GURA, to initiate <br />a proceeding to determine whether the existing rates of a gas utility are unreasonable or in any <br />way in violation of any provision of law; and <br /> <br />WHEREAS, upon making a finding of unreasonableness, the City may determine the <br />just and reasonable rates to be charged by Atmos Mid-Tex; and <br /> <br />WHEREAS, Atmos Energy Corporation, the parent company of Atmos Mid- Tex has <br />recently experienced system-wide cost reductions due to the doubling of its nationwide customer <br />base with the acquisition of the assets of TXU Gas, and has reported to its investors that it has <br />experienced a significant increase in profits related to its Texas divisions; and <br /> <br />WHEREAS, Atmos Mid- Tex is charging rates approved based on the higher expenses <br />and equity-to-debt ratio of TXU Gas, rather than rates that would be justified based on Atmos' <br />lower expenses and equity-to-debt ratio; and <br /> <br />WHEREAS, ratepayers of Atmos Mid- Tex, including the City and its residents, will <br />suffer further unreasonable adverse impact from the GRIP rate increases approved by the Texas <br />Railroad Commission and the second GRIP filing recently made by Atmos Mid-Tex; and <br /> <br />WHEREAS, the Commission's failure to consider testimony and argument offered by <br />Cities during its consideration of the Company's piecemeal GRIP rate applications leaves Cities <br />no functional choice but to exercise its statutory right to exercise original jurisdiction over <br />Atmos' base rates and compel a comprehensive rate review; and <br /> <br />T <br /> <br />I <br />