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Form 8-K
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      <DIV
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      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>UNITED
      STATES</STRONG></FONT></DIV></TD></TR>
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    <TD vAlign=top align=middle width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>SECURITIES
      AND EXCHANGE COMMISSION</STRONG></FONT></DIV></TD></TR>
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    <TD vAlign=top align=middle width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Washington,
      D.C. 20549</STRONG></FONT></DIV></TD></TR>
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    <TD vAlign=top align=middle width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>FORM
      8-K</STRONG></FONT></DIV></TD></TR>
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    <TD vAlign=top align=middle width="31%">&nbsp;</TD>
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    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>CURRENT
      REPORT</STRONG></FONT></DIV></TD></TR>
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    <TD vAlign=top align=left width="21%">&nbsp;</TD>
    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>PURSUANT
      TO SECTION 13 OR 15(d)</STRONG></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>&nbsp;</STRONG></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>OF</STRONG></FONT></DIV></TD></TR>
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      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>THE
      SECURITIES EXCHANGE ACT OF 1934</STRONG></FONT></DIV></TD></TR>
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    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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    <TD vAlign=top align=left width="21%">&nbsp;</TD>
    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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      <DIV
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      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date
      of Report (Date of earliest event reported): May 9,
2005</FONT></DIV></TD></TR>
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    <TD vAlign=top align=middle width="31%">&nbsp;</TD>
    <TD vAlign=top align=left width="21%">&nbsp;</TD>
    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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    <TD vAlign=top align=middle width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><STRONG>AGL
      RESOURCES INC.</STRONG></FONT></DIV></TD></TR>
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    <TD vAlign=top align=middle width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      name of registrant as specified in its charter)</FONT></DIV></TD></TR>
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    <TD vAlign=top align=left width="21%">&nbsp;</TD>
    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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      <DIV
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      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Georgia</STRONG></FONT></DIV></TD>
    <TD vAlign=top align=middle width="21%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>1-14174</STRONG></FONT></DIV></TD>
    <TD vAlign=top align=middle width="39%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>58-2210952</STRONG></FONT></DIV></TD></TR>
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      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
      or other jurisdiction of incorporation)</FONT></DIV></TD>
    <TD vAlign=top align=middle width="21%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Commission
      File No.)</FONT></DIV></TD>
    <TD vAlign=top align=middle width="39%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(I.R.S.
      Employer Identification No.)</FONT></DIV></TD></TR>
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    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Ten
      Peachtree Place NE Atlanta, Georgia 30309</STRONG></FONT></DIV></TD></TR>
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      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
      and zip code of principal executive offices) </FONT></DIV></TD></TR>
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    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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    <TD vAlign=top align=left width="21%">&nbsp;</TD>
    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>404-584-4000</STRONG></FONT></DIV></TD></TR>
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    <TD vAlign=top align=middle width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant's
      telephone number, including area code)</FONT></DIV></TD></TR>
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    <TD vAlign=top align=left width="21%">&nbsp;</TD>
    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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    <TD vAlign=top align=left width="39%">&nbsp;</TD></TR>
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      <DIV
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      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Not
      Applicable</STRONG></FONT></DIV></TD></TR>
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      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=center><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
      name or former address, if changed since last report)</FONT></DIV></TD></TR>
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    <TD vAlign=top align=middle width="91%" colSpan=3>&nbsp;</TD></TR>
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    <TD vAlign=top align=left width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Check
      the appropriate box below if the Form 8-K filing is intended to
      simultaneously satisfy the filing obligation of the registrant under any
      of the following provisions:</FONT></DIV></TD></TR>
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    <TD vAlign=top align=left width="91%" colSpan=3>&nbsp;</TD></TR>
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    <TD vAlign=top align=left width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[ ]
      Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)</FONT></DIV></TD></TR>
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    <TD vAlign=top align=left width="91%" colSpan=3>&nbsp;</TD></TR>
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    <TD vAlign=top align=left width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[ ]
      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</FONT></DIV></TD></TR>
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    <TD vAlign=top align=left width="91%" colSpan=3>&nbsp;</TD></TR>
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    <TD vAlign=top align=left width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[ ]
      Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="91%" colSpan=3>&nbsp;</TD></TR>
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    <TD vAlign=top align=left width="91%" colSpan=3>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[ ]
      Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV><BR>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV style="WIDTH: 100%" align=left>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</FONT></DIV></DIV>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV><BR>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Item
7.01 Regulation FD Disclosure</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Included
is the Petition of Atlanta Gas Light Company for Rehearing, Reconsideration and
Oral Argument in the Atlanta Gas Light rate case (Georgia Public Service
Commission Docket No. 18638-U).&nbsp; The petition was filed on May 9, 2005, by
Atlanta Gas Light, a wholly owned subsidiary of AGL Resources Inc., with the
Georgia Public Service Commission, in order to request that the Commission
rehear and reconsider its April 29, 2005 Order in the above-noted rate
case.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>
<DIV>
<HR align=left width="100%" color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>STATE
OF GEORGIA</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>BEFORE
THE GEORGIA PUBLIC SERVICE COMMISSION</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>In
Re: Atlanta Gas Light Company&#8217;s</STRONG></FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>)</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>2004-2005
Rate Case</STRONG></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>)</STRONG></FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT id=TAB2
style="COLOR: black; LETTER-SPACING: 27pt">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Docket
No. 18638-U</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>)</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Petition
of Atlanta Gas Light Company</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG><U>For
Rehearing, Reconsideration and Oral Argument</U></STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to Georgia Public Service Commission (&#8220;Commission&#8221;) Rule 515-2-1-.08, Atlanta
Gas Light Company (&#8220;AGLC&#8221; or the &#8220;Company&#8221;) hereby respectfully requests that
the Commission rehear and reconsider its April 29, 2005 Order (&#8220;Order&#8221;) in the
above-captioned proceeding and schedule oral argument, and as grounds therefor
shows the following:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
petition is filed within ten days from the entry of the Order.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On May
25, 2004, the Commission ordered the Company to file a general rate case so as
to determine six issues, including whether the three-year Performance Based Rate
Plan (&#8220;PBR&#8221;) that would end on April 30, 2005 should be discontinued, extended
or otherwise modified. AGLC complied with that order by filing direct testimony
and exhibits, including a cost of service study consistent with the Commission&#8217;s
Minimum Filing Requirements (&#8220;MFRs&#8221;). The Order contains the Commission&#8217;s
ruling, findings and conclusions with respect to AGLC&#8217;s filing.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As more
particularly set forth below, the Order contains errors of law and fact that
should be corrected.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>LACK
OF EXPLANATION</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission, as with any agency or court, must engage in reasoned decision-making
fully explaining the bases for its orders and conclusions. Thus, to determine
whether an agency has acted in an arbitrary and capricious fashion, a court
inquires whether the agency has "examine[d] the relevant data and articulate[d]
a satisfactory explanation for its action including a rational connection
between the facts found and the choice made." </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM><U>Motor
Vehicle Mfrs. Ass'n v. State Farm Mut. Ins. Co., </U></EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>463
U.S. 29, 42, 103 S.Ct. 2856, 286</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> (1983).
Generally, a court will deem arbitrary and capricious an agency&#8217;s decision where
"[the agency] entirely failed to consider an important aspect of the problem,
offered an explanation for its decision that runs counter to the evidence before
the agency, or is so implausible that it could not be ascribed to a difference
in view or the product of agency expertise." </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Id.</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> at 43.
Thus, the grounds upon which the agency acted must be clearly disclosed and the
agency must make plain its course of inquiry, its analysis and its reasoning in
its decision. </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM><U>Am.
Petroleum Inst. v. E.P.A.,540 F.2d 1023, 1029</U></EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
(10</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>th</SUP></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> Cir.
1976) (construing </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Motor
Vehicle Mfrs.</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">).
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>See
also Sierra Club v. Leavitt</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 368
F.3d 1300, 1302 (11</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>th</SUP></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> Cir.
2004) (deference to agency is inappropriate where the agency fails entirely to
address or explain the issue it faced). This law is reflected in O.C.G.A.
&#167;&nbsp;50-13-17(b), that requires: &#8220;Findings of fact shall be accompanied by a
concise and explicit statement of the underlying facts supporting the findings.&#8221;
The Order erroneously provides no explanation for its factual findings or legal
conclusions. In fact, the Commission orders $51 million in revenue requirement
reductions from AGLC&#8217;s case without any explanation. Without knowing the bases
for the Commission&#8217;s decisions and conclusions, AGLC is unable to respond
adequately in this petition and therefore reserves the right to file a Petition
for Rehearing, Reconsideration and for Oral Argument should the Commission issue
a more detailed order. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>PBR</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">5.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
example of how the Order is arbitrary and capricious is in not addressing the
issue of the PBR. The first of the six issues that the Commission determined (in
the procedural and scheduling orders) would be resolved in this case was whether
the PBR should be extended. In fact, this is the issue that required AGLC to
file its case in the first place. The Order is completely silent as to any
determination or rationale by the Commission for the PBR being
discontinued.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>UNILATERAL
AMENDMENT OF THE PRP SETTLEMENT AGREEMENT</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">6.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission erred by adopting a Comprehensive Rate Plan (&#8220;CRP&#8221;) that amends the
Pipe Replacement Program (&#8220;PRP&#8221;) settlement agreement entered into by AGLC and
the Commission Staff in Docket No. 8516-U by freezing the PRP surcharge at the
current PRP rate and supposedly by rolling PRP revenue requirements into base
rates. The PRP settlement (pp.25-26) establishes a specific formula for the PRP
surcharge that AGLC is allowed under the settlement agreement to recover in
return for replacing pipe pursuant to the settlement agreement. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 72pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The cost
recovery will be designed to complement and supplement the regulatory process
then in place. This recovery will be through a surcharge to then existing rates.
The Company shall be allowed to include capital cost of all property additions
and improvements minus such amounts already included in the Commission&#8217;s last
determination of the Company&#8217;s revenue requirements&#8230;.The Company will also be
allowed any net current expense not recovered above or in previous revenue
requirement determinations . . . . </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thus, the
PRP settlement agreement provides that there is an amount of capital cost and
expense for pipe replacement in base rates, i.e., in &#8220;the Company&#8217;s revenue
requirements.&#8221; Indeed, this is how this provision was understood at the time it
was negotiated and has been implemented consistently since that time -- that the
surcharge recovers any PRP costs not included in the Company&#8217;s revenue
requirement. The CRP does not change the Company&#8217;s revenue requirement, which
the Commission determined is $400,896,000 (Order Findings of Fact &#182;&nbsp;2).
Thus, pursuant to the CRP, AGLC would not be able to recover all of its PRP
costs through the surcharge and the base rate pipe replacement portion of its
revenue requirement as agreed in the PRP agreement. Instead, under the adopted
plan, the unmet PRP revenue requirement would be in theory &#8220;rolled into base
rates&#8221; (Order Findings of Fact &#182;&nbsp;10) and recovered (if the CRP mechanism
actually works in practice) through an amount above the base rate revenue
requirement. This is a novel idea that constitutes a unilateral amendment or
abrogation of the PRP settlement agreement. Such an amendment to an existing
settlement agreement cannot be adopted without AGLC&#8217;s consent.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">7.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
unilateral abrogation of the PRP settlement agreement constitutes an impairment
of AGLC&#8217;s contract with the Commission and its Staff in violation of the
Contract Clause of the United States and Georgia Constitutions. The United
States Constitution, Art. I, &#167;&nbsp;10, cl. 1, provides, &#8220;No State shall . . .
pass any Law impairing the Obligation of Contracts.&#8221; Similarly, Georgia&#8217;s
Constitution provides, &#8220;No bill of attainder, ex post facto law, retroactive
law, or laws impairing the obligation of contract or making irrevocable grant of
special privileges or immunities shall be passed.&#8221; Art. I, &#167; 10, &#182; X. These
provisions ensure that a State cannot enter into a binding contract with another
party, obtain a benefit from that contract, and then unilaterally determine that
it will no longer honor its obligations under the contract. </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>See</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>United
States v. Winstar Corp.</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 518
U.S. 839, 876 (1996) (noting that the federal Contract Clause protects parties
who enter into contracts with States); </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Swann
v. Board of Trustees</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 257 Ga.
450, 454, 360 S.E.2d 395, 398 (1987) (holding that Georgia&#8217;s Contract Clause
ensures that a subsequent ordinance cannot reduce the benefit to a party who has
performed pursuant to a contract while the ordinance was in effect).
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Once a
State forms a contract with a party and the party&#8217;s rights vest, the Contract
Clauses of the United States and Georgia Constitutions protect the contracting
party from subsequent State action affecting those rights. The Georgia
Constitution flatly prohibits the State from undertaking any action that
interferes with rights that have vested. </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>See</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Swann</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 257 Ga.
at 454, 360 S.E.2d at 398; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Smith
v. City of Atlanta</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 167 Ga.
App. 458, 461, 306 S.E.2d 720, 723-24 (1983); </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Spengler
v. Employers Com. Union Ins. Co.</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 131 Ga.
App. 443, 453, 206 S.E.2d 693, 700 (1974). For example, in </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Smith</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, the
Georgia Court of Appeals held that a municipality could not prevent its employee
from receiving compensation for work he had already performed by invoking a
subsequently enacted statutory immunity. 167 Ga. App. at 461, 306 S.E.2d at 723.
Because AGLC has fully performed its obligations under the PRP settlement
agreement to this point, because the Order would require AGLC to continue to
perform its obligations and because AGLC&#8217;s rights under the agreement have
vested, the Georgia Constitution prohibits the Commission from contravening
those rights.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">8.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By
unilaterally amending the PRP settlement agreement, the Commission has breached
the agreement. This decision to breach the settlement agreement is against
public policy, contrary to law and erroneous. In </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>United
States v, Winstar Corp.</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 518
U.S. 839, 895 (1986), the Supreme Court opined that when the government enters
into contract relations, its rights and duties therein are governed by contract
law. AGLC has fulfilled its obligations to replace pipe pursuant to the
settlement. The Commission Staff, as agent for the Commission that it works for,
is a party to the negotiated agreement. The Adversary Staff breached the
agreement by proposing, and the Commission breached the agreement by ordering,
the unilateral amendment of the settlement agreement over AGLC&#8217;s
objection.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">9.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Further,
the Order is unfair, arbitrary and capricious in that the Commission disapproved
AGLC&#8217;s proposal to extend the PRP to fifteen years on the basis that Adversary
Staff had not agreed to the proposal but then unilaterally amended the PRP
agreement over AGLC&#8217;s objection.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>OTHER
ERRONEOUS ASPECTS OF THE CRP</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">10.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission must set utility rates based on the utility&#8217;s cost of serving its
customers. </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>See
</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BACKGROUND-COLOR: #ffffff"><EM>Atlanta
Gas Light Co. v. Georgia Public Serv. Comm&#8217;n, </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif; BACKGROUND-COLOR: #ffffff">152
Ga.App. 366, 262 S.E.2d 628</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
(</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif; BACKGROUND-COLOR: #ffffff">Ga.App.,
1979) (rates set</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BACKGROUND-COLOR: #ffffff">
in accord with substantive due process are rates sufficient to require the total
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">revenue
requirement</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BACKGROUND-COLOR: #ffffff">
of a regulated utility, which &#8220;is the sum total of its proper operating
expenses, depreciation expense, taxes, and a reasonable return on the net
valuation of its property")</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif; BACKGROUND-COLOR: #ffffff">.
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BACKGROUND-COLOR: #ffffff"><EM>Accord,</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BACKGROUND-COLOR: #ffffff">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; BACKGROUND-COLOR: #ffffff"><EM>Georgia
Power Co. v. Georgia Public Serv. Comm&#8217;n, </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif; BACKGROUND-COLOR: #ffffff">231
Ga. 339, 201 S.E.2d 423</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
(</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 7pt; FONT-FAMILY: Arial, sans-serif; BACKGROUND-COLOR: #ffffff">Ga.
1973). </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In the
Order, the Commission reduced AGLC&#8217;s revenue requirement to $400,896,000
(Findings of Fact &#182;&nbsp;2). However, the Commission did not set rates to
recover this amount. Instead, the Commission reduced AGLC&#8217;s revenue requirement
but set rates to recover $422,818,000 in order to accomplish other Commission
objectives that are unrelated to base rates. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">11.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">One
objective is to build up a reserve to offset future PRP costs. The United States
Supreme Court, however, reversed a similar plan imposed by the New Jersey Board
of Public Utility Commissioners in </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Bd.
of Public Utility Com&#8217;rs v. New York Telephone Co., </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">271 U.S.
23 (1926). The New Jersey commission had rejected a rate increase the utility
had proposed, froze rates at then current levels and ordered that a depreciation
credit balance be used to offset any underearnings during the coming period.
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Id.
</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">at 26-29.
The U.S. Supreme Court found this to be unlawful and agreed with the utility
that the utility &#8220;could not be compelled to make up deficits in future net
earnings out of the depreciation reserves accumulated in the past.&#8221; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Id.
</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">at 28. As
the Supreme Court determined:</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 72pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
revenue paid by the customers for service belongs to the company. The amount, if
any, remaining after paying taxes and operating expenses including the expenses
of depreciation is the company&#8217;s compensation for the use of its property. . . .
[T]he law does not require the company to give up for the benefit of future
subscribers any part of its accumulations from past operations. Profits of the
past cannot be used to sustain confiscatory rates for the future.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Id.
</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">at 31-32
(citations omitted). Similarly, the Commission would create a reserve account by
decreasing the Company&#8217;s revenue requirements and use this reserve account to
fund future PRP underearnings. According to the U.S. Supreme Court, the CRP is
unlawful and exceeds the Commission&#8217;s authority.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">12.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Order
is also erroneous, arbitrary and capricious because the CRP is poorly defined
and unworkable. Although the Order in not clear, it seems to indicate that the
CRP is set to last for three years. However, AGLC&#8217;s revenue requirement will
increase during that period. Indeed, if the Order is not reconsidered, AGLC
intends to file a new rate case on or about July&nbsp;1, 2005, and shall
evidence that its revenue requirements will have increased during the future
test year applicable to that filing. AGLC will also have to file more than once
a year for additional rate increases, as is its legal right, so as to keep its
shareholders from suffering financial losses during the upcoming period of
increasing costs. As demonstrated in this proceeding, the CRP does not work if
AGLC&#8217;s base revenue requirement increases. Therefore, the CRP, by Adversary
Staff&#8217;s own admission, will not work. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">13.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The CRP
is also unworkable because it would require a monthly and administrative
five-step process to adjust revenues and regulatory liability. This would add
another layer of both financial and regulatory reporting causing AGLC to incur
additional costs that are not currently included in AGLC&#8217;s cost of service.
Further, the amount applied to the regulatory liability could vary each month,
based on customer growth or decline, DDDC, trueup and other factors. It also is
not clear whether franchise fee and damage billing revenue would be treated as
base revenue under the CRP. If so, a variability in these revenue items would
make the CRP further unworkable. Honoring the settlement agreement recovery
mechanism and directing the Staff and the Company to meet in good faith to see
if agreement can be reached on extending the PRP to fifteen years as proposed by
AGLC, is better public policy and a more equitable means of evening out costs
than the Adversary Staff&#8217;s unworkable CRP.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>AFFILIATE
AUDIT</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Company appreciates the efforts of the Commission&#8217;s Staff to assist the
Commission, regulated utilities and energy consumers of Georgia. However, the
Company also believes that this case demonstrates that the Commission should
change how its Staff is used in contested proceedings. An impartial tribunal is,
of course, a cornerstone of due process. </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>See
e.g., </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Stivers
v. Pierce</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 71 F.3d
732, 741 (9th Cir. 1995) (due process demands the right to a "fair hearing
before an impartial tribunal").</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> Thus,
each party has a right to have its case heard by an unbiased Commission with no
one party receiving partial treatment in the proceeding. It cannot be disputed
that Advisory Staff plays a key role in contested rate proceedings. In this
case, the Commission used the Advisory Staff recommendations as a starting point
in its decision process and largely adopted the Advisory Staff&#8217;s
recommendations. The Company never had the opportunity to review or respond to
the Advisory Staff&#8217;s recommendations. The Company is concerned that the way the
Staff is used on rate cases may result in a process that is structurally biased.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">15.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Under the
current organizational structure, there is one Commission Staff with Staff
employees assigned to act either as Adversary or Advisory Staff on a case by
case, ad hoc basis. Presumably, a Staff member serving as Advisory Staff in an
individual case may have his or her overall job performance evaluated by Staff
members serving as Adversary Staff. This organizational structure understandably
could create an inherent potential for bias. In this rate proceeding, AGLC
understands that Staff members that made recommended findings on the Affiliate
Audit acted as Advisory Staff. Advisory Staff then advised the Commission on
whether the Commission should adopt the audit findings proposed by those same
Staff members. This is an additional structural bias. AGLC is concerned that
these structural flaws in the Commission&#8217;s process create an uneven playing
field, and ultimately create a procedural due process error. As an example, in
the list of items Advisory Staff recommended to the Commission in the
spreadsheet (and that the Commission largely adopted), Advisory Staff adopted
76% (19 of 25) of Adversary Staff&#8217;s positions and only 24% (6 or 25) of AGLC&#8217;s
positions. As discussed further herein, many of those Adversary Staff positions
adopted by Advisory Staff involve one-sided adjustments. The adjustments that
would reduce AGLC&#8217;s revenue requirements were adopted and recommended by
Advisory Staff and similar adjustments that would increase AGLC&#8217;s revenue
requirements were rejected or not considered. Viewing these results in total
casts serious doubt on the independence and impartiality of the Advisory Staff
structure at the Commission. Significantly, in this case and a number of other
cases, the Advisory Staff recommendations were a starting point for the
Commission&#8217;s decision, and the Commission ultimately adopted most of Advisory
Staff&#8217;s recommendations without explanation. This demonstrates the importance of
Advisory Staff&#8217;s recommendation to the Commission. However, the current
organizational structure for rate proceedings is failing to produce an
independent, impartial and balanced recommendation, which the Commission needs
to make sound policy decisions. This inherent bias constitutes a procedural due
process error. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>COST
OF CAPITAL</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Return
on Equity</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">16.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission erred by setting a return on equity of 10.375 percent that is
significantly lower than any other ROE that the Commission has set in recent
years for any other utility. The extremely low rate of return adopted in the
Order violates the standards set forth by the U.S. Supreme Court in </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Bluefield
Water Works &amp; Improvement Co. v. Public Service Comm'n of West
Virginia</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 262
U.S. 679 at 692-93, 43 S.Ct. 675 (1923) and </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>FPC
v. Hope Natural Gas Co.</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 320
U.S. 591 at 605, 64 S.Ct. 281 (1944) in that it fails to provide AGLC a just and
reasonable return which will enable it &#8220;to operate successfully, to maintain its
financial integrity, to attract capital, and to compensate investors for the
risk assumed.&#8221; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Federal
Power Commission v. Hope Natural Gas Co.,</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> at 605.
Notably, the Commission recently allowed Georgia Power Company to earn up to an
ROE of 12.25 percent. This return is nearly 20 percent higher than the 10.375
percent the Commission ordered for AGLC. As Dr. Morin demonstrated, the 10.375%
return is also significantly lower than the 11% average allowed ROE for
Adversary Staff witness Hill&#8217;s Group of Gas Utilities. AGLC Exh. No. 69. Such a
low ROE harms both AGLC and AGL Resources Inc. (&#8220;AGLR&#8221;) as is evidenced by
AGLR&#8217;s stock downgrade and comments from rating agencies of a potentially
negative impact on bond ratings following the Order. The Commission has not
adequately explained why AGLC is due such disparate treatment. In fact,
Adversary Staff argued during the proceeding that ROE should be lower if a PBR
is adopted, but the Commission has ordered an extremely low ROE while not
adopting a PBR. Such a low ROE might possibly provide short-term benefits for
customers but at a long-term detriment to those same customers as AGLC&#8217;s ability
to obtain low cost financing will be damaged and AGLR&#8217;s ability to reduce costs
for customers through further acquisitions will be harmed.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>COST
OF CAPITAL</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Debt
Cost</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">17.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It is
arbitrary, capricious and otherwise unlawful for the Commission to update one
cost item and not others. The Commission adopted without explanation Adversary
Staff&#8217;s long-term debt cost of 6.64%. The difference between this figure and
AGLC&#8217;s filed long-term debt and preferred equity cost of 7.14%</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>1</SUP></FONT><FONT
style="DISPLAY: inline">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> is that
Adversary Staff presented updated long-term debt information concerning actual
debt issued by AGL Capital Corporation through December 2004. However, in Docket
No. 4011-U (Jan. 3, 1993 Order), when the Company tried to update its testimony
with more recent figures, the Commission determined that the Company could not
do so in that or any future rate proceeding. Therefore, the Order is contrary to
the Commission&#8217;s own order prohibiting AGLC from updating its filed testimony.
Further, by allowing one party to provide updated cost figures while denying the
utility that same ability is an unfair and unlawful procedure. In this case,
Adversary Staff updated long-term debt cost but not short-term debt cost. The
Commission is well aware that short-term interest rates have marched steadily
upward since AGLC filed its case in October 2004. Obviously, if the Commission
updates long-term rates with the most recently available data in the test year,
the Commission should have updated short-term rates with the most recently
available data. The most recently available data presented in the case shows
AGLC&#8217;s short-term rates at 3.39%, not the 2.96% adopted by the
Commission.</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>2</SUP></FONT><FONT
style="DISPLAY: inline">&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>COST
OF SERVICE AND RATE BASE ISSUES</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Removing
Synergies of Acquisitions</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">18.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission did not address in its Order its treatment of VNG cost savings and
the NUI acquisition. The references are line items in the spreadsheet that was
attached to the Order. According to Sch. 5 of that spreadsheet, the Commission
decreased AGLC&#8217;s operations and maintenance expense by $5.672 million with
respect to VNG acquisition cost allocation savings and $7.644 million with
respect to NUI cost allocation savings. Since there is no explanation for these
adjustments, AGLC can only surmise as to the rationale. In any event, it
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">is poor
public policy to capture all of the cost-savings achieved from AGLR&#8217;s
acquisition of other utilities in that this action may provide ratepayers with
short-term benefits but does so to the long-term detriment of ratepayers and the
Company. Instead of punishing the Company for cost-saving measures such as
AGLR&#8217;s prudent acquisitions, the Commission should further encourage cost-saving
acquisitions that can provide real benefits to Georgia customers.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
mentioned above, the Commission determined that the NUI acquisition will result
in test year savings to AGLC of $7.644 million. However, these
unsubstantiat</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">ed NUI
cost savings are not known and measurable savings and furthermore, AGLR incurred
additional NUI acquisition costs that are not included in the unsubstantiated
cost savings figure relied on by Adversary Staff. Further, it is unfair,
one-sided, arbitrary and capricious for the Commission to disallow the property
tax expense increase (see below) as being not known and measurable, but include
NUI &#8220;savings&#8221; as known and measurable. As Mr. O&#8217;Brien testified, it is simply
too soon to measure all of the costs and savings associated with the NUI
acquisition. Tr. 596-98.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Caroline
Street</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>20.</STRONG></FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission&#8217;s Order deviates from long-standing, below-the-line accounting
treatment of gains and losses on the sale of land (non-depreciable assets).
Capturing gain on the sale of real estate for which the value of the buildings
and fixtures is negative is contrary to the accounting rules that AGLC must
follow and related precedent. Commission Rule 515-3-1-.10 (AGLC Exh. No. 53)
requires the Company to maintain its records in conformity with the FERC system
of accounts. Under the FERC system of gas accounts, 18 CFR Part 201, the cost of
land for general plant must be recorded in Account No. 389 Land and Land Rights.
Gains on the disposition of property in this account are then recorded in
Account No. 421.1 Gain on Disposition of Property. As FERC recognized in
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Florida
Gas Transmission Company, </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">20 FERC P
61,298 (1982), the result of recording the gain in Account No. 421.1 &#8220;is to take
account for regulatory purposes of the gain on the sale of the existing
facilities by reflecting it in a below-the-line account for the benefit of
investors.&#8221; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>See
also, Bd. of Public Utility Com&#8217;rs, </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">271 U.S.
at 32 (customers pay for utility service but property belongs to shareholders);
</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>see
also, Philadephia Suburban Water Co. v. Pa. Public Utility Comm&#8217;n,
</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">427 A.2d
1244 (Pa. Comm. Ct. 1981) (reversing commission decision that attempted to
capture the gain from the sale of realty and pass the gain to ratepayers via a
ten-year amortization); </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Boise
Water Corp. v. Idaho Pub. Utililities Comm&#8217;n, </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">578 P.2d
1089 (Id. 1978) (&#8220;[N]ot having paid the cost of purchasing nondepreciable
property, ratepayers are not entitled to reap the rewards or losses on its sale
or other transfer.&#8221;). FERC further determined in </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Florida
Gas Transmission Company, </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25 FERC
&#182;&nbsp;61005 (1983), &#8220;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the
accounting regulations have been interpreted to bind the Commission
notwithstanding the Commission's judgment concerning the proper ratemaking and
certificate policies which should be followed,&#8221; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>citing</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Panhandle
Eastern Pipe Line Co. v. F.E.R.C.</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 613
F.2d 1120 (D.C. Cir. 1979)</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">. The
Commission likewise must follow its own rule, which requires an accounting
treatment consistent with FERC accounting rules. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Significantly,
in a settlement in Docket No. 4167-U regarding environmental response costs, the
Staff requested a provision that provides for a sharing with ratepayers of any
gain on the sale of property that is remediated under the environmental response
recovery mechanism. No such provision would have been necessary if the Staff
genuinely believed that such a gain was an &#8220;above-the-line&#8221; transaction and
therefore automatically captured for the benefit of ratepayers. Rather, the
negotiated provision requested by Staff was necessary because the proper and
traditional treatment for gains on non-depreciable property is &#8220;below-the-line.&#8221;
Therefore, the gain on the Caroline Street sale appropriately was captured
below-the-line. Moreover, this treatment is proper whereas here ratepayers were
never required to pay for a return of AGLC&#8217;s investment through
depreciation.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">21.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Order
exceeds the Commission&#8217;s authority by retroactively capturing gains from a
period prior to the test year. Pursuant to O.C.G.A. &#167; 46-2-25(d), &#8220;[a]ny action
taken by the commission . . . shall be effective from the date such actions are
reduced to writing and are signed . . . . No such action or order of the
commission may be given retroactive effect.&#8221; Thus, any part of a Commission rate
order that would have a retroactive effect is simply beyond the Commission&#8217;s
authority and void. </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Georgia
Pub. Serv. Comm&#8217;n</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>v.
Atlanta Gas Light Co.</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 205 Ga.
863, 888, 55 S.E.2d 618, 633-34 (1949). According to the Georgia Supreme Court:
&#8220;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Even if
the commission, after fixing a rate or charge, subsequently determines that the
rate was unreasonably high, it has no authority in the revision of the rate to
require that refunds or reparations be made of collections under the rate which
had been established.&#8221; </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Id.
</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The sale
of the Caroline Street property occurred in September 2003. By confiscating gain
from a prior rate period and ordering that this gain be distributed over time to
customers in future rates, the Commission in effect is ordering the Company to
refund collections made under prior rates. Even if the Commission decided that
AGLR should not have captured any gain, such event did not occur during a test
year and therefore should not impact present rates. </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>See
also, Bd. of Public Utility Com&#8217;rs, </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">271 U.S.
at 32 (&#8220;[T]he law does not require the company to give up for the benefit of
future subscribers any part of its accumulations from past operations. Profits
of the past cannot be used to sustain confiscatory rates for the
future.&#8221;).</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">22.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission&#8217;s Order was also unlawful because it violated the rule against
single-issue ratemaking. It is a well-established principle that rational
ratemaking must not examine rate factors in isolation but instead must examine a
variety of contemporaneous factors. </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>See
Georgia Power Co. v. Georgia Pub. Serv. Comm&#8217;n</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">, 231 Ga.
339, 341, 201 S.E.2d 423, 425 (1973) (a utility&#8217;s revenue requirement includes
the sum of its &#8220;proper operating expenses, depreciation expense, taxes, and a
reasonable return on the net valuation of its property that is used in the
public service&#8221;). For example, the cost of facility repair that a gas company
bore in 1942, or a rate base consisting only of property the company used for
utility service in 1942, obviously would not be &#8220;proper&#8221; factors for setting
rates to be charged in 2005. Nor would isolating the 1942 cost of facility
repair and considering it along with other 2005 operating expenses be proper,
rational rate-making. Rather, the expenses, net rate base and other cost and
revenue figures used to determine a utility&#8217;s revenue requirement and amount of
rate increase or decrease</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>&nbsp;</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">must be
derived from the same relevant time period. Reaching back and capturing the gain
from the 2003 sale of Caroline Street and including that gain alongside 2005
costs, revenues and expenses violates the rule against single-issue
ratemaking.</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>3</SUP></FONT><FONT
style="DISPLAY: inline">&nbsp;</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP><EM>
</EM></SUP></FONT></DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">23.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission&#8217;s capture of the Caroline Street gain that occurred outside of the
test year while simultaneously disallowing other known and measurable costs such
as pension, health insurance and OPEB costs because these costs occur outside
the test year is arbitrary and capricious. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">24.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Order
also errs by failing to take into account that AGLC already shared a significant
portion of the Caroline Street gain by prepaying pension expense thereby
reducing revenue requirement by $600,000 per year, and by not taking into
account that AGL Services Company (&#8220;AGSC&#8221;) suffered a loss through the sale on
the buildings and other infrastructure that existed at Caroline Street. If the
Commission captures this gain, it must also recognize the loss and decreased
cost of service that occurred as a result of the same transaction. This
one-sided, treatment of counting only items that reduce AGLC&#8217;s revenue
requirement is erroneous, unfair and unlawful.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>AGSC
Plant</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">25.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission adopted, without explanation, Adversary Staff&#8217;s proposal to remove
approximately $45.1 million of plant used to provide AGLC&#8217;s service to customers
but that is shown on AGSC&#8217;s books. Once again, it is impossible for AGLC to
respond adequately to the Commission&#8217;s decision concerning AGSC without knowing
the Commission&#8217;s rationale for adopting Adversary Staff&#8217;s position. Indeed, the
Commission adopted each substantive Adversary Staff recommendation concerning
rate base but the Commission&#8217;s entire &#8220;explanation&#8221; concerning these $100
million in rate base adjustments is: &#8220;The Commission finds as a matter of fact
that the appropriate rate base for the test period is $1,187,677,000.&#8221; Even
Adversary Staff admitted that the AGSC plant is used for AGLC&#8217;s utility service
(Tr. 1052), which of course is the standard for a utility&#8217;s cost recovery for
plant. </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>See
Bd. of Public Utility Com&#8217;rs, </EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">271 U.S.
at 31 (&#8220;Constitutional protection against confiscation does not depend on the
source of the money used to purchase the property. It is enough that it is used
to render the service.&#8221;). Significantly, but for AGSC having the plant, AGLC
would have to acquire its own. Therefore, the Commission erred by excluding the
AGSC plant from rate base.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Rate
Base Pension Adjustments</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">26.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission erred by excluding without explanation full pension liability as a
rate base reduction of $15.211 million (with accompanying impact on expenses as
well). This is an unreasonable, one-sided adjustment in that it fails to
consider the offsetting and large Other Comprehensive Income that created the
pension liability and that will become pension expense in future years. The
Commission&#8217;s treatment is also not consistent with the treatment afforded
Georgia Power in its 2004 rate case and therefore is discriminatory.
</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Depreciation</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">27.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission erred by adopting a methodology that is contrary to the accounting
rules that AGLC must follow and that will force future customers to pay for
present costs. Commission Rule 515-3-1-.10 (AGLC Exh. No. 53) requires the
Company to maintain its records in conformity with the FERC system of accounts.
The FERC system of accounts requires AGLC to record the actual &#8220;book cost of gas
plant retired&#8221; less the net salvage value of the same plant retired. AGLC Exh.
No. 54. Mr. Roff for AGLC followed this method, Mr. King for Adversary Staff did
not. Instead, Mr. King compares actual retirement costs with the book cost of
plant that is </FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>not</U></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"> retired.
Rather than comply with the FERC accounting rules that AGLC must follow, Mr.
King testified that AGLC must align its depreciation accounting to certain
statements by the SEC concerning financial, instead of regulatory, accounting.
With the exception of Pennsylvania and certain rate settlements in Georgia in
which King was the Adversary Staff witness, no other commission has adopted Mr.
King&#8217;s unique method. Mr. King&#8217;s approach may reduce depreciation rates and cost
recovery now but will cause the undercollection of retirement costs and force
future ratepayers to pay for present utility costs, much like Georgia Power
Company&#8217;s customers now face extraordinary rate increases because of past fuel
cost undercollections. The Commission should protect future ratepayers by
adopting Mr. Roff&#8217;s depreciation rates that comply with the Commission&#8217;s and
FERC&#8217;s accounting rules and appropriately assigns present ratepayers their fair
share of the costs. </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Property
Tax Expense</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">28.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission erred because the property tax increase projected by AGLC is known
and measurable. The government agency responsible for tax assessments has
already indicated that it plans to utilize its stock and debt approach to value
AGLC&#8217;s property for the 2005 property tax assessment. Use of this methodology
will increase AGLC&#8217;s property tax by approximately $2.4 million. At a minimum,
the property tax increase is more known than the alleged cost savings AGLR would
achieve this year from the NUI transaction. Thus, AGLR stated that it hopes to
achieve certain cost savings to AGLC associated with the NUI transaction and the
tax commissioner said it plans to increase AGLC&#8217;s taxes. It is one-sided, unfair
and legally infirm for the Commission to conclude that the anticipated cost
savings associated with the NUI transaction are known and measurable while the
tax commissioner&#8217;s plan to increase taxes is not.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Operating
Expense Escalation</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>29.</STRONG></FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission without explanation reduced AGLC&#8217;s proposed Operations &amp;
Maintenance (&#8220;O&amp;M&#8221;) expense increase projection by $1.83 million. It is
unreasonable (and punitive) for the Commission to determine that O&amp;M expense
shall not increase by the Consumer Price Index (&#8220;CPI&#8221;) amount when certain costs
are beyond AGLC&#8217;s control and clearly rising. Additionally, it is unreasonable
and unfair to expect further cost reductions for AGLC due to future investment
in technology when AGLC has already incorporated cost savings in its test period
payroll costs. It is payroll costs that are primarily impacted by investment in
technology, and AGLC reflected a decrease in its payroll costs. The O&amp;M
expense adjusted for the CPI will be impacted minimally, if at all, by future
investments in technology. AGLC has not increased rates since 1993 during which
time the CPI has increased over 30 percent. However, AGLC has already cut
substantial costs and the additional substantial revenue cut the Commission has
ordered could reduce AGLC&#8217;s ability to provide the current level of utility
service. Notably, the Commission is removing the incentive for AGLR to engage in
further cost-cutting acquisitions (see above) yet holds O&amp;M expense at the
current level, thereby assuming that AGLR will continue to make these
cost-saving acquisitions. This is neither good public policy nor consistent with
the law.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Adjustments
to 3-Year Expense Projections</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>30.</STRONG></FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It is
unreasonable, arbitrary and capricious for the Commission to ignore strong
evidence of cost increases that are not in the Company&#8217;s control. The
Commission&#8217;s decision is arbitrary and capricious for not considering the known
and measurable pension expense, OPEB expense and group health insurance
increases that will occur. The Commission also did not adjust for known
increases in pension and OPEB expense for the test period based on updated
actuarially determined estimates. This refusal to update pension, OPEB and
health insurance expense while updating long-term debt is clearly erroneous and
one-sided decision-making.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>Composite
Ratio</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>31.</STRONG></FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission accepted Adversary Staff&#8217;s position to adjust downward allocations by
$2.955 million by incorporating the Q4 2004 composite ratio. Updating the
composite ratio figures the Company filed in October 2004 to November&nbsp;30,
2004, but not adjusting other items, is another example of one-sided treatment
that is contrary to law and prior Commission decisions. Further, only $1.24
million of Adversary Staff&#8217;s proposed adjustment was related to updating the
composite ratio to Q4 2004. The remaining amount was related to Adversary
Staff&#8217;s position to include AGLR in the composite ratio for the allocations of
information system and technologies, facilities and certain other service
providers. This inclusion would not be consistent with the method approved for
AGSC by the Securities and Exchange (&#8220;SEC&#8221;) Public Utilities Holding Company Act
of 1935 (&#8220;PUHCA&#8221;) Staff. Once again, this treatment is one-sided and arbitrary
in that the Commission adopted Adversary Staff&#8217;s depreciation position that was
based on Mr.&nbsp;King&#8217;s statement that his methodology was consistent with the
method advocated by the SEC but also adopted a composite ratio inclusion that is
inconsistent with that approved for AGSC by the SEC PUHCA staff.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>COST
OF SERVICE STUDY</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">32.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
six-month pre-filing requirement is an unlawful restriction on AGLC&#8217;s ability to
request a rate increase at any time. Pursuant to O.C.G.A. &#167;&nbsp;46-2-25(a), a
utility has a right to file for a rate increase at any time upon providing &#8220;30
days&#8217; notice to the commission and to the public . . . by filing &#8230; new
schedules&#8230;.&#8221; Under this statute, the Commission can then suspend the
implementation of these rates for up to five more months (i.e., a total of six
months from the utility&#8217;s filing.) The Commission&#8217;s new requirement would turn
the statute&#8217;s one-month notice into a seven-month notice and the period from the
time the utility decides to file for a rate increase until the rates go into
effect would turn from six months to well over a year, and more likely up to 1&#189;
years (to complete and file the study, wait 6 months to file the new schedules
and then wait 6 more months). This requirement exceeds the Commission&#8217;s
statutory authority.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">33.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission&#8217;s new Cost of Service Study requirement can not likely be implemented
for other practical reasons in that they are vague and overreaching. According
to the Order (p.14), AGLC must provide &#8220;comprehensive and complete&#8221; work papers
that &#8220;fully&#8221; disclose how the economic costs were developed including
documentation of &#8220;all judgments and methods&#8221; used to establish &#8220;every specific
assumption.&#8221; AGLC respectfully suggests that this standard is vague, unworkable
and could require voluminous documentation of, among other things, all judgments
made. The Order further requires that the work papers &#8220;must be so comprehensive
as to allow others initially unfamiliar with the study to replicate&#8221; the study.
This requirement is vague and unworkable in that it rests in part on the level
of understanding of the person receiving the work papers on behalf of Staff or
some other party.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>RATE
DESIGN</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">34.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission determined that </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 72pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">the rate
design recommendations of the Commission Adversary Staff are just and
reasonable. Specifically, the Commission rejects the Company&#8217;s proposal to
sculpt the DDDC for the G-11 class&#8230;. The Commission maintains the current G-11
threshold to remain in place for the assessment of the customer
charge.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Findings
of Fact &#182;&nbsp;17. This is the entire &#8220;explanation&#8221; for the Commission&#8217;s
decision to reject all of the proposals that AGLC presented that are designed to
decrease the number of commercial customers that currently are leaving the
Company&#8217;s system. There is no evidence to support the Commission&#8217;s determination
that the G-11 threshold should remain the same, as even the CUC witness agreed
to some change in the threshold and the record shows that AGLC needs to change
the threshold to retain commercial customers.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">35.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission also erred by adopting without comment Adversary Staff&#8217;s request to
reject &#8220;the Company&#8217;s proposal to recover the PRP cost through the DDDC charge&#8221;
(</FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><EM>Id.)
</EM></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">even
though Adversary Staff&#8217;s own expert witness called the current PRP cost recovery
method &#8220;regressive.&#8221; </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25"><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">36.</FONT><FONT
id=TAB2 style="COLOR: black; LETTER-SPACING: 9pt">&nbsp;&nbsp;</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Commission likewise erred by failing to adopt the E-1 Rate and Economic
Development Fund (without explanation) that will help provide jobs and
infrastructure to rural Georgia. The E-1 Rate will not result in any rate
increase to customers but the Commission rejected it nonetheless.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV><BR>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV style="WIDTH: 100%" align=left>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT>&nbsp;</DIV></DIV>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV><BR>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>III.
Conclusion</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">WHEREFORE,
AGLC respectfully requests the Commission to rehear and reconsider its Order and
schedule oral argument.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 18pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This 9th
day of May, 2005.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Respectfully
submitted,</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>/s/ L.
Craig Dowdy</U></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">L. Craig
Dowdy</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>/s/
Alan R. Jenkins</U></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Alan R.
Jenkins</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attorneys
for</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta
Gas Light Company</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">McKenna
Long &amp; Aldridge LLP</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">303
Peachtree Street</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
5300</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
GA 30308</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">404-527-4000</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><BR></DIV>
<DIV><BR>
<HR>

<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial"><SUP>1</SUP>
<EM>Adversary Staff collapsed preferred stock into long-term debt. AGLC filed
preferred equity cost as 8.57% and long-term debt cost as 6.68%. If rolled
together, AGLC&#8217;s filed long-term and preferred equity cost is
7.14%.</EM></FONT></DIV></DIV>
<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman, serif"><SUP>2</SUP></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
<EM><FONT style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial">This
unfair treatment is also a due process violation.</FONT></EM></FONT></DIV></DIV>
<DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Arial"><SUP>3 <EM>See
Business and Professional People for the Pub. Interest v. Illinois Commerce
Comm&#8217;n</EM><SUP>, 585 N.E.2d 1032, 1061-62 (Ill. 1991):</SUP>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt"
align=justify><SUP>The rule against single-issue ratemaking recognizes that the
revenue formula is designed to determine the revenue requirement based on the
aggregate costs and demand of the utility. Therefore, it would be improper to
consider changes to components of the revenue requirement in isolation. Often
times a change in one item of the revenue formula is offset by a corresponding
change in another component of the formula.</SUP></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><SUP><EM>See also National Fuel Gas Distrib. Corp. v. Pennsylvania
Pub. Utility Comm&#8217;n</EM></SUP><SUP>, 464 A.2d 546, 567 (Pa. Cmwlth. 1983) (&#8220;the
consideration of expense and revenue items in isolation . . . could result in
the setting of confiscatory rates&#8221;); </SUP><SUP><EM>A. Finkl &amp; Sons Co. v.
Illinois Commerce Comm&#8217;n</EM></SUP><SUP>, 620 N.E.2d 1141, 1147 (Ill. App.
1993):</SUP></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -27pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><SUP><FONT id=TAB2
style="LETTER-SPACING: 9pt">&nbsp;&nbsp;&nbsp;</FONT>&nbsp;[I]nstead of
considering costs and earnings in the aggregate, where potential changes in one
or more items of expense or revenue may be offset by increases or decreases in
other such items, single-issue ratemaking considers those changes in isolation,
ignoring the totality of
circumstances.</SUP></DIV></SUP></FONT></DIV></DIV></DIV><BR>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV style="WIDTH: 100%" align=left>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV></DIV>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
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style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%" align=left></DIV></DIV></DIV><BR><BR>
<DIV
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align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG><U>CERTIFICATE
OF SERVICE</U></STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 18pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I, Alan
R. Jenkins, an attorney for Atlanta Gas Light Company, hereby certify that I
have served Atlanta Gas Light Company&#8217;s Petition for Rehearing, Reconsideration
and Oral Argument upon the following parties in Docket No. 18638-U by depositing
a copy of same in the United States mail with sufficient postage, addressed as
follows: </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
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style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV></DIV><BR>
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align=left><BR></DIV></DIV>
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style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
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style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
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</DIV></DIV>
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style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%" align=left></DIV></DIV></DIV><BR><BR>
<DIV
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align=left><BR></DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Phil
      Smith</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Staff
      Attorney</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Georgia
      Public Service Commission</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">244
      Washington Street, S.W.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30334</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Jeffrey
      C. Stair</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Georgia
      Public Service Commission</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">244
      Washington Street</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30334</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Reece
      McAlister</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
      Secretary</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Georgia
      Public Service Commission</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">244
      Washington Street, SW</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30334</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tressa
      deAndrade, Esq.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Georgia
      Public Service Commission</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">244
      Washington Street</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30334</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Clare
      McGuire</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consumers&#8217;
      Utility Counsel</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Governor&#8217;s
      Office of Consumer Affairs</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2
      Martin Luther King, Jr. Dr.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
      356, East Tower</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30334</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Dan
      Walsh</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Assistant
      Attorney General</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">State
      of Georgia, Department of Law</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">40
      Capitol Square, S.W.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30334</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Terri
      M. Lyndall </FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Galloway
      &amp; Lyndall, LLP</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Six
      Piedmont Center, Suite 303</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">3525
      Piedmont Road</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30305</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Charles
      B. Jones, III</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Sutherland,
      Asbill &amp; Brennan, LLP</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">999
      Peachtree Street, N.E.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
      2300</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30309-3996</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
      D&#8217;Angelo</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infinite
      Energy/Intelligent Energy</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2050
      Center Avenue, Suite 500</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Fort
      Lee, NJ 07024</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Eric
      M. Whitmore</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Regulatory
      Affairs Manager</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Infinite
      Energy, Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1355
      Terrell Mill Road</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Building
      1484</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Marietta,
      GA 30067</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Joseph
      C. Monroe</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SouthStar
      Energy Services, LLC</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">817
      West Peachtree Street, N.W.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
      1000</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30308</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Robert
      B. Remar, Esq.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Rogers
      &amp; Hardin, LLP</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2700
      International Tower</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Peachtree
      Center </FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">229
      Peachtree Street, N.E.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30303</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Jim
      Clarkson</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Resource
      Supply Management</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">998
      Veterans Memorial Highway</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mableton,
      GA 30126</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Kevin
      C. Greene</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Melissa
      L. Pignatelli</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Troutman
      Sanders LLP</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">600
      Peachtree Street, N.E.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
      5200 Bank of America Plaza</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30308-2216</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Jocelyn
      M. Stargel</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Southern
      Company Gas LLC</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">14</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>th</SUP></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Floor</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">270
      Peachtree Street</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30303</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Jeannette
      Mellinger</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Consumers&#8217;
      Utility Counsel Division</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">47
      Trinity Avenue</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30334</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Livia
      Whisenhunt</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">CEO</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">PS
      Energy Group, Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2987
      Clairmont Road, Suite 450</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30329</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Lynn
      R. Westergaard, President</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Resource
      Service Ministries, Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">1841
      Marietta Blvd., N.W.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Suite
      G</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30318-2849</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Gary
      Bunce</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Walton
      EMC Natural Gas</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">P.O.
      Box 260</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">842
      US Hwy. 78, NW</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Monroe,
      GA 30655</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Peyton
      S. Hawes, Jr.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2467
      Montview Drive, N.W.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30305</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">G.L.
      Bowen, III, President</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">GTMA</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">50
      Hurt Plaza, Suite 985</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30303</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Steve
      Ruback</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
      Columbia Group, Inc.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">785
      Washington Street</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Canton,
      MA 02021</FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Randall
      D. Quintrell</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">999
      Peachtree Street, N.E.</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">19</FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><SUP>th</SUP></FONT><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
      Floor, First Union Building</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30309</FONT></DIV></TD>
    <TD vAlign=top align=left width="32%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">J.
      Renee Kastanakis</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">4645
      Club Circle</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 9pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Atlanta,
      GA 30319</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This 9th
day of May, 2005.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>/s/
Alan R. Jenkins</U></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><FONT id=TAB1 style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT id=TAB1
style="MARGIN-LEFT: 36pt"></FONT><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Alan R.
Jenkins </FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV><BR>
<DIV id=PGBRK style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=FTR>
<DIV id=GLFTR style="WIDTH: 100%" align=left><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV>
<DIV id=PN style="PAGE-BREAK-AFTER: always">
<DIV style="WIDTH: 100%; TEXT-ALIGN: center"><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt" face="Times New Roman"></FONT></DIV>
<DIV style="WIDTH: 100%; TEXT-ALIGN: center">
<HR color=#000000 noShade SIZE=2>
</DIV></DIV>
<DIV id=HDR>
<DIV id=GLHDR style="WIDTH: 100%" align=right><FONT
style="DISPLAY: inline; FONT-SIZE: 8pt; COLOR: #000000; FONT-FAMILY: Times New Roman"></FONT></DIV></DIV></DIV><BR>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=center><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>SIGNATURE</STRONG></FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><FONT
style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.</FONT></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify><BR></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=justify>&nbsp;</DIV>
<DIV>
<TABLE cellSpacing=0 cellPadding=0 width="100%">
  <TR>
    <TD vAlign=top align=left width="35%">&nbsp;</TD>
    <TD vAlign=top align=left width="48%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><STRONG>AGL
      RESOURCES INC.</STRONG></FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">&nbsp;</TD>
    <TD vAlign=top align=left width="48%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant)</FONT></DIV>
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left>&nbsp;</DIV></TD></TR>
  <TR>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left width="35%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Date:
      May 9, 2005</FONT></DIV></TD>
    <TD style="BORDER-BOTTOM: medium none" vAlign=top align=left width="48%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><U>/s/
      Richard T. O&#8217;Brien</U></FONT></DIV></TD></TR>
  <TR>
    <TD vAlign=top align=left width="35%">&nbsp;</TD>
    <TD vAlign=top align=left width="48%">
      <DIV
      style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
      align=left><FONT
      style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Executive
      Vice President and Chief Financial Officer</FONT></DIV></TD></TR></TABLE></DIV>
<DIV
style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"
align=left><BR></DIV>
<DIV></DIV></DIV></BODY></HTML>
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{"company-data": {"conformed-name": "AGL RESOURCES INC", "cik": "0001004155", "assigned-sic": "4924", "irs-number": "582210952", "state-of-incorporation": "GA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-14174", "film-number": "05812264"}, "business-address": {"street1": "TEN PEACHTREE PLACE", "city": "ATLANTA", "state": "GA", "zip": "30309", "phone": "4045844000"}, "mail-address": {"street1": "TEN PEACHTREE PLACE", "street2": "DEPT. 1200", "city": "ATLANTA", "state": "GA", "zip": "30309"}}
Form 8-K
UNITED
      STATES
SECURITIES
      AND EXCHANGE COMMISSION
Washington,
      D.C. 20549
FORM
      8-K
CURRENT
      REPORT
PURSUANT
      TO SECTION 13 OR 15(d)
OF
THE
      SECURITIES EXCHANGE ACT OF 1934
Date
      of Report (Date of earliest event reported): May 9,
2005
AGL
      RESOURCES INC.
(Exact
      name of registrant as specified in its charter)
Georgia
1-14174
58-2210952
(State
      or other jurisdiction of incorporation)
(Commission
      File No.)
(I.R.S.
      Employer Identification No.)
Ten
      Peachtree Place NE Atlanta, Georgia 30309
(Address
      and zip code of principal executive offices)
404-584-4000
(Registrant's
      telephone number, including area code)
Not
      Applicable
(Former
      name or former address, if changed since last report)
Check
      the appropriate box below if the Form 8-K filing is intended to
      simultaneously satisfy the filing obligation of the registrant under any
      of the following provisions:
[ ]
      Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)
[ ]
      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
[ ]
      Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))
[ ]
      Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))
2
Item
7.01 Regulation FD Disclosure
Included
is the Petition of Atlanta Gas Light Company for Rehearing, Reconsideration and
Oral Argument in the Atlanta Gas Light rate case (Georgia Public Service
Commission Docket No. 18638-U).  The petition was filed on May 9, 2005, by
Atlanta Gas Light, a wholly owned subsidiary of AGL Resources Inc., with the
Georgia Public Service Commission, in order to request that the Commission
rehear and reconsider its April 29, 2005 Order in the above-noted rate
case.
STATE
OF GEORGIA
BEFORE
THE GEORGIA PUBLIC SERVICE COMMISSION
In
Re: Atlanta Gas Light Company's
)
2004-2005
Rate Case
)
Docket
No. 18638-U
)
Petition
of Atlanta Gas Light Company
For
Rehearing, Reconsideration and Oral Argument
Pursuant
to Georgia Public Service Commission ("Commission") Rule 515-2-1-.08, Atlanta
Gas Light Company ("AGLC" or the "Company") hereby respectfully requests that
the Commission rehear and reconsider its April 29, 2005 Order ("Order") in the
above-captioned proceeding and schedule oral argument, and as grounds therefor
shows the following:
1.
This
petition is filed within ten days from the entry of the Order.
2.
On May
25, 2004, the Commission ordered the Company to file a general rate case so as
to determine six issues, including whether the three-year Performance Based Rate
Plan ("PBR") that would end on April 30, 2005 should be discontinued, extended
or otherwise modified. AGLC complied with that order by filing direct testimony
and exhibits, including a cost of service study consistent with the Commission's
Minimum Filing Requirements ("MFRs"). The Order contains the Commission's
ruling, findings and conclusions with respect to AGLC's filing.
3.
As more
particularly set forth below, the Order contains errors of law and fact that
should be corrected.
LACK
OF EXPLANATION
4.
The
Commission, as with any agency or court, must engage in reasoned decision-making
fully explaining the bases for its orders and conclusions. Thus, to determine
whether an agency has acted in an arbitrary and capricious fashion, a court
inquires whether the agency has "examine[d] the relevant data and articulate[d]
a satisfactory explanation for its action including a rational connection
between the facts found and the choice made."
Motor
Vehicle Mfrs. Ass'n v. State Farm Mut. Ins. Co.,
463
U.S. 29, 42, 103 S.Ct. 2856, 286
(1983).
Generally, a court will deem arbitrary and capricious an agency's decision where
"[the agency] entirely failed to consider an important aspect of the problem,
offered an explanation for its decision that runs counter to the evidence before
the agency, or is so implausible that it could not be ascribed to a difference
in view or the product of agency expertise."
Id.
at 43.
Thus, the grounds upon which the agency acted must be clearly disclosed and the
agency must make plain its course of inquiry, its analysis and its reasoning in
its decision.
Am.
Petroleum Inst. v. E.P.A.,540 F.2d 1023, 1029
(10
th
Cir.
1976) (construing
Motor
Vehicle Mfrs.
).
See
also Sierra Club v. Leavitt
, 368
F.3d 1300, 1302 (11
th
Cir.
2004) (deference to agency is inappropriate where the agency fails entirely to
address or explain the issue it faced). This law is reflected in O.C.G.A.
§ 50-13-17(b), that requires: "Findings of fact shall be accompanied by a
concise and explicit statement of the underlying facts supporting the findings."
The Order erroneously provides no explanation for its factual findings or legal
conclusions. In fact, the Commission orders $51 million in revenue requirement
reductions from AGLC's case without any explanation. Without knowing the bases
for the Commission's decisions and conclusions, AGLC is unable to respond
adequately in this petition and therefore reserves the right to file a Petition
for Rehearing, Reconsideration and for Oral Argument should the Commission issue
a more detailed order.
PBR
5.
One
example of how the Order is arbitrary and capricious is in not addressing the
issue of the PBR. The first of the six issues that the Commission determined (in
the procedural and scheduling orders) would be resolved in this case was whether
the PBR should be extended. In fact, this is the issue that required AGLC to
file its case in the first place. The Order is completely silent as to any
determination or rationale by the Commission for the PBR being
discontinued.
UNILATERAL
AMENDMENT OF THE PRP SETTLEMENT AGREEMENT
6.
The
Commission erred by adopting a Comprehensive Rate Plan ("CRP") that amends the
Pipe Replacement Program ("PRP") settlement agreement entered into by AGLC and
the Commission Staff in Docket No. 8516-U by freezing the PRP surcharge at the
current PRP rate and supposedly by rolling PRP revenue requirements into base
rates. The PRP settlement (pp.25-26) establishes a specific formula for the PRP
surcharge that AGLC is allowed under the settlement agreement to recover in
return for replacing pipe pursuant to the settlement agreement.
The cost
recovery will be designed to complement and supplement the regulatory process
then in place. This recovery will be through a surcharge to then existing rates.
The Company shall be allowed to include capital cost of all property additions
and improvements minus such amounts already included in the Commission's last
determination of the Company's revenue requirements….The Company will also be
allowed any net current expense not recovered above or in previous revenue
requirement determinations . . . .
Thus, the
PRP settlement agreement provides that there is an amount of capital cost and
expense for pipe replacement in base rates, i.e., in "the Company's revenue
requirements." Indeed, this is how this provision was understood at the time it
was negotiated and has been implemented consistently since that time -- that the
surcharge recovers any PRP costs not included in the Company's revenue
requirement. The CRP does not change the Company's revenue requirement, which
the Commission determined is $400,896,000 (Order Findings of Fact ¶ 2).
Thus, pursuant to the CRP, AGLC would not be able to recover all of its PRP
costs through the surcharge and the base rate pipe replacement portion of its
revenue requirement as agreed in the PRP agreement. Instead, under the adopted
plan, the unmet PRP revenue requirement would be in theory "rolled into base
rates" (Order Findings of Fact ¶ 10) and recovered (if the CRP mechanism
actually works in practice) through an amount above the base rate revenue
requirement. This is a novel idea that constitutes a unilateral amendment or
abrogation of the PRP settlement agreement. Such an amendment to an existing
settlement agreement cannot be adopted without AGLC's consent.
7.
The
unilateral abrogation of the PRP settlement agreement constitutes an impairment
of AGLC's contract with the Commission and its Staff in violation of the
Contract Clause of the United States and Georgia Constitutions. The United
States Constitution, Art. I, § 10, cl. 1, provides, "No State shall . . .
pass any Law impairing the Obligation of Contracts." Similarly, Georgia's
Constitution provides, "No bill of attainder, ex post facto law, retroactive
law, or laws impairing the obligation of contract or making irrevocable grant of
special privileges or immunities shall be passed." Art. I, § 10, ¶ X. These
provisions ensure that a State cannot enter into a binding contract with another
party, obtain a benefit from that contract, and then unilaterally determine that
it will no longer honor its obligations under the contract.
See
United
States v. Winstar Corp.
, 518
U.S. 839, 876 (1996) (noting that the federal Contract Clause protects parties
who enter into contracts with States);
Swann
v. Board of Trustees
, 257 Ga.
450, 454, 360 S.E.2d 395, 398 (1987) (holding that Georgia's Contract Clause
ensures that a subsequent ordinance cannot reduce the benefit to a party who has
performed pursuant to a contract while the ordinance was in effect).
Once a
State forms a contract with a party and the party's rights vest, the Contract
Clauses of the United States and Georgia Constitutions protect the contracting
party from subsequent State action affecting those rights. The Georgia
Constitution flatly prohibits the State from undertaking any action that
interferes with rights that have vested.
See
Swann
, 257 Ga.
at 454, 360 S.E.2d at 398;
Smith
v. City of Atlanta
, 167 Ga.
App. 458, 461, 306 S.E.2d 720, 723-24 (1983);
Spengler
v. Employers Com. Union Ins. Co.
, 131 Ga.
App. 443, 453, 206 S.E.2d 693, 700 (1974). For example, in
Smith
, the
Georgia Court of Appeals held that a municipality could not prevent its employee
from receiving compensation for work he had already performed by invoking a
subsequently enacted statutory immunity. 167 Ga. App. at 461, 306 S.E.2d at 723.
Because AGLC has fully performed its obligations under the PRP settlement
agreement to this point, because the Order would require AGLC to continue to
perform its obligations and because AGLC's rights under the agreement have
vested, the Georgia Constitution prohibits the Commission from contravening
those rights.
8.
By
unilaterally amending the PRP settlement agreement, the Commission has breached
the agreement. This decision to breach the settlement agreement is against
public policy, contrary to law and erroneous. In
United
States v, Winstar Corp.
, 518
U.S. 839, 895 (1986), the Supreme Court opined that when the government enters
into contract relations, its rights and duties therein are governed by contract
law. AGLC has fulfilled its obligations to replace pipe pursuant to the
settlement. The Commission Staff, as agent for the Commission that it works for,
is a party to the negotiated agreement. The Adversary Staff breached the
agreement by proposing, and the Commission breached the agreement by ordering,
the unilateral amendment of the settlement agreement over AGLC's
objection.
9.
Further,
the Order is unfair, arbitrary and capricious in that the Commission disapproved
AGLC's proposal to extend the PRP to fifteen years on the basis that Adversary
Staff had not agreed to the proposal but then unilaterally amended the PRP
agreement over AGLC's objection.
OTHER
ERRONEOUS ASPECTS OF THE CRP
10.
The
Commission must set utility rates based on the utility's cost of serving its
customers.
See
Atlanta
Gas Light Co. v. Georgia Public Serv. Comm'n,
152
Ga.App. 366, 262 S.E.2d 628
(
Ga.App.,
1979) (rates set
in accord with substantive due process are rates sufficient to require the total
revenue
requirement
of a regulated utility, which "is the sum total of its proper operating
expenses, depreciation expense, taxes, and a reasonable return on the net
valuation of its property")
.
Accord,
Georgia
Power Co. v. Georgia Public Serv. Comm'n,
231
Ga. 339, 201 S.E.2d 423
(
Ga.
1973).
In the
Order, the Commission reduced AGLC's revenue requirement to $400,896,000
(Findings of Fact ¶ 2). However, the Commission did not set rates to
recover this amount. Instead, the Commission reduced AGLC's revenue requirement
but set rates to recover $422,818,000 in order to accomplish other Commission
objectives that are unrelated to base rates.
11.
One
objective is to build up a reserve to offset future PRP costs. The United States
Supreme Court, however, reversed a similar plan imposed by the New Jersey Board
of Public Utility Commissioners in
Bd.
of Public Utility Com'rs v. New York Telephone Co.,
271 U.S.
23 (1926). The New Jersey commission had rejected a rate increase the utility
had proposed, froze rates at then current levels and ordered that a depreciation
credit balance be used to offset any underearnings during the coming period.
Id.
at 26-29.
The U.S. Supreme Court found this to be unlawful and agreed with the utility
that the utility "could not be compelled to make up deficits in future net
earnings out of the depreciation reserves accumulated in the past."
Id.
at 28. As
the Supreme Court determined:
The
revenue paid by the customers for service belongs to the company. The amount, if
any, remaining after paying taxes and operating expenses including the expenses
of depreciation is the company's compensation for the use of its property. . . .
[T]he law does not require the company to give up for the benefit of future
subscribers any part of its accumulations from past operations. Profits of the
past cannot be used to sustain confiscatory rates for the future.
Id.
at 31-32
(citations omitted). Similarly, the Commission would create a reserve account by
decreasing the Company's revenue requirements and use this reserve account to
fund future PRP underearnings. According to the U.S. Supreme Court, the CRP is
unlawful and exceeds the Commission's authority.
12.
The Order
is also erroneous, arbitrary and capricious because the CRP is poorly defined
and unworkable. Although the Order in not clear, it seems to indicate that the
CRP is set to last for three years. However, AGLC's revenue requirement will
increase during that period. Indeed, if the Order is not reconsidered, AGLC
intends to file a new rate case on or about July 1, 2005, and shall
evidence that its revenue requirements will have increased during the future
test year applicable to that filing. AGLC will also have to file more than once
a year for additional rate increases, as is its legal right, so as to keep its
shareholders from suffering financial losses during the upcoming period of
increasing costs. As demonstrated in this proceeding, the CRP does not work if
AGLC's base revenue requirement increases. Therefore, the CRP, by Adversary
Staff's own admission, will not work.
13.
The CRP
is also unworkable because it would require a monthly and administrative
five-step process to adjust revenues and regulatory liability. This would add
another layer of both financial and regulatory reporting causing AGLC to incur
additional costs that are not currently included in AGLC's cost of service.
Further, the amount applied to the regulatory liability could vary each month,
based on customer growth or decline, DDDC, trueup and other factors. It also is
not clear whether franchise fee and damage billing revenue would be treated as
base revenue under the CRP. If so, a variability in these revenue items would
make the CRP further unworkable. Honoring the settlement agreement recovery
mechanism and directing the Staff and the Company to meet in good faith to see
if agreement can be reached on extending the PRP to fifteen years as proposed by
AGLC, is better public policy and a more equitable means of evening out costs
than the Adversary Staff's unworkable CRP.
AFFILIATE
AUDIT
14.
The
Company appreciates the efforts of the Commission's Staff to assist the
Commission, regulated utilities and energy consumers of Georgia. However, the
Company also believes that this case demonstrates that the Commission should
change how its Staff is used in contested proceedings. An impartial tribunal is,
of course, a cornerstone of due process.
See
e.g.,
Stivers
v. Pierce
, 71 F.3d
732, 741 (9th Cir. 1995) (due process demands the right to a "fair hearing
before an impartial tribunal").
Thus,
each party has a right to have its case heard by an unbiased Commission with no
one party receiving partial treatment in the proceeding. It cannot be disputed
that Advisory Staff plays a key role in contested rate proceedings. In this
case, the Commission used the Advisory Staff recommendations as a starting point
in its decision process and largely adopted the Advisory Staff's
recommendations. The Company never had the opportunity to review or respond to
the Advisory Staff's recommendations. The Company is concerned that the way the
Staff is used on rate cases may result in a process that is structurally biased.
15.
Under the
current organizational structure, there is one Commission Staff with Staff
employees assigned to act either as Adversary or Advisory Staff on a case by
case, ad hoc basis. Presumably, a Staff member serving as Advisory Staff in an
individual case may have his or her overall job performance evaluated by Staff
members serving as Adversary Staff. This organizational structure understandably
could create an inherent potential for bias. In this rate proceeding, AGLC
understands that Staff members that made recommended findings on the Affiliate
Audit acted as Advisory Staff. Advisory Staff then advised the Commission on
whether the Commission should adopt the audit findings proposed by those same
Staff members. This is an additional structural bias. AGLC is concerned that
these structural flaws in the Commission's process create an uneven playing
field, and ultimately create a procedural due process error. As an example, in
the list of items Advisory Staff recommended to the Commission in the
spreadsheet (and that the Commission largely adopted), Advisory Staff adopted
76% (19 of 25) of Adversary Staff's positions and only 24% (6 or 25) of AGLC's
positions. As discussed further herein, many of those Adversary Staff positions
adopted by Advisory Staff involve one-sided adjustments. The adjustments that
would reduce AGLC's revenue requirements were adopted and recommended by
Advisory Staff and similar adjustments that would increase AGLC's revenue
requirements were rejected or not considered. Viewing these results in total
casts serious doubt on the independence and impartiality of the Advisory Staff
structure at the Commission. Significantly, in this case and a number of other
cases, the Advisory Staff recommendations were a starting point for the
Commission's decision, and the Commission ultimately adopted most of Advisory
Staff's recommendations without explanation. This demonstrates the importance of
Advisory Staff's recommendation to the Commission. However, the current
organizational structure for rate proceedings is failing to produce an
independent, impartial and balanced recommendation, which the Commission needs
to make sound policy decisions. This inherent bias constitutes a procedural due
process error.
COST
OF CAPITAL
Return
on Equity
16.
The
Commission erred by setting a return on equity of 10.375 percent that is
significantly lower than any other ROE that the Commission has set in recent
years for any other utility. The extremely low rate of return adopted in the
Order violates the standards set forth by the U.S. Supreme Court in
Bluefield
Water Works & Improvement Co. v. Public Service Comm'n of West
Virginia
, 262
U.S. 679 at 692-93, 43 S.Ct. 675 (1923) and
FPC
v. Hope Natural Gas Co.
, 320
U.S. 591 at 605, 64 S.Ct. 281 (1944) in that it fails to provide AGLC a just and
reasonable return which will enable it "to operate successfully, to maintain its
financial integrity, to attract capital, and to compensate investors for the
risk assumed."
Federal
Power Commission v. Hope Natural Gas Co.,
at 605.
Notably, the Commission recently allowed Georgia Power Company to earn up to an
ROE of 12.25 percent. This return is nearly 20 percent higher than the 10.375
percent the Commission ordered for AGLC. As Dr. Morin demonstrated, the 10.375%
return is also significantly lower than the 11% average allowed ROE for
Adversary Staff witness Hill's Group of Gas Utilities. AGLC Exh. No. 69. Such a
low ROE harms both AGLC and AGL Resources Inc. ("AGLR") as is evidenced by
AGLR's stock downgrade and comments from rating agencies of a potentially
negative impact on bond ratings following the Order. The Commission has not
adequately explained why AGLC is due such disparate treatment. In fact,
Adversary Staff argued during the proceeding that ROE should be lower if a PBR
is adopted, but the Commission has ordered an extremely low ROE while not
adopting a PBR. Such a low ROE might possibly provide short-term benefits for
customers but at a long-term detriment to those same customers as AGLC's ability
to obtain low cost financing will be damaged and AGLR's ability to reduce costs
for customers through further acquisitions will be harmed.
COST
OF CAPITAL
Debt
Cost
17.
It is
arbitrary, capricious and otherwise unlawful for the Commission to update one
cost item and not others. The Commission adopted without explanation Adversary
Staff's long-term debt cost of 6.64%. The difference between this figure and
AGLC's filed long-term debt and preferred equity cost of 7.14%
1
is that
Adversary Staff presented updated long-term debt information concerning actual
debt issued by AGL Capital Corporation through December 2004. However, in Docket
No. 4011-U (Jan. 3, 1993 Order), when the Company tried to update its testimony
with more recent figures, the Commission determined that the Company could not
do so in that or any future rate proceeding. Therefore, the Order is contrary to
the Commission's own order prohibiting AGLC from updating its filed testimony.
Further, by allowing one party to provide updated cost figures while denying the
utility that same ability is an unfair and unlawful procedure. In this case,
Adversary Staff updated long-term debt cost but not short-term debt cost. The
Commission is well aware that short-term interest rates have marched steadily
upward since AGLC filed its case in October 2004. Obviously, if the Commission
updates long-term rates with the most recently available data in the test year,
the Commission should have updated short-term rates with the most recently
available data. The most recently available data presented in the case shows
AGLC's short-term rates at 3.39%, not the 2.96% adopted by the
Commission.
2
COST
OF SERVICE AND RATE BASE ISSUES
Removing
Synergies of Acquisitions
18.
The
Commission did not address in its Order its treatment of VNG cost savings and
the NUI acquisition. The references are line items in the spreadsheet that was
attached to the Order. According to Sch. 5 of that spreadsheet, the Commission
decreased AGLC's operations and maintenance expense by $5.672 million with
respect to VNG acquisition cost allocation savings and $7.644 million with
respect to NUI cost allocation savings. Since there is no explanation for these
adjustments, AGLC can only surmise as to the rationale. In any event, it
is poor
public policy to capture all of the cost-savings achieved from AGLR's
acquisition of other utilities in that this action may provide ratepayers with
short-term benefits but does so to the long-term detriment of ratepayers and the
Company. Instead of punishing the Company for cost-saving measures such as
AGLR's prudent acquisitions, the Commission should further encourage cost-saving
acquisitions that can provide real benefits to Georgia customers.
19.
As
mentioned above, the Commission determined that the NUI acquisition will result
in test year savings to AGLC of $7.644 million. However, these
unsubstantiat
ed NUI
cost savings are not known and measurable savings and furthermore, AGLR incurred
additional NUI acquisition costs that are not included in the unsubstantiated
cost savings figure relied on by Adversary Staff. Further, it is unfair,
one-sided, arbitrary and capricious for the Commission to disallow the property
tax expense increase (see below) as being not known and measurable, but include
NUI "savings" as known and measurable. As Mr. O'Brien testified, it is simply
too soon to measure all of the costs and savings associated with the NUI
acquisition. Tr. 596-98.
Caroline
Street
20.
The
Commission's Order deviates from long-standing, below-the-line accounting
treatment of gains and losses on the sale of land (non-depreciable assets).
Capturing gain on the sale of real estate for which the value of the buildings
and fixtures is negative is contrary to the accounting rules that AGLC must
follow and related precedent. Commission Rule 515-3-1-.10 (AGLC Exh. No. 53)
requires the Company to maintain its records in conformity with the FERC system
of accounts. Under the FERC system of gas accounts, 18 CFR Part 201, the cost of
land for general plant must be recorded in Account No. 389 Land and Land Rights.
Gains on the disposition of property in this account are then recorded in
Account No. 421.1 Gain on Disposition of Property. As FERC recognized in
Florida
Gas Transmission Company,
20 FERC P
61,298 (1982), the result of recording the gain in Account No. 421.1 "is to take
account for regulatory purposes of the gain on the sale of the existing
facilities by reflecting it in a below-the-line account for the benefit of
investors."
See
also, Bd. of Public Utility Com'rs,
271 U.S.
at 32 (customers pay for utility service but property belongs to shareholders);
see
also, Philadephia Suburban Water Co. v. Pa. Public Utility Comm'n,
427 A.2d
1244 (Pa. Comm. Ct. 1981) (reversing commission decision that attempted to
capture the gain from the sale of realty and pass the gain to ratepayers via a
ten-year amortization);
Boise
Water Corp. v. Idaho Pub. Utililities Comm'n,
578 P.2d
1089 (Id. 1978) ("[N]ot having paid the cost of purchasing nondepreciable
property, ratepayers are not entitled to reap the rewards or losses on its sale
or other transfer."). FERC further determined in
Florida
Gas Transmission Company,
25 FERC
¶ 61005 (1983), "
the
accounting regulations have been interpreted to bind the Commission
notwithstanding the Commission's judgment concerning the proper ratemaking and
certificate policies which should be followed,"
citing
Panhandle
Eastern Pipe Line Co. v. F.E.R.C.
, 613
F.2d 1120 (D.C. Cir. 1979)
. The
Commission likewise must follow its own rule, which requires an accounting
treatment consistent with FERC accounting rules.
Significantly,
in a settlement in Docket No. 4167-U regarding environmental response costs, the
Staff requested a provision that provides for a sharing with ratepayers of any
gain on the sale of property that is remediated under the environmental response
recovery mechanism. No such provision would have been necessary if the Staff
genuinely believed that such a gain was an "above-the-line" transaction and
therefore automatically captured for the benefit of ratepayers. Rather, the
negotiated provision requested by Staff was necessary because the proper and
traditional treatment for gains on non-depreciable property is "below-the-line."
Therefore, the gain on the Caroline Street sale appropriately was captured
below-the-line. Moreover, this treatment is proper whereas here ratepayers were
never required to pay for a return of AGLC's investment through
depreciation.
21.
The Order
exceeds the Commission's authority by retroactively capturing gains from a
period prior to the test year. Pursuant to O.C.G.A. § 46-2-25(d), "[a]ny action
taken by the commission . . . shall be effective from the date such actions are
reduced to writing and are signed . . . . No such action or order of the
commission may be given retroactive effect." Thus, any part of a Commission rate
order that would have a retroactive effect is simply beyond the Commission's
authority and void.
Georgia
Pub. Serv. Comm'n
v.
Atlanta Gas Light Co.
, 205 Ga.
863, 888, 55 S.E.2d 618, 633-34 (1949). According to the Georgia Supreme Court:
"
Even if
the commission, after fixing a rate or charge, subsequently determines that the
rate was unreasonably high, it has no authority in the revision of the rate to
require that refunds or reparations be made of collections under the rate which
had been established."
Id.
The sale
of the Caroline Street property occurred in September 2003. By confiscating gain
from a prior rate period and ordering that this gain be distributed over time to
customers in future rates, the Commission in effect is ordering the Company to
refund collections made under prior rates. Even if the Commission decided that
AGLR should not have captured any gain, such event did not occur during a test
year and therefore should not impact present rates.
See
also, Bd. of Public Utility Com'rs,
271 U.S.
at 32 ("[T]he law does not require the company to give up for the benefit of
future subscribers any part of its accumulations from past operations. Profits
of the past cannot be used to sustain confiscatory rates for the
future.").
22.
The
Commission's Order was also unlawful because it violated the rule against
single-issue ratemaking. It is a well-established principle that rational
ratemaking must not examine rate factors in isolation but instead must examine a
variety of contemporaneous factors.
See
Georgia Power Co. v. Georgia Pub. Serv. Comm'n
, 231 Ga.
339, 341, 201 S.E.2d 423, 425 (1973) (a utility's revenue requirement includes
the sum of its "proper operating expenses, depreciation expense, taxes, and a
reasonable return on the net valuation of its property that is used in the
public service"). For example, the cost of facility repair that a gas company
bore in 1942, or a rate base consisting only of property the company used for
utility service in 1942, obviously would not be "proper" factors for setting
rates to be charged in 2005. Nor would isolating the 1942 cost of facility
repair and considering it along with other 2005 operating expenses be proper,
rational rate-making. Rather, the expenses, net rate base and other cost and
revenue figures used to determine a utility's revenue requirement and amount of
rate increase or decrease
must be
derived from the same relevant time period. Reaching back and capturing the gain
from the 2003 sale of Caroline Street and including that gain alongside 2005
costs, revenues and expenses violates the rule against single-issue
ratemaking.
3
23.
The
Commission's capture of the Caroline Street gain that occurred outside of the
test year while simultaneously disallowing other known and measurable costs such
as pension, health insurance and OPEB costs because these costs occur outside
the test year is arbitrary and capricious.
24.
The Order
also errs by failing to take into account that AGLC already shared a significant
portion of the Caroline Street gain by prepaying pension expense thereby
reducing revenue requirement by $600,000 per year, and by not taking into
account that AGL Services Company ("AGSC") suffered a loss through the sale on
the buildings and other infrastructure that existed at Caroline Street. If the
Commission captures this gain, it must also recognize the loss and decreased
cost of service that occurred as a result of the same transaction. This
one-sided, treatment of counting only items that reduce AGLC's revenue
requirement is erroneous, unfair and unlawful.
AGSC
Plant
25.
The
Commission adopted, without explanation, Adversary Staff's proposal to remove
approximately $45.1 million of plant used to provide AGLC's service to customers
but that is shown on AGSC's books. Once again, it is impossible for AGLC to
respond adequately to the Commission's decision concerning AGSC without knowing
the Commission's rationale for adopting Adversary Staff's position. Indeed, the
Commission adopted each substantive Adversary Staff recommendation concerning
rate base but the Commission's entire "explanation" concerning these $100
million in rate base adjustments is: "The Commission finds as a matter of fact
that the appropriate rate base for the test period is $1,187,677,000." Even
Adversary Staff admitted that the AGSC plant is used for AGLC's utility service
(Tr. 1052), which of course is the standard for a utility's cost recovery for
plant.
See
Bd. of Public Utility Com'rs,
271 U.S.
at 31 ("Constitutional protection against confiscation does not depend on the
source of the money used to purchase the property. It is enough that it is used
to render the service."). Significantly, but for AGSC having the plant, AGLC
would have to acquire its own. Therefore, the Commission erred by excluding the
AGSC plant from rate base.
Rate
Base Pension Adjustments
26.
The
Commission erred by excluding without explanation full pension liability as a
rate base reduction of $15.211 million (with accompanying impact on expenses as
well). This is an unreasonable, one-sided adjustment in that it fails to
consider the offsetting and large Other Comprehensive Income that created the
pension liability and that will become pension expense in future years. The
Commission's treatment is also not consistent with the treatment afforded
Georgia Power in its 2004 rate case and therefore is discriminatory.
Depreciation
27.
The
Commission erred by adopting a methodology that is contrary to the accounting
rules that AGLC must follow and that will force future customers to pay for
present costs. Commission Rule 515-3-1-.10 (AGLC Exh. No. 53) requires the
Company to maintain its records in conformity with the FERC system of accounts.
The FERC system of accounts requires AGLC to record the actual "book cost of gas
plant retired" less the net salvage value of the same plant retired. AGLC Exh.
No. 54. Mr. Roff for AGLC followed this method, Mr. King for Adversary Staff did
not. Instead, Mr. King compares actual retirement costs with the book cost of
plant that is
not
retired.
Rather than comply with the FERC accounting rules that AGLC must follow, Mr.
King testified that AGLC must align its depreciation accounting to certain
statements by the SEC concerning financial, instead of regulatory, accounting.
With the exception of Pennsylvania and certain rate settlements in Georgia in
which King was the Adversary Staff witness, no other commission has adopted Mr.
King's unique method. Mr. King's approach may reduce depreciation rates and cost
recovery now but will cause the undercollection of retirement costs and force
future ratepayers to pay for present utility costs, much like Georgia Power
Company's customers now face extraordinary rate increases because of past fuel
cost undercollections. The Commission should protect future ratepayers by
adopting Mr. Roff's depreciation rates that comply with the Commission's and
FERC's accounting rules and appropriately assigns present ratepayers their fair
share of the costs.
Property
Tax Expense
28.
The
Commission erred because the property tax increase projected by AGLC is known
and measurable. The government agency responsible for tax assessments has
already indicated that it plans to utilize its stock and debt approach to value
AGLC's property for the 2005 property tax assessment. Use of this methodology
will increase AGLC's property tax by approximately $2.4 million. At a minimum,
the property tax increase is more known than the alleged cost savings AGLR would
achieve this year from the NUI transaction. Thus, AGLR stated that it hopes to
achieve certain cost savings to AGLC associated with the NUI transaction and the
tax commissioner said it plans to increase AGLC's taxes. It is one-sided, unfair
and legally infirm for the Commission to conclude that the anticipated cost
savings associated with the NUI transaction are known and measurable while the
tax commissioner's plan to increase taxes is not.
Operating
Expense Escalation
29.
The
Commission without explanation reduced AGLC's proposed Operations &
Maintenance ("O&M") expense increase projection by $1.83 million. It is
unreasonable (and punitive) for the Commission to determine that O&M expense
shall not increase by the Consumer Price Index ("CPI") amount when certain costs
are beyond AGLC's control and clearly rising. Additionally, it is unreasonable
and unfair to expect further cost reductions for AGLC due to future investment
in technology when AGLC has already incorporated cost savings in its test period
payroll costs. It is payroll costs that are primarily impacted by investment in
technology, and AGLC reflected a decrease in its payroll costs. The O&M
expense adjusted for the CPI will be impacted minimally, if at all, by future
investments in technology. AGLC has not increased rates since 1993 during which
time the CPI has increased over 30 percent. However, AGLC has already cut
substantial costs and the additional substantial revenue cut the Commission has
ordered could reduce AGLC's ability to provide the current level of utility
service. Notably, the Commission is removing the incentive for AGLR to engage in
further cost-cutting acquisitions (see above) yet holds O&M expense at the
current level, thereby assuming that AGLR will continue to make these
cost-saving acquisitions. This is neither good public policy nor consistent with
the law.
Adjustments
to 3-Year Expense Projections
30.
It is
unreasonable, arbitrary and capricious for the Commission to ignore strong
evidence of cost increases that are not in the Company's control. The
Commission's decision is arbitrary and capricious for not considering the known
and measurable pension expense, OPEB expense and group health insurance
increases that will occur. The Commission also did not adjust for known
increases in pension and OPEB expense for the test period based on updated
actuarially determined estimates. This refusal to update pension, OPEB and
health insurance expense while updating long-term debt is clearly erroneous and
one-sided decision-making.
Composite
Ratio
31.
The
Commission accepted Adversary Staff's position to adjust downward allocations by
$2.955 million by incorporating the Q4 2004 composite ratio. Updating the
composite ratio figures the Company filed in October 2004 to November 30,
2004, but not adjusting other items, is another example of one-sided treatment
that is contrary to law and prior Commission decisions. Further, only $1.24
million of Adversary Staff's proposed adjustment was related to updating the
composite ratio to Q4 2004. The remaining amount was related to Adversary
Staff's position to include AGLR in the composite ratio for the allocations of
information system and technologies, facilities and certain other service
providers. This inclusion would not be consistent with the method approved for
AGSC by the Securities and Exchange ("SEC") Public Utilities Holding Company Act
of 1935 ("PUHCA") Staff. Once again, this treatment is one-sided and arbitrary
in that the Commission adopted Adversary Staff's depreciation position that was
based on Mr. King's statement that his methodology was consistent with the
method advocated by the SEC but also adopted a composite ratio inclusion that is
inconsistent with that approved for AGSC by the SEC PUHCA staff.
COST
OF SERVICE STUDY
32.
A
six-month pre-filing requirement is an unlawful restriction on AGLC's ability to
request a rate increase at any time. Pursuant to O.C.G.A. § 46-2-25(a), a
utility has a right to file for a rate increase at any time upon providing "30
days' notice to the commission and to the public . . . by filing … new
schedules…." Under this statute, the Commission can then suspend the
implementation of these rates for up to five more months (i.e., a total of six
months from the utility's filing.) The Commission's new requirement would turn
the statute's one-month notice into a seven-month notice and the period from the
time the utility decides to file for a rate increase until the rates go into
effect would turn from six months to well over a year, and more likely up to 1½
years (to complete and file the study, wait 6 months to file the new schedules
and then wait 6 more months). This requirement exceeds the Commission's
statutory authority.
33.
The
Commission's new Cost of Service Study requirement can not likely be implemented
for other practical reasons in that they are vague and overreaching. According
to the Order (p.14), AGLC must provide "comprehensive and complete" work papers
that "fully" disclose how the economic costs were developed including
documentation of "all judgments and methods" used to establish "every specific
assumption." AGLC respectfully suggests that this standard is vague, unworkable
and could require voluminous documentation of, among other things, all judgments
made. The Order further requires that the work papers "must be so comprehensive
as to allow others initially unfamiliar with the study to replicate" the study.
This requirement is vague and unworkable in that it rests in part on the level
of understanding of the person receiving the work papers on behalf of Staff or
some other party.
RATE
DESIGN
34.
The
Commission determined that
the rate
design recommendations of the Commission Adversary Staff are just and
reasonable. Specifically, the Commission rejects the Company's proposal to
sculpt the DDDC for the G-11 class…. The Commission maintains the current G-11
threshold to remain in place for the assessment of the customer
charge.
Findings
of Fact ¶ 17. This is the entire "explanation" for the Commission's
decision to reject all of the proposals that AGLC presented that are designed to
decrease the number of commercial customers that currently are leaving the
Company's system. There is no evidence to support the Commission's determination
that the G-11 threshold should remain the same, as even the CUC witness agreed
to some change in the threshold and the record shows that AGLC needs to change
the threshold to retain commercial customers.
35.
The
Commission also erred by adopting without comment Adversary Staff's request to
reject "the Company's proposal to recover the PRP cost through the DDDC charge"
(
Id.)
even
though Adversary Staff's own expert witness called the current PRP cost recovery
method "regressive."
36.
The
Commission likewise erred by failing to adopt the E-1 Rate and Economic
Development Fund (without explanation) that will help provide jobs and
infrastructure to rural Georgia. The E-1 Rate will not result in any rate
increase to customers but the Commission rejected it nonetheless.
III.
Conclusion
WHEREFORE,
AGLC respectfully requests the Commission to rehear and reconsider its Order and
schedule oral argument.
This 9th
day of May, 2005.
Respectfully
submitted,
/s/ L.
Craig Dowdy
L. Craig
Dowdy
/s/
Alan R. Jenkins
Alan R.
Jenkins
Attorneys
for
Atlanta
Gas Light Company
McKenna
Long & Aldridge LLP
303
Peachtree Street
Suite
5300
Atlanta,
GA 30308
404-527-4000
1
Adversary Staff collapsed preferred stock into long-term debt. AGLC filed
preferred equity cost as 8.57% and long-term debt cost as 6.68%. If rolled
together, AGLC's filed long-term and preferred equity cost is
7.14%.
2
This
unfair treatment is also a due process violation.
3
See
Business and Professional People for the Pub. Interest v. Illinois Commerce
Comm'n
, 585 N.E.2d 1032, 1061-62 (Ill. 1991):
The rule against single-issue ratemaking recognizes that the
revenue formula is designed to determine the revenue requirement based on the
aggregate costs and demand of the utility. Therefore, it would be improper to
consider changes to components of the revenue requirement in isolation. Often
times a change in one item of the revenue formula is offset by a corresponding
change in another component of the formula.
See also National Fuel Gas Distrib. Corp. v. Pennsylvania
Pub. Utility Comm'n
, 464 A.2d 546, 567 (Pa. Cmwlth. 1983) ("the
consideration of expense and revenue items in isolation . . . could result in
the setting of confiscatory rates");
A. Finkl & Sons Co. v.
Illinois Commerce Comm'n
, 620 N.E.2d 1141, 1147 (Ill. App.
1993):
[I]nstead of
considering costs and earnings in the aggregate, where potential changes in one
or more items of expense or revenue may be offset by increases or decreases in
other such items, single-issue ratemaking considers those changes in isolation,
ignoring the totality of
circumstances.
CERTIFICATE
OF SERVICE
I, Alan
R. Jenkins, an attorney for Atlanta Gas Light Company, hereby certify that I
have served Atlanta Gas Light Company's Petition for Rehearing, Reconsideration
and Oral Argument upon the following parties in Docket No. 18638-U by depositing
a copy of same in the United States mail with sufficient postage, addressed as
follows:
Phil
      Smith
Staff
      Attorney
Georgia
      Public Service Commission
244
      Washington Street, S.W.
Atlanta,
      GA 30334
Jeffrey
      C. Stair
Georgia
      Public Service Commission
244
      Washington Street
Atlanta,
      GA 30334
Reece
      McAlister
Executive
      Secretary
Georgia
      Public Service Commission
244
      Washington Street, SW
Atlanta,
      GA 30334
Tressa
      deAndrade, Esq.
Georgia
      Public Service Commission
244
      Washington Street
Atlanta,
      GA 30334
Clare
      McGuire
Consumers'
      Utility Counsel
Governor's
      Office of Consumer Affairs
2
      Martin Luther King, Jr. Dr.
Suite
      356, East Tower
Atlanta,
      GA 30334
Dan
      Walsh
Assistant
      Attorney General
State
      of Georgia, Department of Law
40
      Capitol Square, S.W.
Atlanta,
      GA 30334
Terri
      M. Lyndall
Galloway
      & Lyndall, LLP
Six
      Piedmont Center, Suite 303
3525
      Piedmont Road
Atlanta,
      GA 30305
Charles
      B. Jones, III
Sutherland,
      Asbill & Brennan, LLP
999
      Peachtree Street, N.E.
Suite
      2300
Atlanta,
      GA 30309-3996
Michael
      D'Angelo
Infinite
      Energy/Intelligent Energy
2050
      Center Avenue, Suite 500
Fort
      Lee, NJ 07024
Eric
      M. Whitmore
Regulatory
      Affairs Manager
Infinite
      Energy, Inc.
1355
      Terrell Mill Road
Building
      1484
Marietta,
      GA 30067
Joseph
      C. Monroe
SouthStar
      Energy Services, LLC
817
      West Peachtree Street, N.W.
Suite
      1000
Atlanta,
      GA 30308
Robert
      B. Remar, Esq.
Rogers
      & Hardin, LLP
2700
      International Tower
Peachtree
      Center
229
      Peachtree Street, N.E.
Atlanta,
      GA 30303
Jim
      Clarkson
Resource
      Supply Management
998
      Veterans Memorial Highway
Mableton,
      GA 30126
Kevin
      C. Greene
Melissa
      L. Pignatelli
Troutman
      Sanders LLP
600
      Peachtree Street, N.E.
Suite
      5200 Bank of America Plaza
Atlanta,
      GA 30308-2216
Jocelyn
      M. Stargel
Southern
      Company Gas LLC
14
th
Floor
270
      Peachtree Street
Atlanta,
      GA 30303
Jeannette
      Mellinger
Consumers'
      Utility Counsel Division
47
      Trinity Avenue
Atlanta,
      GA 30334
Livia
      Whisenhunt
CEO
PS
      Energy Group, Inc.
2987
      Clairmont Road, Suite 450
Atlanta,
      GA 30329
Lynn
      R. Westergaard, President
Resource
      Service Ministries, Inc.
1841
      Marietta Blvd., N.W.
Suite
      G
Atlanta,
      GA 30318-2849
Gary
      Bunce
Walton
      EMC Natural Gas
P.O.
      Box 260
842
      US Hwy. 78, NW
Monroe,
      GA 30655
Peyton
      S. Hawes, Jr.
2467
      Montview Drive, N.W.
Atlanta,
      GA 30305
G.L.
      Bowen, III, President
GTMA
50
      Hurt Plaza, Suite 985
Atlanta,
      GA 30303
Steve
      Ruback
The
      Columbia Group, Inc.
785
      Washington Street
Canton,
      MA 02021
Randall
      D. Quintrell
999
      Peachtree Street, N.E.
19
th
Floor, First Union Building
Atlanta,
      GA 30309
J.
      Renee Kastanakis
4645
      Club Circle
Atlanta,
      GA 30319
This 9th
day of May, 2005.
/s/
Alan R. Jenkins
Alan R.
Jenkins
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
AGL
      RESOURCES INC.
(Registrant)
Date:
      May 9, 2005
/s/
      Richard T. O'Brien
Executive
      Vice President and Chief Financial Officer