News Release

February 5, 2008

KCC to hold Public Hearing in $5 million Rate Increase Request by Atmos Energy

The Kansas Corporation Commission (KCC) has scheduled a public hearing concerning a $5 million rate increase request by Atmos Energy (Atmos) for natural gas service. The KCC staff calculates the increase at approximately 12%.

The public hearing is scheduled for 7:00 p.m., Wednesday, February 13, 2008, Olathe City Hall, Council Chambers,100 E. Santa Fe, Olathe, Kansas.

The public hearing provides an opportunity for customers to testify before the Commission. Following a question and answer period with commission staff and company representatives, customers will have the opportunity to make their formal statement to the three-member Commission.

Written comments will also be accepted from Atmos customers through February 25, 2008. Comments regarding the case should reference Docket No. 08-ATMG-280-RTS and sent to the Kansas Corporation Commission, Office of Public Affairs and Consumer Protection, 1500 SW Arrowhead Road, Topeka, Kansas 66606. Comments may also be submitted at or by calling 800.662.0027.

The requested rate increase would affect only the portions of a customer's bill that relate to Atmos' gas delivery costs – the fixed monthly "Facility Charge" and the per Ccf (unit of gas) delivery charge "Commodity Charge." The rate case does not involve the cost of the natural gas collected from customers through the Purchased Gas Adjustment (PGA). The cost of the gas is not regulated and is subject to market forces such as supply and demand, storage volumes and weather.

Under the KCC's calculation of the company's proposal, residential customers would experience an overall average increase approximately $3.19 per month, or 15 percent. This includes a request to increase the monthly Facility Charge from $8.00 per month to $13.75 per month, and a reduction in the Commodity Charge from approximately $.17 per Ccf to $.14 per Ccf.

Commercial customers and public authority, would experience an overall average increase of approximately $6.85 per month, or 10 percent. This includes a request to increase the Facility Charge from $16.00 per month to $34.00 per month, and a reduction in the Commodity Charge from approximately $.17 per Ccf to $.14 per Ccf for all general service customers.

Atmos is also proposing the implementation of a Gas System Reliability Surcharge and an Advanced Metering Infrastructure Surcharge to provide for expedited recovery of investments made in safety infrastructure and metering infrastructure investment between the time rates resulting from this rate case are implemented and the time of the next rate case. The Advanced Metering Infrastructure is a fixed automated meter reading network, which would allow customer access to their usage information on a real-time basis.

In its application, Atmos said the increase was necessary to cover ongoing investment in its distribution system providing for continued safe, reliable and efficient natural gas service. The company further stated it has experienced increases in wages, medical expenses, and material and supply costs.

The Commission will conduct an evidentiary hearing beginning March 3, 2008, at 9:00 a.m. in the first floor hearing room at its Topeka office. At this hearing, KCC Staff, Atmos representatives and interveners such as the Citizens' Utility Ratepayer Board (CURB), will present their case to the Commission. The Commission must issue a decision in this case by May 12, 2008.

Atmos' last rate increase of $2.5 million was approved on January 5, 2004.

Atmos' corporate office is located in Dallas, Texas. It is the largest natural gas distribution company in the United States, supplying natural gas service to approximately 3.2 million customers in 12 states. In Kansas, Atmos provides natural gas service to approximately 123,750 customers.

For more information about the requested rate increase or the public hearing, contact the Commission's Office of Public Affairs and Consumer Protection at 800.662.0027. Any person requiring special accommodations at the hearing site under The Americans with Disabilities Act needs to give notice to the Commission prior to the hearing date.

Docket No. 08-ATMG-280-RTS