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TXU Gas Co Statement of Intent to Increase Change Rates
Stephen J.Houle Vice President C€9D0R TXU Gas Company 1601 Bryan Street Dallas,Texas 75201 Tel 214 812 4821 Fax 214 812 3221 shoule1@oncorgroup.com May 23, 2003 TO THE GOVERNING BODY OF THE CITY OF SOUTHLAKE Filed herewith is an original of TXU Gas Company's (the "Company") Statement of Intent to Change Rates in the Company's Statewide Natural Gas System. While information has been filed with your municipality regarding the Company's overall cost of service, your municipality only has original jurisdiction over the Company's Distribution System rates within the city limits of your municipality. The Company requests that your municipality either deny the rate request or defer your municipality's jurisdiction over this request to the Railroad Commission of Texas (the r "Commission") in order to conduct one proceeding regarding the Company's costs of service for the entire System. If your municipality does not take one of the two actions requested above, the Company will appeal your municipality's action to the Commission and consolidate your municipality's appeal with the Company's case already on file with the Commission. The Company is requesting your municipality to take one of the two actions above in an effort to lower costs associated with this rate request,costs that will ultimately be borne by the Company's customers. Please review the Rate Filing Package and take appropriate action for the Company's rate request. If a representative of your municipality wishes to review any workpapers used to construct the Rate Filing Package, please contact Ms. Teri Smart at 214-812-4832. If you have any questions, please feel free to contact me. Yours truly, Enclosure Receipt Acknowledged By: Li: Name: Title: Date: TXU GAS COMPANY STATEMENT § OF INTENT TO CHANGE RATES § BEFORE THE CITY OF IN THE COMPANY'S STATEWIDE § GAS UTILITY SYSTEM § TABLE OF CONTENTS TABLE OF CONTENTS EXECUTIVE SUMMARY STATEMENT OF INTENT TESTIMONY SUMMARIES S. J. Houle (Rate Case Overview) J. A. Greer R. K. Pruett D. A. Watson S. N. Ragland B. M. Gillespie M. D. Moseley B. D. Griffin T. L. Dubberly A. L. Warren B. H. Fairchild A. D. Anderson G. L. Goble S. J. Houle (Cost Allocation & Rate Design) TARIFF FOR GAS SERVICE COST OF SERVICE (COS) SUMMARY SCHEDULES -TXU GAS COS SCHEDULES -TXU GAS DISTRIBUTION COS SCHEDULES -TXU LONE STAR PIPELINE L -1- Lor TXU Gas Company 2003 Rate Case Executive summary. TXU (10, INTRODUCTION Since 1909, TXU Gas has been providing natural gas service to homes and businesses in north central Texas. From the natural gas pipeline built from the Petrolia field in Clay County and growing to over 6,800 miles of pipeline and 26,000 miles of distribution lines existing today, TXU Gas has grown with Texas. The Company now serves over 1.4 million residential, commercial and industrial customers in approximately 550 communities with safe, reliable and reasonably priced natural gas. With this rate case, TXU Gas is taking another bold step to ensure that our customers will continue to receive the same high quality service they have come to expect and depend on. OVERVIEW TXU Gas has met the challenge of the rapidly growing economy that it serves. The Company has made the investment and incurred the expenses necessary to keep the gas flowing to our customers in a safe and efficient manner. We have worked hard to control O&M expenses and will continue to do so in the future. TXU Gas has filed this rate case because our rates do not reflect our current level of reasonable and necessary expenses. Like any investor, investors in TXU Gas expect to earn a return on their investment and for that investment to be returned to them over time. Largely because of the infrastructure improvements we have made in the last five years, we are not earning a reasonable return overall on the TXU Gas invested capital. CAPITAL INVESTMENT TXU Gas has invested approximately $721 million in its gas pipeline and distribution system in the last five years. After taking into account depreciation L.. during that period, the value of our plant in service has increased over $400 million. Page 1 of 4 This is a 66% increase in the net plant in service over a five-year period. These investments were necessary to maintain the safety and reliability of the system. Much of the investment was to replace pipe and other facilities that had reached the end of their service lives. The investments were also made in response to the rapid economic growth in our service area, which required the replacement of pipe as development encroached on high pressure lines, relocations of pipe as roads and freeways were built or expanded, and extensions of pipe and increases in capacity as the population expanded into outlying areas. OPERATING AND MAINTENANCE EXPENDITURES Despite the rapid growth in the economy and the increased capital investment, TXU Gas has been able to closely control its operating and maintenance (O&M) expenses. Between 2001 and 2002, expenses in the field have slightly decreased. Operating expenses over all have slightly increased as a result of increased pension funding requirements and employee benefits, areas of expense that have been rapidly rising across the national economy and are largely outside of the Company's control. TXU Gas is continuing to take steps to limit increases in O&M expenses. This rate case contains several adjustments reflecting additional steps that have been taken to reduce O&M after the close of the recent calendar year. As a result of our WINS program, for example, O&M expenses have been adjusted downward in the rate case from actual costs by$6.7 million. SIMPLIFIED RATES We have taken great care in developing this rate case. We have simplified our approach so that it will be much easier for our customers and our regulators to understand our business. For instance, in this case we are proposing rates for only six customer classes: Four classes of service from the inlet of our system through both C Page 2 of 4 pipeline and distribution facilities and two classes of service for customers that only use the pipeline facilities. All of our customers will have only one rate to pay. RATE FILING PACKAGE We have improved and updated the rate filing package in many areas. We have a new detailed cost of service study and a newly designed Tariff for Gas Service. We have prepared a new depreciation study for both the Pipeline and Distribution assets and a new lead/lag study to determine the need for cash working capital. The filing package itself has been made much simpler and is presented in a format that we feel will be easier to use. Finally, we have spent many hours ensuring the connection between our books and records and the filing package is transparent and accurate. Our various accounting teams have spent a lot of time trying to make sure the financial presentations are as straightforward as possible. We are preparing to answer any questions that may arise over the course of the case as expeditiously as possible. RATE INCREASE Overall, TXU Gas is asking for approximately a 7.2% rate increase. Residential rates would increase approximately 10% even though our analysis shows that an increase well in excess of this amount could be justified. For residential customers, this will increase their typical bill approximately $3.59. As a matter of policy, we believe that the increase in Residential rates should be limited to 10%. There is a slight increase for the commercial class and no increases for other classes of customers. L Page 3 of 4 TARIFF IMPROVEMENTS We are requesting, in addition to a rate increase, a number of other changes to our tariff. The two most important are to provide a capital investment adjustment factor (CIAF) and we are also seeking to revise the gas cost recovery mechanism. Both of these proposals are meant to reduce future rate case expenses and to provide more timely recovery of costs, thus reducing regulatory expenses and improving the Company's financial future. As our service area grows and our facilities continue to age, we expect that our investment in the system will continue to exceed depreciation for the foreseeable future. This will make it highly likely that we will have to continue to file rate cases on a regular basis if the CIAF is not approved. We are also proposing changes in the gas cost recovery procedures, which will limit future rate- case expenses while enhancing the TRC's and City's ability to monitor and review those costs. Rate cases are expensive for all concerned, especially for our ratepayers. A broad consensus exists that steps should be taken to limit those costs. We believe our proposals will accomplish that end. CONCLUSION TXU Gas is proud of its achievements since 1909, and especially in the last five years. We have maintained a safe and reliable gas system through the hard work of our employees and the investment of a tremendous amount of capital. Reducing our field operating expenses has not been easy but we have done it. Through our rate activities of the last few years we have gained a better understanding of what the Cities and TRC want to see in a rate filing. While areas of disagreement may remain over policy, we are confident that our hard work in preparing this package will allow the process to focus on those policy differences. We expect the result of this effort to produce a fair treatment of our request that will allow us to continue to provide safe and reliable service to our customers. C Page 4 of 4 TXU GAS COMPANY STATEMENT OF § BEFORE THE RESPECTIVE INTENT TO CHANGE RATES IN THE § GOVERNING BODY OF THE TXU COMPANY'S STATEWIDE GAS § GAS SYSTEM CITIES AND TOWNS UTILITY SYSTEM § TXU GAS COMPANY STATEMENT OF INTENT TO CHANGE RATES IN THE STATEWIDE GAS UTILITY SYSTEM TO THE HONORABLE CITY OR TOWN COUNCIL: COMES NOW TXU Gas Company ("TXU Gas" or the "Company"), a natural gas utility under Subtitles A and B of Title 3 of the Texas Utilities Code (Vernon 1998, Supp. 2003) (the "Utilities Code"), and files this its Statement of Intent to Change Rates in the Company's statewide gas utility system (the "System") pursuant to Utilities Code §§ 104.101-104.111. Also filed herewith and made a part of hereof for all purposes, is the Tariff for Gas Service in the System (the "Tariff') and the supporting Cost of Service Schedules (the "Schedules") as well as (Ips, all items listed in Section II of this Statement of Intent. All of these items together constitute the Company's Rate Filing Package. The Company would show as follows: I. JURISDICTION TXU Gas is filing a rate case on behalf of the Company's entire System. The new rates will affect all of TXU Gas' customers on the System. The Company's Rate Filing Package includes Schedules for the Company's Distribution System and the Company's Pipeline System. The Distribution System is the local distribution system that provides gas utility service inside the city limits of approximately 440 incorporated cities (the "Cities") in the State of Texas.' The Pipeline System is the transmission component of the Company's gas system that transports The Distribution System also serves environs customers outside of the city limits of the approximately 440 incorporated cities. The Distribution System serves approximately 550 incorporated cities, towns, and unincorporated areas in the System. L STATEMENT OF INTENT-PAGE 1 (kw natural gas to local distribution companies, certain industrial customers, and other customers for on and off-system usage. The Company is requesting approval of its cost of service for both the Pipeline System and the Distribution System. Rates have been developed that present statewide rates for gas service to Pipeline System and Distribution System customers. Pursuant to Utilities Code § 103.001, the Cities have exclusive original jurisdiction to set rates to be charged by local distribution customers inside of the city limits of the Cities. Thus, the Cities have original jurisdiction over the proposed Distribution System rates within their respective city limits only, unless they cede their jurisdiction to the Commission pursuant to Utilities Code § 103.003. The Railroad Commission of Texas (the "Commission") has exclusive original jurisdiction over this Statement of Intent and authority to fix a schedule of rates to be charged to customers served by the Pipeline System pursuant to Utilities Code § 102.001(a), all rates to be (11w charged to environs customers, and rates for any city that cedes its jurisdiction over a gas utility's rates, operations, or services to the Commission pursuant to Utilities Code § 103.003. The Commission also has jurisdiction over the Company's gas costs pursuant to the Final Order issued in Gas Utilities Docket No. 8664.2 Additionally, the Commission has exclusive appellate jurisdiction of any municipal decision regarding this Statement of Intent pursuant to Utilities Code § 102.001(b). This Statement of Intent applies solely to the Distribution System's rates within your city's jurisdiction. 2 As set forth in the Tariff, the Company is requesting a new gas cost recovery factor and procedures to accompany the recovery factor. STATEMENT OF INTENT-PAGE 2 II. (lar DESCRIPTION OF RATE FILING PACKAGE The following items are included in the Rate Filing Package: 1. Table of Contents 2. Executive Summary 3. Statement of Intent 4. Testimony Summaries of Company Witnesses 5. Tariff for Gas Service 6. Cost of Service Schedules III. PROPOSED TARIFFS AND SCHEDULES The Company proposes to change its rates in accordance with the Tariff, which includes, but is not limited to, an Index of Rates and List of System Cities,3 rates for all classes of gas utility service, all rate adjustments, all charges, and all surcharges being sought in this filing. The Tariff also presents the Company's Service Rules and Regulations. The Company's Service (hipe Rules and Regulations will become effective upon filing with this case in accordance with Commission Rule 7.45 as set forth in Title 16 of the Texas Administrative Code § 7.45. As set forth in the Rate Filing Package, the Tariff supersedes all previous tariffs on file in the Cities and in areas served by TXU Gas outside of the Cities, for the specific services mentioned therein. IV. • DETAILS OF PROPOSED CHANGES A. Test Year The Company's proposed cost of service for the System as set forth in this Statement of Intent and Rate Filing Package is based on the twelve-month period ending December 31, 2002, updated for known changes that are measurable with reasonable accuracy. 3 This Index does not include a list of unincorporated communities, but the Company is seeking new rates for these environs customers. (we STATEMENT OF INTENT-PAGE 3 (16, B. Compliance with Rule 7.205 As required by Commission Rule 7.205 as set forth in Title 16 of the Texas Administrative Code § 7.205, details of each proposed rate increase are contained in Schedules A through L of the Cost of Service Schedules, which are filed herewith. The effect of the proposed increase in revenues of the utility is set forth in Schedule A. All customers within the System will be affected by this change. The class and number of affected customers is set forth in Schedule J-1 of the Schedules. The specific affects of the rate changes in your city are described in the attached Exhibit A. C. Reason for Rate Change Under current rates, the Company is not recovering its reasonable and necessary costs associated with operating the System. The Company has invested more than $721 million in gross new capital in the System between December 31, 1997, and December 31, 2002. Primarily,(Impe the Company invests new capital in the System for the followingreasons: to P Y P Y (1) promote safety and reliability through the replacement of pipelines and other facilities that have reached the end of their service lives; (2) to accommodate government entities by relocating pipelines and other facilities to promote increased economic activities; (3) to provide service to new customers; and (4) to comply with regulatory requirements set by federal, state, and municipal authorities. The Company is currently earning a rate of return on net capital investment of only 4.31% in the System. TXU Gas is therefore not earning a reasonable return on its capital investment in the System, nor does it have a reasonable opportunity to do so. Accordingly, the rates currently in effect in the System are not just and reasonable, in violation of Utilities Code § 104.003. In this filing, TXU Gas proposes a revenue requirement that will permit it the opportunity to earn a reasonable rate of return of 8.99%. L STATEMENT OF INTENT-PAGE 4 (by Estimated total increase in annual revenue is $69.5 million or 7.24% based upon Current Annual Revenue from all customers. The filing is based on a Test Year ended December 31, 2002, and reflects present annual revenue under present rates of $960.5 million and Estimated Annual Revenue under the proposed rates of$1,030.0 million. The proposed changes will result in a major change as that term is defined in Utilities Code § 104.101. As set forth in the Rate Filing Package, the Tariff supersedes all previous tariffs on file in the Cities and in areas served by TXU Gas outside of the Cities, for the specific services mentioned therein. V. NOTICE Included with this Statement of Intent is a copy of the public notice for this proceeding. The notice is attached to this Statement of Intent as Exhibit B.4 The notice will be published in newspapers of general circulation in 111 counties encompassing the geographical area of the System. A list of these counties is included in the Tariff. In accordance with Utilities Code § 104.103, the notice will be published for four successive weeks. VI. AUTHORIZED REPRESENTATIVES TXU Gas' business address and telephone number for the purposes of this filing are: TXU Gas Company 1601 Bryan Street Dallas, Dallas County, Texas 75201 214.812.2323 4 The average bill for residential and commercial customers indicated on the notice is derived from the calculation found on WP/L-3/4. L STATEMENT OF INTENT-PAGE 5 TXU Gas' authorized representatives are: kore Stephen J. Houle Vice President TXU Gas Company 1601 Bryan Street Dallas, Dallas County, Texas 75201 214.812.2323 and John E. Moeller, Jr. Hunton& Williams LLP 1601 Bryan Street, 30th Floor Dallas, Dallas County, Texas 75201-3402 214.979.3000 General inquiries concerning this Statement of Intent should be directed to Mr. Houle at the above-stated address and telephone number. All pleadings, motions, orders, and other documents filed in this proceeding should be served upon Mr. Moeller, at the above stated address. WHEREFORE, PREMISES CONSIDERED, TXU Gas prays that your city (1) deny the rate request or (2) defer jurisdiction to the Commission regarding this rate request pursuant to Utilities Code § 103.003, and award TXU Gas such other and further relief to which it may be entitled. L STATEMENT OF INTENT-PAGE 6 Respectfully submitted, HUNTON& WILLIAMS LLP By: E- Hire ft Li,. L, ;Alm E. Moeller, Jr. State Bar No. 14246950 Myles F. Reynolds State Bar No. 24033002 1601 Bryan Street, 30th Floor Dallas, TX 75201 214.979.3000 214.880.0011 (fax) ATTORNEYS FOR TXU GAS COMPANY C C STATEMENT OF INTENT-PAGE 7 EXHIBIT A TXU Gas Rate Case Southlake, Texas Case Summary Impact of Rate Filing in Southlake Increase Residential Revenue $ 267,248 or 6.00% Commercial Revenue 19,816 or 2.57% Industrial Sales/Transportation 0 or 0.00% Service Charges 33,073 or 93.58% Total Revenue Change $ 320,137 or 6.08% Impact of Rate Filing on Typical Customer Bills in Southlake • Typical residential customers bill using 6 MCF per month will be $ 41.69 or an increase of approximately $3.96 per month • Typical commercial customer's bill using 30 MCF per month will be $ 173.04 or an increase of approximately $7.86 per month Number of Customers in Southlake • 7,058 total customers > 6,603 residential customers > 455 commercial customers > 0 industrial sales/transportation customers L Page 1 of 1 Exhibit B NOTICE OF GAS RATE INCREASE REQUEST TXU Gas Company (the "Company"), in accordance with the Gas Utility Regulatory Act as set forth in the Texas Utilities Code, hereby gives notice of its intent to implement a new schedule of rates for natural gas service to be charged to all of the customers served by the Company in the incorporated municipalities and unincorporated areas in the Company's statewide gas utility system (the "System"). The proposed revisions to the respective rate schedules will impact all classes of service and all fees and charges presently being assessed by the Company on its transmission and distribution systems. As of the filing date of the Company's Statement of Intent to change rates, the proposed rates are expected to approximately produce a $69,524,311 or a 7.24 percent increase in the Company's annual revenues from customers in the System. The proposed change will affect approximately 1,344,030 residential, 125,603 commercial, and 1,441 industrial sales and transportation customers in the System. The proposed change constitutes a "major" change as that term is defined by Section 104.101 of the Texas Utilities Code. The proposed changes will have differing impacts on individual customers, depending on consumption and current applicable rate schedules. The proposed changes in rates will not become effective for environs customers until similar changes have become effective within the nearest incorporated city or town. A residential customer receiving a bill for 6 Mcf will see a bill of approximately$41.69, which would constitute an average increase of approximately $3.59 per month or a 9.4% increase. A commercial customer receiving a bill for 30 Mcf will see a bill of approximately$173.04, which would constitute an average increase of approximately $13.91 per month or a 8.7% increase. The effect of the proposed changes to rates and services for industrial sales and transportation customers, which may be significant for individual customers, will vary depending on type of service and consumption. The proposed change would constitute an increase of $0.00 or a 0% increase in annual revenues to the Company for industrial sales and transportation customers. A complete copy of the Statement of Intent, filed with the Railroad Commission of Texas and all of the System cities and towns on May 23, 2003, is available for inspection in the Company business office located at 1601 Bryan St., Dallas, Texas 75201. Persons with specific area questions or who want information about this filing may contact TXU Gas Company at 1-800-460-3030. Any affected persons located inside of the city limits of a municipality served by the Company may file written comments or protest concerning the proposed change in rates with their respective municipality. Any affected persons located outside of the city limits of a municipality served by the Company may file written comments or protest concerning the proposed change in rates with Docket Services Section of the Legal Division, Railroad Commission of Texas, P.O. Box 12967, Austin, Texas 78711-2967, but have a limited time to do so. Pursuant to the Rules of the Railroad Commission of Texas, Title 16 of the Texas Administrative Code Section 7.230, any affected persons may file written comments or a protest concerning the proposed change in the environs rates with the Docket Services Section of the Railroad Commission of Texas, at any time within 30 days following the date on which the change would or has become effective. The Company is proposing to have these proposed rates become effective on June 27, 2003. Este es un aviso para informar a los clientes de TXU Gas Company (la "Compania") que la Compaiiia esta solicitando un aumento en la tarifa de gas. Este aumento afectara a todos los consumidores de gas de la Compania en el estado de Texas. Si usted tiene alguna pregunta con respecto a este aumento,por favor llame a TXU Gas Company al 1-800-460-3030. S. J. HOULE (RATE CASE OVERVIEW) L tie SUMMARY OF TESTIMONY Witness: Stephen J. Houle Background: Received a Bachelor of Science degree in Electrical Engineering in 1977 and a Master of Business Administration in 1979. Employed by Dallas Power & Light in 1977. Worked in Engineering Department, Regulatory Service Department, and Rate Department through 1983. Became Supervisor of Rate Design for Texas Utilities Electric Company in 1984 and Supervisor-Rate and Cost Analysis in 1987. Named Rate Manager in 1990. Assumed responsibility for rates and regulatory affairs for both gas and electric companies in 1998 and was elected to current position of Vice President, Rates & Regulation in May 1999. Purpose of Testimony: (1) Provide case overview; (2) discuss policy considerations; (3) describe the Rate Filing Package; and (4) describe the TXU Gas (lw legal and operational organization and relationship to certain affiliates. Key Points/Issues: 1. TXU Gas is not currently earning a reasonable rate of return. New rates need to take into account increased capital investment and increased costs. 2. TXU Gas is proposing fully allocated system-wide rates set forth in a standardized Tariff for Gas Service. Revenues from opportunity transactions will be credited against the Company's overall revenue requirement. 3. TXU Gas will consolidate jurisdiction over all rates and services in the Commission by way of de novo appeal of municipal ordinances or through cities ceding jurisdiction as permitted by the Texas Utilities Code. 4. TXU Gas will propose a capital investment adjustment factor and earnings monitoring report to insure that rates will remain just and reasonable for the Company and all Lcustomers. Houle — Summary of Testimony (Policy & Rate Case Overview) Page 1 of 2 Key Points/Issues (cont.) 5. TXU Gas is proposing the adoption of a Tariff for gas service that contains rates for all services provided by TXU Gas and the terms and conditions of service under which those services will be provided. Summary/Recommendations: Setting rates on a system-wide basis for all customer classes is appropriate and reasonable. The proposed Tariff provides a comprehensive set of rates for all services provided by TXU Gas and the terms and conditions under which those services will be provided, and should be approved. (kw (kw Houle— Summary of Testimony (Policy & Rate Case Overview) Page 2 of 2 (4•, J. A. GREER (poi SUMMARY OF TESTIMONY Witness: James A. Greer Background: Mr. Greer is the Director of Asset Management for pipeline and distribution assets for the Company. He has a B.S. in Electrical Engineering from the University of Texas at Arlington and a M.B.A. from Texas Christian University. Mr. Greer has held various engineering, project management, and asset management positions over a 19-year affiliation with TXU Corp. and its subsidiaries and predecessors. Purpose of Testimony: (1) Explain the Company's capital investment policy, processes, and investment; (2) explain the Company's O&M expenditures policy, processes, and levels of expense; (3) explain increased regulatory oversight over the Company's operations and impacts on expense; and (4) explain the Company's Safety Compliance Program instituted in 2000. Key Points/Issues: 1. The Company's management and design process regarding capital expenditures is prudent. 2. The Company's capital investment is reasonable and necessary, and is used and useful. 3. The Company's O&M expenditures and processes involved are reasonable and necessary. 3. The historical costs and future estimated costs associated with the Pipeline Integrity Program are reasonable and necessary. 4. The costs and efforts associated with the Safety Compliance Program were reasonable and necessary and have been accounted for in a reasonable manner. Summary/Recommendations: Affirm all levels of capital and O&M expense incurred, affirm future levels of Pipeline Integrity Program costs, and affirm Safety Compliance Program expenditures. Greer— Summary of Testimony Page 1 of 1 Ce R. K. PRUETT C L SUMMARY OF TESTIMONY Witness: R. Keith Pruett Background: Received a Bachelor of Business Administration degree in Accounting from the University of Texas at Arlington in 1982. Licensed as a Certified Public Accountant in the state of Texas in 1988. Employed by Dallas Power & Light Company in 1974. Currently employed as Corporate Accounting Manager for the Oncor Group since November 2001. Purpose of Testimony: (1) Support the integrity of the Company's financial data; (2) Support compliance with Commission Rules 7.310, 7.503, 7.501, 7.5414; (3) Define Operation and Maintenance Expenses; (4) Support Ratemaking Adjustments; (5) Support shared services provided by Oncor Electric to TXU Gas. Key Points/Issues: 1. TXU Gas complies with Commission Rules and accounts for its costs consistent with NARUC. 2. The filing is based upon the twelve-month period ended December 31, 2002 adjusted for known changes and conditions that are measurable with reasonable accuracy. Adjustments are shown on Schedule G-5 and detailed on various supporting schedules contained within the rate filing package. These adjustments reflect the normal ongoing cost of gas utility operations. 3. Oncor Electric affiliate transactions involving Distribution and Pipeline meet the standards set forth in Section 104.55 of the Texas Utilities Code. These transactions are reasonable, necessary and billed at actual cost, with no profit or margin added to the billings. The methodologies used in billing are appropriate for each service provided. Summary/Recommendation: TXU Gas has complied with applicable Commission Rules relative to a rate filing proceeding. Total O&M for Distribution has been adjusted to $176,419,172 and represents the ongoing normal expenses for operating the Distribution System. Total O&M for Pipeline has been adjusted to $72,813,539 and represents the ongoing, normal expense for operating a Pipeline Pruett— Summary of Testimony Page 1 of 2 Summary/Recommendation (cont.): System. The O&M affiliate expense from Oncor Electric to Distribution and Pipeline in the approximate amount of $22.1 million is reasonable and necessary to support the ongoing operating activities of a Distribution and Pipeline System. These amounts have been appropriately documented and disclosed in this filing. C C Pruett— Summary of Testimony Page 2 of 2 (pi D. A. WATSON L (kw SUMMARY OF TESTIMONY Witness: Dane A. Watson Background: Bachelor of Science degree in Electrical Engineering from the University of Arkansas at Fayetteville and a Master's Degree in Business Administration from Amberton University (formerly Amber University). Completed depreciation courses offered by Depreciation Programs, Inc. Joined the TXU System in 1985, and began working in the area of depreciation and valuation within the Texas Utilities Generating Company. Responsible for, among other things, conducting valuation and depreciation studies for the majority of the domestic TXU System companies. Currently employed by TXU Business Services and responsible for the management of Depreciation, Records, and Property Accounting for various areas within the TXU Corp. (formerly Texas Utilities Company) system of companies, including TXU Gas ("Company"). Purpose of Testimony: (16., 1. Provide and support the components of invested capital for TXU Gas that is used to establish the return components of the Company's rate request. 2. Discuss the results of the recent depreciation studies completed for TXU Gas Distribution and TXU Lone Star Pipeline. 3. Support and justify the recommended depreciation rate changes for TXU Gas Distribution and TXU Lone Star Pipeline. 4. Discuss the accounting treatment of Safety Compliance Program costs. Key Points/Issues: 1. TXU Gas' total depreciable plant has significantly increased from December 31, 1999 to December 31, 2002. 2. Removal costs associated with pipe and other facilities located on the distribution system have dramatically increased in recent years while at the same time gross salvage proceeds have diminished significantly. 3. The Safety Compliance Program costs are being accounted for in the most equitable way for the customers as well as the Company. Watson — Summary of Testimony Page 1 of 2 Summary/Recommendations: The rate base for TXU Gas is a true and accurate representation of rate base for the period December 31, 2002. All appropriate additions and deductions to rate base have been made. The depreciation studies of TXU Gas depreciable property as of December 31, 2002 describes the extensive analysis performed and the resulting rates that are now appropriate for their respective property. The depreciation rates should be set at the recommended amounts in order to recover the Company's total investment in property over the estimated remaining life of the assets. The rates are designed to recover the significant increase in removal costs for distribution property the Company has experienced in recent years. These removal costs are projected to continue to increase in future years due to more stringent regulation. The inclusion of costs for the Safety Compliance Program in rates is an equitable way for the Company to recover the costs of complying with the Commission's directive in GUD No. 9151 and 9186. L Watson — Summary of Testimony Page 2 of 2 S. N. RAGLAND (kbr SUMMARY OF TESTIMONY Witness: Stephen N. Ragland Background: Received a Bachelor of Science degree in Business Administration in 1977. Certified Public Accountant in the State of Texas. Employed by Dallas Power & Light in 1979. Held numerous financial and accounting positions since this time and assumed my present position of Affiliate Transaction and Regulatory Financial Manager in July 2002. Have previously testified before the Railroad Commission of Texas and the Public Utility Commission regarding affiliate transactions. Purpose of Testimony: (1) Discuss the business relationships and the services provided by TXU Business Services, TXU Receivables Company, and TXU Vermont Insurance Company to the various subsidiaries and divisions of TXU Corp., including TXU Gas. (2) Support the conclusion that all charges between these parties are in compliance with the affiliate standard set out in GURA Section 104.055(b). Key Points/Issues: (1) The costs charged by TXU Business are for support services (accounting, information technology, human resources, etc.) that would be required of any business and are therefore necessary. The cost of each service is assigned to each subsidiary or division based on the principal of cost-causation. The services were provided at cost with no equity return or profit. Proper cost control mechanisms are in place to ensure reasonableness. The prices charged to TXU Gas were no higher than the prices charged to others for the same item or class of items. (2) TXU Receivables Company is a wholly-owned bankruptcy remote subsidiary of TXU Gas Company which sells undivided interests in accounts receivable it purchases from various TXU Corp. subsidiaries and divisions to financial institutions. Those TXU Corp. subsidiaries participating in this program benefit by (1) expediting cash flow, thereby reducing cash working capital requirements; (2) having access to a lower cost source of funds; and (3) Ragland — Summary of Testimony Page 1 of 2 Key Points/Issues (cont.): lowering the amount of debt on their balance sheet, thereby maintaining a better debt rating than they might otherwise have. The cost of this service is assigned to each subsidiary or division based on the principal of cost- causation and the price charged to TXU Gas was no higher than the price charged to others for the same item or class of item. (3) TXU Vermont Insurance Company is a wholly-owned single-parent captive insurance company that provides varying levels of insurance for various TXU Corp. subsidiaries or divisions. Those TXU Corp. subsidiaries participating in this program benefit by (1) minimizing the impact of insurance deductible expenses and (2) having access to a commercial reinsurance market to which they might otherwise not have. The cost of this service is assigned to each subsidiary or division based on the principal of cost-causation and the price charged to TXU Gas was no higher than the price charged to others for the same item or class of item. (4) Those costs described above have been adjusted for known and measurable changes. Summary/Recommendations: The costs described above and billed to TXU Gas Distribution and TXU Lone Star Pipeline during the test year ended December 31, 2002 were reasonable and necessary; reasonably reflect the actual cost of services to these entities, and were no higher than the prices charged to other subsidiaries, divisions, or to other unaffiliated companies for the same item or class of items. As such, these costs should be included in the cost of service for these two entities as proposed. L Ragland — Summary of Testimony Page 2 of 2 C B. M. GILLESPIE C SUMMARY OF TESTIMONY Witness: Brian M. Gillespie, President, Destination Excellence, Inc. Background: Brian M. Gillespie has over 20 years of customer service experience including five years since founding Destination Excellence. From 1999 to early 2001, Mr. Gillespie was acting President and CEO of Utilipro, a utility billing and customer care outsource company. In his role, Mr. Gillespie analyzed the utility billing and customer service industry, competitively positioned Utilipro, established contract pricing and negotiated contracts and pricing with clients. Prior to founding Destination Excellence, Mr. Gillespie was Vice President of ITT Sheraton Reservations and was employed by AT&T for ten years where he had a number of assignments including customer care operations in consumer services and business products. Mr. Gillespie received a Bachelor of Civil Engineering from Purdue University in 1979 and a Masters of Business Administration from the University of Michigan in 1981. Purpose of Testimony: (1) To review the process used to determine the best method of providing billing and customer care services to TXU Gas' customers, (2) To demonstrate why the option of contracting with TXU Energy was reasonable and necessary; and (3) To demonstrate that the price charged by TXU Energy to TXU Gas for the contracted services is not higher than prices charged by TXU Energy to any other party for the same services. Key Points/Issues: The project considered three operational alternatives to support TXU Gas' needs for a Customer Information System (CIS), Bill Processing and Presentment, Bill Payment Processing and Customer Care Services: (1) contract services with an outsource company, (2) contract services from TXU Energy, or (3) build and operate dedicated TXU Gas customer service facilities. Each option was evaluated in terms of quality, operating cost, capital investment, and risk to TXU Gas. C Gillespie — Summary of Testimony Page 1 of 2 Summary/Recommendations: It was determined that contracting services with TXU Energy would be the option that provided the best balance between quality, operating cost, capital investment, and risk. The option of using TXU Energy would likely result in cost savings to TXU Gas of between $4 million and $12.5 million per year over the outsourcing option (total operating savings of $48 million over five years), and between $3.5 million and $8 million per year over the company-owned and operated system option (total operating savings of $30 million over five years). In addition, TXU Energy is a proven provider, the agreement requires no capital investment and, since there will be no immediate change in systems, personnel or processes, the risk is minimal. tor Gillespie— Summary of Testimony Page 2 of 2 M. D. MOSELEY (kor. SUMMARY OF TESTIMONY Witness: Marc D. Moseley Background: Received Bachelor of Business Administration degree in Accounting in 1972 and is a Certified Public Accountant in the State of Texas. Employed by Dallas Power & Light in 1974. Worked in Corporate Accounting, General Accounting, Regulatory Accounting, and Accounting Services departments. Held positions of Assistant Controller and Controller prior to being elected Vice President in the Regulatory department in 1996. Became Vice President of Accounting Support for the Oncor Group in March 2003. Has previously provided testimony before the Public Utility Commission of Texas on accounting- related matters in Docket Nos. 25230, 22350, 21527, 18490, 15195, 11735, 9300, 5640, 5330, and 5256. Purpose of Testimony: (1) Discuss the appropriate accounting under Generally Accepted Accounting Practices ("GAAP") for regulatory assets Carse in general; (2) Describe the Company's regulatory assets and the specific accounting treatment that is being requested for these assets; (3) Demonstrate that these regulatory assets were created and are being amortized in accordance with GAAP; and (4) Show that the regulatory treatment proposed by the Company enables it to recover its regulatory assets in a way that is fair to the Company and its customers. Key Points/Issues: The Company, in this proceeding, has identified and should be able to recover through rates the costs related to: • the transition obligation related to Other Post Employment Benefits, • the 1997 Enhanced Retirement Plan, • the 1999 Early Retirement and Voluntary Severance Plans, • the Winning Innovative Services Program • the Safety Compliance Program, and C Moseley— Summary of Testimony Page 1 of 2 Summary/Recommendation: The Company's request for the recovery of various regulatory assets included in this proceeding is reasonable, and recovery of these regulatory assets is fair, reasonable, and consistent with precedent established by this and other regulatory bodies. C C Moseley— Summary of Testimony Page 2 of 2 (.3 B. D. GRIFFIN L Lie SUMMARY OF TESTIMONY Witness: Bill D. Griffin Background: Received a Bachelor of Business Administration in 1980. Became a Certified Public Accountant in 1986. Employed by Texas Electric Service Company in 1980. Joined the Corporate Tax Department in 1988. Currently serve as Income Tax Director. Purpose of Testimony: (1) The purpose of my testimony is to present the level of federal income tax expense to be included in the Company's cost of service and (2) Sponsor Schedules E-7, E-7.1, E-7.2, and G-7 of the Rate Filing Package. Key Points/Issues: The federal income tax expense, investment tax credit and accumulated deferred federal income taxes included in this case was determined pursuant to applicable federal income tax laws and regulations, state law and regulations and generally accepted accounting principles. Summary/Recommendation: The federal income tax expense, investment tax credit and accumulated deferred income taxes incurred by TXU Gas represent a normal level of expense, are just and reasonable and should be included in the company's cost of service. C Griffin — Summary of Testimony Page 1 of 1 (aw T. L. DUBBERLY SUMMARY OF TESTIMONY Witness: Tommy L. Dubberly Background: Received a Bachelor and Master of Business Administration. Certified Public Accountant. Employed by TXU organization since 1976. Currently Director of Corporate Tax. Purpose of Testimony: Support non-income tax expense included in cost of service. Sponsor schedule G-6 of the Rate Filing Package. Key Points/Issues: Tax expense related to payroll, ad valorem, gross receipts, and franchise. Summary/Recommendations: The non-income tax expense incurred by TXU Gas was pursuant to applicable law and is therefore, just and reasonable and should be included in the company's cost of service. Dubberly— Summary of Testimony Page 1 of 1 (se A. L. WARREN (10, thw SUMMARY OF TESTIMONY Witness: Autry.L. Warren, Jr. Background: Received a Bachelor of Business Administration degree in Accounting in 1980 and is a Certified Public Accountant ("CPA") in the State of Texas. Employed by Dallas Power & Light Company in 1980. Worked in Corporate Accounting, Customer Services, and Rates & Regulatory departments. Held positions of Supervisor of Financial and Operations Reports, Budgets Supervisor, General Accounting Manager, Customer Service & Marketing Manager, Regulatory Financial Manager, and Rates Manager. Became Director, Gas Regulatory in November 2002. Has previously provided testimony before the Railroad Commission of Texas ("RRC") on accounting-related matters in GUD 9225, GUD 9299, and GUD 9313; and before the Public Utility Commission of Texas ("PUC") in Docket No. 20200. Purpose of Testimony: (1) Sponsor the results of lead/lag studies for measuring the cash working capital ("CWC") allowance required for TXU Gas; and (2) Present the Company's proposal for the recovery of rate case expenses associated with the filing. Key Points/Issues: The Company, in this proceeding, has identified and should be able to recover through rates the following: • The CWC requirement for Distribution and Pipeline; and • Reasonable rate case expenses through the application of a surcharge according to the tariff as proposed by the Company. After the proceedings and hearings have concluded in this filing, there should be a short hearing for the purpose of presenting rate case expenses. Summary/Recommendations: The CWC requirement for Distribution is ($53,763,162), and the CWC requirement for Pipeline is ($3,224,772). The CWC amounts are negative primarily because Distribution and Pipeline both sell receivables, and this results in the overall receipt of revenues ahead of the payment of the associated expenses. The Company's calculation of CWC requirements is fair and reasonable and appropriately included in rate calculations. The Warren — Summary of Testimony Page 1 of 2 Summary/Recommendations (cont.): calculation is consistent with the guidelines provided in the PUC Substantive Rule 25.231 and the final order from the RRC in GUD 9145. The Company's proposal for the recovery of rate case expenses is fair, reasonable, and consistent with precedent established by this and other regulatory bodies. C C Warren — Summary of Testimony Page 2 of 2 C B. H. FAIRCHILD C SUMMARY OF TESTIMONY Witness: Dr. Bruce Fairchild, consultant with FINCAP, Inc. Background: M.B.A. and Ph.D. in finance, accounting, and economics; Certified Public Accountant. Extensive consulting experience involving regulated industries, valuation of closely-held businesses, and other economic analyses. Previously held managerial and technical positions in government (PUCT), academia, and business, and taught at the undergraduate, graduate, and executive education levels. Broad experience in technical research, computer modeling, and expert witness testimony. Purpose of Testimony: Recommend a fair rate of return to apply to the TXU Gas' net invested capital, based on appropriate capital structure ratios and costs of debt, preferred stock, and common equity. Key Points/Issues: 1. The Company's capital structure ratios should be based on Local Distribution Company (LDC) industry group averages. This approach is consistent with economic and legal principles underlying a fair rate of return, reflects the mix of capital required to accommodate the business risks associated with providing transmission and distribution services, allows the ROE to be based directly on estimates for comparable utilities, and follows precedent established in previous Commission-approved dockets. 2. The Company's costs of debt and preferred stock should reflect the average rates of the same group of companies from which the capital structure ratios were derived. 3. The ROE estimate reflects the application of the Discounted Cash Flow (DCF) model and the risk premium methods to the same group of LDCs used to determine the capital structure and debt and preferred stock costs. The DCF approach revealed a ROE range between 10.4% and 11.4%, and the risk premium approach revealed a ROE range between 10.74% and 12.14%. Fairchild — Summary of Testimony Page 1 of 2 Key Points/issues (cont.): 4. The inclusion of the TXU Gas transmission business in this rate case introduces additional business risk, which is not reflected in the ROE estimates derived from LDC industry group. There are currently few publicly traded "pure play" pipelines not in financial distress available to serve as benchmarks in setting capital structure ratios, so an upward adjustment to ROE will be necessary to reflect this additional risk. 5. An upward ROE adjustment for equity flotation costs is reversed as a result of a downward adjustment from the reduced risk associated with Mr. Goble's recommended rate structures. 6. Dr. Fairchild recommends an authorized rate of return on common equity of 11.5%. If Mr. Goble's proposed rate structures and Rate CIT are not approved, then Dr. Fairchild recommends a return on equity of at least 11.75%. Summary/Recommendations: The appropriate return should be as follows: Percent Component Weighted Capital Component of Total Cost Cost Long-term Debt 51.0 6.71% 3.42% Preferred Stock 1.1 5.53% 0.06 Common Equity 47.9 11.50% 5.51 Total 100.0% 8.99% C Fairchild — Summary of Testimony Page 2 of 2 Cri A. D. ANDERSON Cr SUMMARY OF TESTIMONY Witness: Alan D. Anderson Background: Mr. Anderson has a B.A. from Rice University and a Ph.D. in Economic History from Johns Hopkins University; he has testified as and has been qualified an expert in many areas of the natural gas industry and is currently the President of the consulting firm Energy Planning, Inc. Purpose of Testimony: (1) Explain the current gas cost recovery mechanism; (2) offer a proposal for a new gas cost recovery factor; and (3) offer a proposal for a new reconciliation and review procedure to accompany the new gas cost recovery mechanism Key Points/Issues: 1. The present gas cost recovery mechanism does not take into account all gas costs. 2. Lost and unaccounted for gas will be included in the gas cost recovery mechanism, not base rates. 3. Changes in the carrying cost of working gas in storage will be included in gas costs going forward. 4. Gas costs will be the same for all classes of sales customers. 5. New reconciliation and review procedures will replace the twelve-month reconciliation and three-year prudence review. Summary/Recommendations: Adopt the new gas cost recovery factor in all respects and adopt new reconciliation and review procedures to supplant the lengthy and expensive procedures presently in place. C Anderson — Summary of Testimony Page 1 of 1 (6.; G. L. GOBLE (so L SUMMARY OF TESTIMONY C Witness: Gary L. Goble Background: Received Bachelor of Science degree in 1974 and a Master of Business Administration degree in 1980. Employed by the Arkansas Public Service Commission from 1974 to 1978, including serving as Chief of Rates. Employed by the Public Utility Commission of Texas from 1978 to 1980 as Manager of Electric and Water Rates. Became a consultant for the firm of Gilbert Associates in 1980 and became a Manager in the firm's Austin, Texas office in 1981. Became a principal in the firm of Management Applications Consulting, Inc. in 1984. Previously testified before the Railroad Commission of Texas, the Public Utility Commission of Texas, and other regulatory or municipal agencies. Purpose of Testimony: Present and demonstrate the reasonableness of (1) the adjustments to volumes, customers and revenues resulting from the impact of the weather normalization and year-end Cyr customer adjustments; (2) the development of test year Maximum Daily Usage by class; (3) the development of allocation factors; (4) the development of the class cost of service study computations; (5) the development of the proposed rates; and (6) the development of the proposed miscellaneous charges. Sponsors Schedules J-1, K-1 through K-7, and L-1 through L-3. Co-sponsors Schedules A and A-1. Key Points/Issues: 1. Company made adjustments to sales and customers to reflect changes in the number of customers occurring during the test year so that costs and revenues related to changes in the number of customers are presented at a level that more accurately depicts the anticipated costs and revenues during the period in which rates will be in effect. 2. Because gas sales to Residential and Commercial Sales customers are greatly influenced by temperature conditions, the test year sales volumes used as the basis for setting future rates for those Goble— Summary of Testimony Page 1 of 3 Key Points/Issues (cont.): (w. classes will be overstated or understated depending upon whether test year temperatures have been higher or lower than normal. Thus, it is necessary to normalize test year sales so that there is no understatement or overstatement of sales. 3. The Company made adjustments to Industrial and Transportation customers, sales, and revenues to remove customers from the Distribution data who were not served by the Distribution system and to recognize the effects of customers moving between classes or leaving the Distribution system. 4. Capacity costs are allocated to classes using each class' contribution to the system volumes delivered during the days of Maximum Daily Usage ("MDU") occurring during the months of December, January, February, and March of the test year. The 4 MDU method correctly and accurately reflects the manner in which capacity costs are incurred by the Company. (hre 5. The allocation factors chosen for the cost of service study best represent the cost drivers that produce the cost being allocated. 6. The results of the Pipeline Cost of Service Study indicate that the present rates for City Gate customers are below their allocated costs to serve and that the rates for Pipeline Transportation customers are significantly above their allocated costs to serve. The results of the Distribution cost of service study indicate that the rates for Residential Sales produce revenues substantially below the Residential costs to serve, that the rates for Commercial Sales are higher than their costs to serve and that the rates to Industrial Sales and Transportation customers are substantially higher than their costs to serve. 7. Under the proposed rates, the City Gate relative rate of return increases from 79% to 86% and the Pipeline Transportation relative rate of return decreases from 187% to 160%. The proposed rate for City Gate Service consists of a meter fee, a capacity charge, and a volume charge. The proposed Pipeline Transportation rate is similar in design except that a portion of the capacity costs are recovered in the Goble— Summary of Testimony Page 2 of 3 Key Points/Issues (cont.): L, volumetric charge by means of a declining block rate design. 8. The Company is proposing four unbundled gas distribution rates: Residential Sales, Commercial Sales, Industrial Sales, and Transportation. 9. The Company is proposing a two-step declining block rate with a monthly Customer Charge for the Residential Sales class. In addition, the Company proposes to continue the three-step Commercial Sales rate design along with its monthly Customer Charge, but to change the block breaks to better reflect the base and heating load profiles of the class. The Company further proposes to continue the existing four-step declining block rate design with a monthly Meter Charge for the Industrial Sales and Transportation classes. 10. The Company is proposing to standardize its charges for services other than Pipeline transportation service as either Miscellaneous Service rates subject to uniform application or as Ancillary Service charges subject to variable market conditions. Summary/Recommendations: The adjustments to volume, customers, and revenues that were made to reflect the effects of changes in the test year number of customers and weather effects are reasonable and necessary to reflect the usage characteristics and applicable rates of affected customers. The Maximum Daily Usage values employed by the Company in allocating capacity costs to the classes of service are reasonable, accurate, and fairly measure the impact that each customer class places upon the capacity-related portions of the Company's system. The overall class cost of service study presented in this proceeding allocates costs to customer classes in a fair and reasonable manner and is not biased in favor of or against any particular class. In designing the proposed rates, the Company has appropriately considered the impact of that rate design on customers. The Company has also designed the proposed rates in a manner that ensures that the customers who impose costs on the system are responsible for paying those costs. Goble— Summary of Testimony Page 3 of 3 Co; S. J. HOULE (COST ALLOCATION & RATE DESIGN) C �r SUMMARY OF TESTIMONY Witness: Stephen J. Houle Background: Received a Bachelor of Science degree in Electrical Engineering in 1977 and a Master of Business Administration in 1979. Employed by Dallas Power & Light in 1977. Worked in Engineering Department, Regulatory Service Department, and Rate Department through 1983. Became Supervisor of Rate Design for Texas Utilities Electric Company in 1984 and Supervisor-Rate and Cost Analysis in 1987. Named Rate Manager in 1990. Assumed responsibility for rates and regulatory affairs for both gas and electric companies in 1998 and was elected to current position of Vice President, Rates & Regulation in May 1999. Purpose of Testimony: (1) Explain generally the purpose of cost allocation and describe the cost allocation study performed in this case; (2) Explain the rate classes and types of services proposed in this case; (3) Describe generally the proposed Tariff for Gas Service. Key Points/Issues: 1. TXU Gas is proposing the adoption of a Tariff for gas service that contains rates for all services provided by TXU Gas and the terms and conditions of service under which those services will be provided. 2. TXU Gas is proposing a standard set of rates applicable on a systemwide basis to all customers receiving service from TXU Gas' distribution and pipeline system. For the pipeline, we are proposing two types of service: City Gate Service and Transportation Service. For the distribution system, we are proposing four types of service: Residential Sales, Commercial Sales, Industrial Sales, and Transportation Service. 3. The Company's objective in this case is to move every rate class to 100% relative rate of return subject to no class receiving either a rate decrease or an increase of greater than 10%. In this case, that objective results in Houle — Summary of Testimony (Cost Allocation & Rate Design) Page 1 of 2 Key Points/Issues (cont.): no increase for the Rate PT - Pipeline Transportation, Rate I - Industrial Sales, and Rate T - Transportation rate classes; a 2% increase for the Rate C - Commercial Sales rate class; and a 10% increase for the Rate R - Residential Sales rate class and the Rate CGS - City Gate Service rate class. 4. Service on the TXU Gas System is provided to six principal customer classes. On the pipeline portion of the TXU Gas system, those classes are: (1) city gate and (2) pipeline transportation. On the distribution portion of the system, those classes are: (1) residential sales; (2) commercial sales; (3) industrial sales; and (4) transportation. 5. Fixed costs should be allocated using the average of the peak daily usage occurring during the peak months of December through March, which is referred to as the Four Maximum Daily Usage method ("4MDU"). 6. A Cost Allocation Study is an accounting and engineering IIkw analysis that allocates plant investment, revenues, and expenses to the various classes of customers served by the utility. The allocation of a utility's costs to the various customer classes based on their individual characteristics results in the identification of the cost responsibility of each customer class. Summary/Recommendations: The cost allocation methodology used by TXU Gas is reasonable. The proposed rate design is reasonable, provides greater price transparency for customers, and ensures the opportunity for cost recovery by TXU Gas. The proposed Tariff provides a comprehensive set of rates for all services provided by TXU Gas and the terms and conditions under which those services will be provided. L Houle — Summary of Testimony (Cost Allocation & Rate Design) Page 2 of 2 C Tariff for Gas Service TXU Gas Company 500 N. Akard St. Dallas, Texas 75201 C TARIFF FOR GAS SERVICE TXU GAS COMPANY L RATE SCHEDULE: 1 TABLE OF CONTENTS APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 I. UTILITY OPERATIONS 3 II. CITIES AND COUNTIES SERVED BY TXU GAS COMPANY 4 III. DEFINITIONS 8 IV. GAS SERVICE RATES: 11 Rate CGS -City Gate Service 12 Rate PT - Pipeline Transportation 15 Rate R - Residential Sales 18 Rate C -Commercial Sales 19 Rate I - Industrial Sales 20 Rate T-Transportation 22 Rider GCR -Gas Cost Recovery 25 Rider FF- Franchise Fee Adjustment 26 Rider SUR -Surcharges 27 V. MISCELLANEOUS SERVICE RATES: 28 L Rate ANS-Ancillary Services 29 Rate LEP- Line Extension Policy 31 Rate M - Miscellaneous Charges 34 Rider CT-Competitive Transportation Service 37 Rider CIAF- Capital Investment Adjustment Factor 38 Rider RA- Retention Adjustment 40 Rider TAX-Tax Adjustment 41 VI. SERVICE RULES AND REGULATIONS 42 VII. STANDARD AGREEMENTS FOR SERVICE 74 Standard Transportation Agreement-City Gate Service 75 Standard Transportation Agreement- Pipeline 76 Standard Transportation Agreement- Distribution 77 General Transportation Contract Terms and Conditions 78 City Gate Transportation Terms and Conditions 91 Pipeline/Distribution Transportation Terms and Conditions 94 VIII. CURTAILMENT ORDER 96 L -2- co, I. UTILITY OPERATIONS C TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 2 Utility Operations APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 I. UTILITY OPERATIONS: TXU Gas Company owns and operates a natural gas pipeline and distribution system that provides natural gas service in 111 counties in Texas. The following will respond to inquiries regarding provisions of this Tariff for Gas Service: Mr. Autry Warren Director, Gas Regulatory TXU Gas Company 1601 Bryan Street, 32nd Floor Dallas, Texas 75201 Telephone: 214-812-3863 Email Address: AWARREN1 OTXU.COM Regulatory Support Hotline: 214-812-2323 C C -3- II. CITIES AND COUNTIES SERVED BY TXU GAS COMPANY G TARIFF FOR GAS SERVICE TXU GAS COMPANY `RATE SCHEDULE: 3 Cities and Counties Served by TXU Gas Company APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 4 II. CITIES AND COUNTIES SERVED BY TXU GAS COMPANY: CITIES SERVED BY TXU GAS COMPANY: Abbott Bowie Coolidge Abilene Boyd Cooper Addison Bremond Coppell Alba Bridgeport Copper Canyon Albany Bronte Copperas Cove Allen Brownsboro Corinth Alma Brownwood Corral City Alvarado Bruceville-Eddy Corsicana Alvord Bryan Covington Angus Buckholts Crandall Anna Buffalo Crawford Annona Buffalo Gap Cross Roads Anson Burkburnett Crowley Archer City Burleson Cumby Argyle Burnet Dallas Arlington Byers Dalworthington Gardens Athens Caddo Mills Dawson Aubrey Caldwell Decatur Le Aurora Calvert DeLeon Austin Cameron Denison Avery Campbell Denton Azle Canton Deport Baird Carbon DeSoto Balch Springs Carrollton Detroit Ballinger Cashion Community Dodd City Bandera Cedar Hill Double Oak Bangs Cedar Park Dublin Bardwell Celeste Duncanville Barry Celina Early Bartlett Centerville Eastland Bedford Chandler Ector Bellevue Chico Edgecliff Village Bellmead Childress Edom Bells Chillicothe Electra Belton Cisco Emhouse Benbrook Clarksville Emory Benjamin Clebume Ennis Bertram Clifton Euless Beverly Hills Clyde Eustace Blackwell' Cockrell Hill Evant Blanket Coleman Everman Blooming Grove College Station Fairfield Blossom Colleyville Fairview Blue Mound Collinsville Farmers Branch Blue Ridge Colorado City Farmersville Le Blum Comanche Fate Bogata Commerce Ferris Bonham Como Flower Mound -4 • - TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 3 Cities and Counties Served by TXU Gas Company ,...„ • APPLICABLE TO: Entire System REVISION: 0 DATE: _EFFECTIVE DATE: PAGE: 2 OF 4 Forest Hill Hurst Lorena Forney Hutchins Lott Fort Worth Hutto Lueders Franklin Impact Mabank Frankston Iowa Park Madisonville Fredericksburg Iredell Malakoff Frisco Irving Malone Frost Italy Manor Gainesville Itasca Mansfield Garland Jewett Marble Falls Garrett Josephine Marlin Gatesville Joshua Marshall Creek Georgetown Justin Mart Glen Rose Kaufman Maypearl Glenn Heights Keene McGregor Godley Keller McKinney Goldthwaite Kemp Megargel Goodlow Kennedale Melissa Gordon Kerens Meridian Goree Kerrville Merkel Gorman Killeen Mesquite L Granbury Knollwood Mexia Grand Prairie Knox City Midlothian Grandview Kosse Midway Granger Krum Mildred Grapevine Kurten Miles Greenville Lacy-Lakeview Milford Groesbeck Ladonia Mobile City Gunter Lake Dallas Moody Gustine Lake Worth Moran 'Haltom City Lakeport Morgan Hamilton Lakeside Muenster Hamlin Lampasas Munday Harker Heights Lancaster Murchison Haskell Lavon Murphy Haslet Lawn Nevada Hawley Leander New Chapel Hill Hearne Leona Newark Heath Leonard Newcastle Henrietta Lewisville Nocona Hewitt Lexington Nolanville Hickory Creek Lincoln Park Normangee Hico Lindsay North Richland Hills Highland Park Lipan Northlake Highland Village Little Elm Novice Hillsboro Little River Academy O'Brien Holland Llano Oakwood Holliday Lometa Oglesby Honey Grove Lone Oak Olney Howe Longview Ovilla Hubbard Loraine Palestine -5- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 3 Cities and Counties Served by TXU Gas Company J L _.. APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 OF 4 - Palmer Ross Thrall Pantego Rotan Throckmorton Paradise Round Rock Tioga Paris Rowlett Toco Parker Roxton Tom Bean Pecan Gap Royse City Trent Pecan Hill Rule Trenton Penelope Runaway Bay Trinidad Petrolia Sachse Trophy Club Pflugerville Sadler Troy Pilot Point Saginaw Tuscola Plano Saint Jo Tye Pleasant Valley San Angelo Tyler Point San Saba University Park Ponder Sanctuary Valley Mills Pottsboro Sanger Valley View Powell Sansom Park Van Alstyne Poynor Santa Anna Venus Princeton Savoy Vernon Prosper Seagoville Waco Putnam Seymour Walnut Springs Quanah Shady Shores Watauga Quinlan Sherman Waxahachie Quitman Snyder Weinert Ranger Somerville West Ravenna South Mountain Westlake Red Oak Southlake Westminster Reno (Lamar County) Southmayd Westover Hills Reno (Parker County) Springtown Westworth Village Retreat Stamford White Settlement • Rhome Star Harbor Whitehouse Rice Stephenville Whitesboro Richardson Strawn Whitewright Richland Streetman Whitney Richland Hills Sulphur Springs Wichita Falls Riesel Sun Valley Wilmer Rio Vista Sunnyvale Windom River Oaks Sunset Winters Roanoke Sweetwater Wixon Valley Robert Lee Talty Wolfe City Robinson Taylor Woodway Roby Teague Wortham Rochester Tehuacana Wylie Rockdale Temple Yantis Rockwall Terrell Rogers The Colony Roscoe Thomdale Total Cities: 437 Rosebud Thornton C -6- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 3 Cities and Counties Served by TXU Gas Company Cry APPLICABLE TO: Entire System REVISION: 0 DATE: . EFFECTIVE DATE: PAGE: 4 OF 4 COUNTIES SERVED BY TXU GAS COMPANY: Anderson Gregg Pecos Archer Grimes Rains Bandera Hamilton Red River Baylor Hardeman Reeves Bell Harris Robertson Bosque Harrison Rockwall Brazos Haskell Runnels Brown Henderson Rusk Burleson Hill San Saba Burnet Hood Schleicher Callahan Hopkins Scurry Cherokee Houston Shackelford Childress Hunt Smith Clay Jack Somervell Coke Johnson Stephens Coleman Jones Sterling Collin Kaufman Stonewall Comanche Kendall Tarrant Cooke Kerr Taylor Coryell Knox Throckmorton Crane Lamar Tom Green Dallas Lampasas Travis Delta Lee Upton Denton Leon Upshur Eastland Limestone Van Zandt Edwards Llano Walker Ellis Madison Waller Erath McLennan Ward Falls Midland Wichita Fannin Milam Wilbarger Fisher Mills Williamson Foard Mitchell Winkler Fort Bend Montague Wise Franklin Navarro Wood Freestone Nolan Young Gillespie Palo Pinto Glasscock Panola Total Counties: 111 Grayson Parker L. -7- �i III. DEFINITIONS TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 4 Definitions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 3 III. DEFINITIONS: AGREEMENT FOR GAS SERVICE. A written contract between Company and Customer under which Company provides Gas Service. APARTMENT HOUSE. A building or buildings containing more than four Dwelling Units all of which are rented primarily for nontransient use, with rental paid at intervals of one week or longer. Apartment House includes residential condominiums, whether rented or owner occupied. APPLICANT. A person or entity who requests Gas Service from Company. The inauguration of Gas Service to an Applicant by Company does not indicate that Company has inspected Customer's gas piping or appliances or determined the piping and appliances to be safe or adequate. BULK TRANSMISSION. The large diameter, high pressure pipeline from the Waha Hub to the Katy Hub, including the large diameter lateral pipeline connecting to the Bethel storage. CITY GATE CUSTOMER. A customer who purchases City Gate Service under Rate CGS. CODES. Codes governing gas installations. COMMERCIAL CUSTOMER. A customer who has a North American Industry Classification System Code beginning with 11, 22 (other than electric generation), 23, 41-46, 48, 49, 51-56, 61, 62, 71, 72, 81, or 91-93 or any other end-use customer to which no other rate schedule applies. COMMISSION. The Railroad Commission of Texas. COMPANY.TXU Gas Company, its successors, and its assigns. CUSTOMER. An individual, partnership, association,joint•venture, corporation, etc., or governmental agency who is receiving or who is receiving the benefit of gas service at a specified point of delivery. CUSTOMER'S GAS INSTALLATION. All pipes, equipment, or facilities of any kind on Customer's side of the Point of Delivery, except Company's metering equipment, used by Customer in taking Gas Service. DISTRIBUTION SYSTEM. That portion of the TXU Gas System that is comprised of distribution pipelines, Main Lines, and Service Lines that are located on the load side of city gates. DWELLING UNIT. A room or rooms suitable for occupancy as a residence containing kitchen and bathroom facilities. GAS DAY. The period beginning at 9:00 a.m. on one calendar day and ending at 9:00 a.m. on the following calendar day. GAS MAINS. Company's distribution pipelines that receive natural gas from city gate stations and transport such natural gas to Service Lines. (6.,„ GAS SERVICE. The transportation and provision of natural gas made available by Company at the Point of Delivery. • -8- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 4 Definitions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 OF 3 INDUSTRIAL CUSTOMER. A customer who has a North American Industry Classification System Code beginning with 21, 22 (electric generation only), 31, 32, or 33. LOCAL DISTRIBUTION COMPANY. An entity that operates a retail gas distribution system other than TXU Gas Company. MAKE-UP VOLUMES. The quantity of gas specifically and separately nominated by customer and confirmed by Company to resolve, either in whole or in part, any imbalance under Rate CGS, Rate PT, or Rate T. MAIN LINE. A distribution line that serves as a common source of supply for more than one Service Line. METER. A device, or devices, together with any required auxiliary equipment, for measuring Gas Service. NETWORK TRANSMISSION. Lines that connect the Bulk Transmission pipeline, pipelines from other sources of gas supply, and other transmission pipelines, and smaller lower pressure lines that integrate Bulk Transmission and storage into a delivery network. NORMAL SOIL. Soil that can be excavated with a trenching machine and that does not require the use of special rock wheels or buckets. (lhoe PIPELINE SYSTEM. That portion of the TXU Gas System that provides Bulk Transmission, and Network Transmission. The Pipeline System is upstream from city gates and feeds into the Distribution System. POINT OF DELIVERY. Point at which natural gas leaves the Company's facilities. At Company's option, locations where the gas installation has multiple connections to Company's facilities may be considered one point of delivery for billing purposes. RATE SCHEDULE. A statement of the.method of determining charges for Gas Service, including the • conditions under which such method applies. RECEIPT NOMINATION. The daily quantity of gas requested by a shipper to be delivered into the Pipeline System by the shipper as specified in the associated Transportation Agreement between the shipper and TXU Gas Company. REGULATORY AUTHORITY. An incorporated city or town, or an agency of the county, state, or federal government. RESIDENTIAL CUSTOMER. Unless otherwise specified in the rate schedule, a customer whose service is separately and individually metered in an individual private Dwelling Unit or in an individually metered apartment and who uses natural gas primarily for Residential End Uses and occupies the building. RESIDENTIAL END USES. Heating, space heating, cooking, water heating, and other similar type uses in a building or dwelling. RESIDENTIAL SALES SERVICE. Gas service provided to any customer whose service is separately and individually metered and who uses natural gas primarily for Residential End Uses and occupies the building. C -9- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 4 Definitions (hire APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 OF 3 SERVICE LINE. A distribution line that transports gas from a common source of supply to a customer's meter. A distribution line that extends onto private property; serves no more than two adjacent, private, single-family residences separated by a property line; and terminates at a customer's meter is considered a Service Line. STATE AGENCY. (A) a department, commission, board, office, or other agency that: (i) is in the executive branch of state government; (ii) has authority that is not limited to a geographical portion of the state; and (iii) was created by the Texas Constitution or a statute of this state; (B) a university system or institution of higher education as defined by Section 61.003, Education Code, other than a public junior college; or (C) a river authority created under the Texas Constitution or a statute of this state. TEMPORARY GAS SERVICE. Gas Service provided to Customer for a single, continuous period of time, which is less than twelve consecutive months, except that Gas Service provided during construction activities, even though provided for a continuous period of time in excess of twelve months, is considered to be Temporary Gas Service. TRANSPORTATION SERVICE CUSTOMER. Customers who procure their own gas supplies and for whom the Company provides delivery service on the TXU Gas System. UTILIZATION CONTRACT. A contract by which the Customer estimates and communicates to Company the amount of gas usage required for the Company's extension. If such usage materializes and is verified within a specified period of time, Company will reimburse Customer all or a portion of the installation costs as outlined in the contract. • • -10- (00' IV. GAS SERVICE RATES C TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: Gas Service Rates APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 IV. GAS SERVICE RATES: C C -11- TARIFF FOR GAS SERVICE TXU GAS COMPANY (bre , RATE SCHEDULE: 5 Rate CGS- City Gate Service APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 3 RATE CGS - CITY GATE SERVICE Application Applicable, in the event that Company has entered into a Transportation Agreement- City Gate Service, to a Local Distribution Company(Customer) directly connected to the TXU Gas System for the transportation of all natural gas supplied by Customer to one Point of Delivery. Type of Service Where service of the quantity and type required by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following meter, capacity, and MMBtu charges to the amounts and quantities due under the riders listed below: (hir Charge Amount Bulk Transmission Network Transmission Distribution System Meter $200.00 per meter $200.00 per meter $200.00 per meter Capacity $ 0.2710 per MDU $ 1.0405 MDU $ 1.0405 per MDU All MMBtu $ 0.0795 per MMBtu $ 0.2182 per MMBtu $ 0.7553 per MMBtu Capital Investment Adjustment Factor: Plus an amount for capital improvements calculated in accordance with Rider CIAF. Retention Adjustment: Plus a quantity of gas as calculated in accordance with Rider RA. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). MDU Determination MDU is the maximum daily usage of natural gas delivered in MMBtu to a Point of Delivery. MDU for the calculation of the monthly bill is the highest of: 1) Current month MDU; 2) Maximum Daily Quantity as specified in the associated Transportation Agreement- City Gate Service; or (pi 3) Highest annual MDU occurring in the 12-month period ended with current month. -12- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 5 Rate CGS-City Gate Service APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 OF 3 Imbalance Fees All fees charged to Customer under this Rate Schedule will be charged based on the quantities determined under the applicable Transportation Agreement and quantities will not be aggregated for any Customer with multiple Transportation Agreements for the purposes of such fees. Monthly Imbalance Fees Customer shall pay Company the greater of (i) $0.10 per MMBtu, or(ii) 150%of the difference per MMBtu between the highest and lowest"midpoint" price for the Katy point listed in Platts Gas Daily in the table entitled"Daily Price Survey"during such month, for the MMBtu of Customer's monthly Cumulative Imbalance, as defined in the applicable Transportation Agreement, at the end of each month that exceeds 10%of Customer's receipt quantities for the month. Daily Imbalance Fees Company may, upon prior written notice, begin billing Customer for Excess Daily Imbalance Quantities during each month. "Excess Daily Imbalance Quantities" means the portion of Customer's daily imbalance that exceeds 10%of Customer's receipt quantities for such Gas Day. Customer shall pay Company for each MMBtu of any Excess Daily Imbalance Quantities incurred during a month at the greater of: (i) $0.10 per MMBtu, or(ii) 150%of the difference between the highest and the lowest "midpoint" price for the Katy point listed in Platts Gas Daily in the table entitled"Daily Price Survey"during such month. Hourly Imbalance Fees For a Customer whose maximum daily quantity established in the applicable Transportation Agreement is 10,000 MMBtu or greater, Company will bill such Customer each month for Excess Hourly Imbalance Quantities. "Excess Hourly Imbalance Quantities" means that portion of the difference between the quantity delivered to Customer during any hour, and the average hourly confirmed Receipt Nomination for such Gas Day, which exceeds 10%of such average confirmed Receipt Nomination. Customer shall pay Company for each MMBtu of any Excess Hourly Imbalance Quantities incurred during a month a fee of $0.50 per MMBtu. Operational Flow Order Imbalance Fee In the event Company has notified Customer that an Operational Flow Order(OFO) is in place, Customer shall pay Company a fee on Excess Hourly OFO Imbalance Quantities during any Operational Flow Order event. "Excess Hourly OFO Imbalance Quantities" means: (a) In the event Company notifies Customer that receipt point quantities should be equal to or greater than delivery point quantities, Excess Hourly OFO Imbalance Quantities is that portion of the positive difference between (i)the quantities delivered to Customer during any hour, less (ii) the average hourly confirmed Receipt Nomination for such Gas Day,which exceeds 10%of such confirmed Receipt Nomination; or (b) In the event Company notifies Customer that receipt point quantities should be less than or equal to delivery point quantities, Excess Hourly OFO Imbalance Quantities is that portion of the positive difference between (i)the average hourly confirmed Receipt Nomination for the applicable Gas Day, less (ii) the quantities delivered to Customer during any hour of such Gas Day, which exceeds 10%of such Receipt Nomination. -13- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 5 Rate CGS- City Gate Service APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 OF 3 Customer shall pay Company for each MMBtu of any Excess Hourly OFO Imbalance Quantities incurred during a month at 150%of the highest"common" price for the Katy point listed in Platts Gas Daily in the table entitled "Daily Price Survey" during the time the Operational Flow Order is in place. Curtailment Overpull Fee Upon notification by Company of an event of curtailment or interruption of Customer's deliveries, Customer will, for each MMBtu delivered in excess of the stated level of curtailment or interruption, pay Company 200%of the midpoint price for the Katy point listed in Platts Gas Daily published for the applicable Gas Day in the table entitled "Daily Price Survey." Replacement Index In the event the"midpoint"or"common" price for the Katy point listed in Platts Gas Daily in the table entitled"Daily Price Survey" is no longer published, Company will calculate the applicable imbalance fees utilizing a daily price index recognized as authoritative by the natural gas industry and most closely approximating the applicable index. Agreement A Transportation Agreement-City Gate Service is required. A standard Transportation Agreement- City Gate Service is found in Section VII of the Tariff for Gas Service. Notice Service hereunder and the rates for service provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. Special Conditions In order to receive service under Rate CGS, Customer must have the type of meter required by Company. Customer must pay Company all costs associated with the acquisition and installation of the meter. C -14- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 6 Rate PT- Pipeline Transportation APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 3 RATE PT - PIPELINE TRANSPORTATION Application Applicable, in the event that Company has entered into a Transportation Agreement -Pipeline,to a customer directly connected to the TXU Pipeline System (Customer) for the transportation of all natural gas supplied by Customer or Customer's agent at one Point of Delivery. Not applicable for service to City Gate Service customers. Type of Service Where service of the quantity and type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following meter, capacity, and MMBtu charges to the amounts and quantities due under the riders listed below: Charge Amount Bulk Transmission Network Transmission Meter $200.00 per Meter $200.00 per Meter Capacity $ 0.3910 per MDU $ 0.9160 per MDU First 12 MMBtu per Billing MDU $ 0.0770 per MMBtu $ 0.1038 per MMBtu All Additional MMBtu $ 0.0700 per MMBtu $ 0.0800 per MMBtu Capital Investment Adjustment Factor: Plus an amount for capital improvements calculated in accordance with Rider CIAF. Retention Adjustment: Plus a quantity of gas as calculated in accordance with Rider RA. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF, if applicable. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). C -15- TARIFF FOR GAS SERVICE TXU GAS COMPANY I RATE SCHEDULE: 6 [Rate PT- Pipeline Transportation APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 OF 3 MDU Determination MDU is the maximum daily usage of natural gas delivered in MMBtu to a Point of Delivery. MDU for the calculation of the monthly bill is the highest of: 1) Current month MDU; 2) 75%of Maximum Daily Quantity as specified in the associated Transportation Agreement - Pipeline; or 3) 75%of highest MDU occurring in the most recent months of December, January, February, and March. Imbalance Fees All fees charged to Customer under this Rate Schedule will be charged based on the quantities determined under the applicable Transportation Agreement and quantities will not be aggregated for any Customer with multiple Transportation Agreements for the purposes of such fees. Monthly Imbalance Fees Customer shall pay Company the greater of (i) $0.10 per MMBtu, or(ii) 150%of the difference per MMBtu between the highest and lowest"midpoint"price for the Katy point listed in Platts Gas Daily in the table entitled"Daily Price Survey"during such month, for the MMBtu of Customer's monthly Cumulative Imbalance, as defined in the applicable Transportation Agreement, at the end of each month that exceeds 10% of Customer's receipt quantities for the month. Daily Imbalance Fees Company may, upon prior written notice, begin billing Customer for Excess Daily Imbalance Quantities during each month. "Excess Daily Imbalance Quantities" means the portion of Customer's daily imbalance that exceeds 10%of Customer's receipt quantities for such Gas Day. Customer shall pay Company for each MMBtu of any Excess Daily Imbalance Quantities incurred during a month at the greater of: (i) $0.10 per MMBtu, or(ii) 150%of the difference between the highest and the lowest "midpoint"price for the Katy point listed in Platts Gas Daily in the table entitled "Daily Price Survey"during such month. Hourly Imbalance Fees For a Customer whose maximum daily quantity established in the applicable Transportation Agreement is 10,000 MMBtu or greater, Company will bill such Customer each month for Excess Hourly Imbalance Quantities. "Excess Hourly Imbalance Quantities" means that portion of the difference between the quantity delivered to Customer during any hour, and the average hourly confirmed Receipt Nomination for such Gas Day, which exceeds 10%of such average confirmed Receipt Nomination. Customer shall pay Company for each MMBtu of any Excess Hourly Imbalance Quantities incurred during a month a fee of $0.50 per MMBtu. Operational Flow Order Imbalance Fee In the event Company has notified Customer that an Operational Flow Order(OFO) is in place, Customer shall pay Company a fee on Excess Hourly OFO Imbalance Quantities during any Operational Flow Order event. "Excess Hourly OFO Imbalance Quantities" means: -16- TARIFF FOR GAS SERVICE TXU GAS COMPANY (111, RATE SCHEDULE: 6 Rate PT- Pipeline Transportation APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 OF 3 (a) In the event Company notifies Customer that receipt point quantities should be equal to or greater than delivery point quantities, Excess Hourly OFO Imbalance Quantities is that portion of the positive difference between (i) the quantities delivered to Customer during any hour, less (ii) the average hourly confirmed Receipt Nomination for such Gas Day, which exceeds 10%of such confirmed Receipt Nomination; or (b) In the event Company notifies Customer that receipt point quantities should be less than or equal to delivery point quantities, Excess Hourly OFO Imbalance Quantities is that portion of the positive difference between (i)the average hourly confirmed Receipt Nomination for the applicable Gas Day, less (ii) the quantities delivered to Customer during any hour of such Gas Day, which exceeds 10%of such Receipt Nomination. Customer shall pay Company for each MMBtu of any Excess Hourly OFO Imbalance Quantities incurred during a month at 150%of the highest"common" price for the Katy point listed in Plaits Gas Daily in the table entitled"Daily Price Survey" during the time the Operational Flow Order is in place. Curtailment Overpull Fee Upon notification by Company of an event of curtailment or interruption of Customer's deliveries, (lope Customer will, for each MMBtu delivered in excess of the stated level of curtailment or interruption, pay Company 200%of the midpoint price for the Katy point listed in Platts Gas Daily published for the applicable Gas Day in the table entitled"Daily Price Survey." Replacement Index In the event the"midpoint"or"common" price for the Katy point listed in Platts Gas Daily in the table entitled "Daily Price Survey" is no longer published, Company will calculate the applicable imbalance fees utilizing a daily price index recognized as authoritative by the natural gas industry and most closely approximating the applicable index. Agreement A Transportation Agreement - Pipeline is required. A standard Transportation Agreement - Pipeline is found in Section VII of the Tariff for Gas Service. Notice Service hereunder and the rates for service provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. Special Conditions In order to receive service under Rate PT, Customer must have the type of meter required by Company. Customer must pay Company all costs associated with the acquisition and installation of the meter. C- -17- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 7 Rate R - Residential Sales APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 RATE R - RESIDENTIAL SALES Application Applicable to Residential Customers for all natural gas provided at one Point of Delivery and measured through one meter. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and Mcf charges to the amounts due under the riders listed below: Charge Amount Customer $12.00 per month First 0 Mcf to 3 Mcf $ 1.4533 per Mcf All Additional Mcf $ 1.2032 per Mcf Gas Cost Recovery: Plus an amount for gas costs calculated in accordance with Rider GCR. Capital Investment Adjustment Factor: Plus an amount for capital improvements calculated in accordance with Rider CIAF. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Agreement Service is provided and received pursuant to the terms and conditions in the Company's Tariff for Gas Service. An Agreement for Gas Service may be required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. -18- TARIFF FOR GAS SERVICE TXU GAS COMPANY ,RATE SCHEDULE: 8 Rate C- Commercial Sales APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 RATE C - COMMERCIAL SALES Application Applicable to Commercial Customers for all natural gas provided at one Point of Delivery and measured through one meter and to Industrial Customers with an average annual usage of less than 3,000 Mcf. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following Customer and Mcf charges to the amounts due under the riders listed below: Charge Amount (61, Customer $20.00 per month First 0 Mcf to 30 Mcf $ 1.5327 per Mcf Next 320 Mcf $ 1.2827 per Mcf All Additional Mcf $ 1.0329 per Mcf Gas Cost Recovery: Plus an amount for gas costs calculated in accordance with Rider GCR. Capital Investment Adjustment Factor: Plus an amount for capital improvements calculated in accordance with Rider CIAF. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Agreement Service is provided and received pursuant to the terms and conditions in the Company's Tariff for Gas Service. An Agreement for Gas Service may be required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. -19- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 9 Rate I - Industrial Sales APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 2 RATE I - INDUSTRIAL SALES Application Applicable to Industrial Customers with a maximum daily usage(MDU)of less than 3,500 MMBtu per day for all natural gas provided at one Point of Delivery and measured through one meter. Service for Industrial Customers with an MDU equal to or greater than 3,500 MMBtu per day will be provided at Company's sole option and will require special contract arrangements between Company and Customer. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's monthly bill will be calculated by adding the following meter and MMBtu charges to the amounts due under the riders listed below: Charge Amount Meter $150.00 per month First 0 MMBtu to 1,500 MMBtu $ 0.7879 per MMBtu Next 3,500 MMBtu $ 0.6414 per MMBtu Next 45,000 MMBtu $ 0.4949 per MMBtu All Additional MMBtu $ 0.3485 per MMBtu Gas Cost Recovery: Plus an amount for gas costs calculated in accordance with Rider GCR. Capital Investment Adjustment Factor: Plus an amount for capital improvements calculated in accordance with Rider CIAF. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Curtailment Overpull Fee Upon notification by Company of an event of curtailment or interruption of Customer's deliveries, Customer will,for each MMBtu delivered in excess of the stated level of curtailment or interruption,pay Company 200% of the midpoint price for the Katy point listed in Platts Gas Daily published for the applicable Gas Day in the table entitled"Daily Price Survey." -20- • TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 9 Rate I - Industrial Sales APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 OF 2 Replacement Index In the event the"midpoint"or"common"price for the Katy point listed in Plaits Gas Daily in the table entitled "Daily Price Survey" is no longer published, Company will calculate the applicable imbalance fees utilizing a daily price index recognized as authoritative by the natural gas industry and most closely approximating the applicable index. Agreement Service is provided and received pursuant to the terms and conditions in the Company's Tariff for Gas Service. An Agreement for Gas Service may be required. Notice Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. Special Conditions (60' In order to receive service under Rate I, Customer must have the type of meter required by Company. Customer must pay Company all costs associated with the acquisition and installation of the meter. C -21- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 10 Rate T-Transportation APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 3 RATE T - TRANSPORTATION Application Applicable, in the event that Company has entered into a Transportation Agreement - Distribution, to a customer directly connected to the TXU Distribution System (Customer) for the transportation of all natural gas supplied by Customer or Customer's agent at one Point of Delivery for use in Customer's facility. Type of Service Where service of the type desired by Customer is not already available at the Point of Delivery, additional charges and special contract arrangements between Company and Customer may be required prior to service being furnished. Monthly Rate Customer's bill will be calculated by adding the following meter and MMBtu charges to the amounts and quantities due under the riders listed below: Charge Amount Meter $150.00 per month First 0 MMBtu to 1,500 MMBtu $ 0.7879 per MMBtu Next 3,500 MMBtu $ 0.6414 per MMBtu Next 45,000 MMBtu $ 0.4949 per MMBtu All Additional MMBtu $ 0.3485 per MMBtu Capital Investment Adjustment Factor: Plus an amount for capital improvements calculated in accordance with Rider CIAF. Retention Adjustment: Plus a quantity of gas as calculated in accordance with Rider RA. Franchise Fee Adjustment: Plus an amount for franchise fees calculated in accordance with Rider FF. Tax Adjustment: Plus an amount for tax calculated in accordance with Rider TAX. Surcharges: Plus an amount for surcharges calculated in accordance with the applicable rider(s). Imbalance Fees All fees charged to Customer under this Rate Schedule will be charged based on the quantities determined under the applicable Transportation Agreement and quantities will not be aggregated for any Customer with multiple Transportation Agreements for the purposes of such fees. C -22- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 10 Rate T-Transportation APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 OF 3 Monthly Imbalance Fees Customer shall pay Company the greater of (i) $0.10 per MMBtu, or(ii) 150%of the difference per MMBtu between the highest and lowest"midpoint" price for the Katy point listed in Platts Gas Daily in the table entitled "Daily Price Survey"during such month, for the MMBtu of Customer's monthly Cumulative Imbalance, as defined in the applicable Transportation Agreement, at the end of each month that exceeds 10%of Customer's receipt quantities for the month. Daily Imbalance Fees Company may, upon prior written notice, begin billing Customer for Excess Daily Imbalance Quantities during each month. "Excess Daily Imbalance Quantities" means the portion of Customer's daily imbalance that exceeds 10%of Customer's receipt quantities for such Gas Day. Customer shall pay Company for each MMBtu of any Excess Daily Imbalance Quantities incurred during a month at the greater of: (i) $0.10 per MMBtu, or(ii) 150%of the difference between the highest and the lowest "midpoint" price for the Katy point listed in Plaits Gas Daily in the table entitled "Daily Price Survey" during such month. Hourly Imbalance Fees For a Customer whose maximum daily quantity established in the applicable Transportation Agreement is 10,000 MMBtu or greater, Company will bill such Customer each month for Excess Hourly Imbalance Quantities. "Excess Hourly Imbalance Quantities" means that portion of the difference between the quantity delivered to Customer during any hour, and the average hourly confirmed Receipt Nomination for such Gas Day, which exceeds 10%of such average confirmed Receipt Nomination. Customer shall pay Company for each MMBtu of any Excess Hourly Imbalance Quantities incurred during a month a fee of $0.50 per MMBtu. Operational Flow Order Imbalance Fee In the event Company has notified Customer that an Operational Flow Order(OFO) is in place, Customer shall pay Company a fee on Excess Hourly OFO Imbalance Quantities during any Operational Flow Order event. "Excess Hourly OFO Imbalance Quantities" means: (a) In the event Company notifies Customer that receipt point quantities should be equal to or greater than delivery point quantities, Excess Hourly OFO Imbalance Quantities is that portion of the positive difference between (i)the quantities delivered to Customer during any hour, less (ii) the average hourly confirmed Receipt Nomination for such Gas Day, which exceeds 10%of such confirmed Receipt Nomination; or (b) In the event Company notifies Customer that receipt point quantities should be less than or equal to delivery point quantities, Excess Hourly OFO Imbalance Quantities is that portion of the positive difference between (i)the average hourly confirmed Receipt Nomination for the applicable Gas Day, less (ii)the quantities delivered to Customer during any hour of such Gas Day, which exceeds 10%of such Receipt Nomination. Customer shall pay Company for each MMBtu of any Excess Hourly OFO Imbalance Quantities incurred during a month at 150%of the highest"common"price for the Katy point listed in Platts Gas Daily in the table entitled"Daily Price Survey"during the time the Operational Flow Order is in place. -23- TARIFF FOR GAS SERVICE TXU GAS COMPANY (lhor RATE SCHEDULE: 10 Rate T-Transportation APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 OF 3 Curtailment Overpull Fee Upon notification by Company of an event of curtailment or interruption of Customer's deliveries, Customer will, for each MMBtu delivered in excess of the stated level of curtailment or interruption, pay Company 200% of the midpoint price for the Katy point listed in Platts Gas Daily published for the applicable Gas Day in the table entitled "Daily Price Survey." Replacement Index In the event the"midpoint"or"common" price for the Katy point listed in Plaits Gas Daily in the table entitled"Daily Price Survey" is no longer published, Company will calculate the applicable imbalance fees utilizing a daily price index recognized as authoritative by the natural gas industry and most closely approximating the applicable index. Agreement A Transportation Agreement- Distribution is required. A Transportation Agreement- Distribution is found in Section VII of the Tariff for Gas Service. Notice (kw Service hereunder and the rates for services provided are subject to the orders of regulatory bodies having jurisdiction and to the Company's Tariff for Gas Service. Special Conditions In order to receive service under Rate T, customer must have the type of meter required by Company. Customer must pay Company all costs associated with the acquisition and installation of the meter. • -24- I TARIFF FOR GAS SERVICE TXU GAS COMPANY RIDER: 11 Rider GCR -Gas Cost Recovery APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 RIDER GCR - GAS COST RECOVERY Application Applicable to Rate R, Rate C, and Rate I for all gas sales made by Company. The amount due for gas cost recovery is determined by multiplying the Gas Cost Recovery Factor (GCRF) by the Customer's monthly volume. For Customers receiving service under Rate R and Rate C, monthly volume will be calculated on an Mcf basis. For Customers receiving service under Rate I, monthly volume will be calculated on an MMBtu basis and the quantities will be adjusted as necessary to recover actual costs. Method of Calculation The monthly gas cost adjustment is calculated by the application of a Gas Cost Recovery Factor(GCRF), as determined with the following formula: GCRF = Estimated Gas Cost Factor(EGCF) + Reconciliation Factor(RF) + Taxes (TXS) + Adjustments (ADJ) EGCF = Estimated cost of gas, including lost and unaccounted for gas attributed to residential, commercial, and industrial sales, and any reconciliation balance of unrecovered gas costs, divided Lir by the estimated total residential, commercial, and industrial sales. RF=Calculated by dividing the difference between the Actual Gas Cost Incurred,inclusive of interest, over the preceding twelve-month period ended June 30 and the Actual Gas Cost Billed over that same twelve-month period by the estimated total residential,commercial,and industrial sales for the succeeding October through June billing months. Actual Gas Cost Incurred = The sum of the costs booked in TXU Gas account numbers 800 through 813 and 858 of the NARUC Uniform System of Accounts, including the net impact of injecting and withdrawing gas from storage. Also includes a credit or debit for any out-of-period adjustments or unusual or nonrecurring costs typically considered gas costs and a credit for amounts received under Rate CGS,Rate PT,and Rate T as Imbalance Fees or Curtailment Overpull Fees. Actual Gas Cost Billed = EGCF multiplied by the monthly volumes billed to customers receiving service under Rate R, Rate C, and Rate I. TXS=Any statutorily imposed assessments or taxes applicable to the purchase of gas divided by the estimated total residential, commercial, and industrial sales. ADJ=Any surcharge or refund ordered by a regulatory authority, inclusive of interest,divided by the estimated total residential, commercial, and industrial sales. Any differences between the amount actually collected under Rider GCR and the amount of Rider GCR plus interest on the remaining monthly total balance will be maintained in the reconciliation balance and included in the EGCF in the calculation of the succeeding Rider GCR amount. -25- TARIFF FOR GAS SERVICE TXU GAS COMPANY RIDER: 12 Rider FF- Franchise Fee Adjustment APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 RIDER FF - FRANCHISE FEE ADJUSTMENT Application Applicable to Customers inside the corporate limits of an incorporated municipality that imposes a municipal franchise fee upon Company for the Gas Service provided to Customer. Monthly Adjustment Company will adjust Customer's bill each month in an amount equal to the municipal franchise fees payable for the Gas Service provided to Customer by Company. Municipal franchise fees are determined by each municipality's franchise ordinance. Each municipality's franchise ordinance will specify the percentage and applicability of franchise fees. From time to time, Company will make further adjustments to Customer's bill to account for any over-or under-recovery of municipal franchise fees by Company. C C -26- TARIFF FOR GAS SERVICE TXU GAS COMPANY (larr RIDER: 13 Rider SUR -Surcharges APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 RIDER SUR - SURCHARGES Application Applicable to customer classes as authorized by the state or any governmental entity, a municipality, or a regulatory authority pursuant to any statute, ordinance, order, rule, contract, or agreement. Monthly Calculation Surcharges will be calculated in accordance with the applicable statute, ordinance, order, rule, contract, or agreement. C C -27- V. MISCELLANEOUS SERVICE RATES TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: Miscellaneous Service Rates (leir APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 V. MISCELLANEOUS SERVICE RATES: • L -28- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 14 Rate ANS-Ancillary Services Lie APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: — PAGE: 1 OF 2 RATE ANS - ANCILLARY SERVICES: Application Applicable, in the event Company has entered into an agreement for one or more ancillary services, to shippers, operators, gas marketers, and other similar customers utilizing Company services and facilities to (1) transport third-party gas to points of delivery for ultimate delivery to customers that are not located on the Company's system or(2) supplement or enhance the ability of such parties to engage in pipeline transactions. Fees for such services are determined by individual contract. These services are provided at the sole discretion of Company. Ancillary Services Ancillary Services include but are not limited to: OFF Transportation for Off-System Customers Transportation service for marketers, producers, suppliers, and other similar customers who wish to have their gas supplies transported from a point of interconnection with the TXU Gas Pipeline System to another point of interconnection with the TXU Gas Pipeline System for gas supplies Cleaving the TXU Gas Pipeline System. Not applicable in conjunction with service provided under Rate PT or Rate T. CMP Compression Charged to operators or shippers for compression services utilized to enhance the deliverability of gas into the TXU Gas System. PAR Parking Utilized to compensate Company for holding gas volumes for an agreed upon length of time. Parking and unparking must occur at the same agreed upon interconnect point. LND Lending Utilized to compensate Company for allowing customer to take gas volumes and return an equal quantity of gas to Company at a later date. Lending and return of lent volumes must occur at the same agreed upon interconnect point. STO Storage Storage is available on an interruptible basis through an open season bid process. Bids include demand payment, commodity fee for transportation and injection, commodity fee for withdrawal and transportation, and a retention percentage assessed on quantities received for injection. BLN Blending Charged for accepting gas that does not meet current gas quality specifications, but can be blended with other compliant gas quantities to the extent that pipeline conditions from time to time permit. Blending components consist of BTU, CO2, and/or total inerts. -29- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 14 Rate ANS- Ancillary Services APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 OF 2 POL Pooling Charged for gas delivered from the party's pool for the month in order to facilitate party's aggregation of its gas supply. HUB Hub(Header) For intrastate transportation service involving short distance transportation within a limited geographic area. FCA Facility Construction and/or Operation Installation and/or maintenance of equipment at the point of delivery or receipt by the Company for the provision of new natural gas supplies into the Company's pipeline system or delivered to the applicable Customer through the Company's pipeline system. XCH Exchange The receipt of gas from a customer in exchange for the delivery of gas to the customer, where receipt and delivery of such gas is not complete during the accounting period. Charges Charges applicable to customers are also subject to fees for low volume meter, meter and/or meter measurement, minimum deficiency, swing, and/or capacity enhancement and will be included in the applicable contract. Charges for Ancillary Services not listed above are also determined by individual contract. C -30- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 15 Rate LEP- Line Extension Policy APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 3 RATE LEP - LINE EXTENSION POLICY Application This Line Extension Policy addresses the requirements associated with the extension of Company's system facilities at the request of a Customer in the following situations: (1) Installation of standard distribution facilities; (2) Installation of non-standard distribution facilities; (3) Upgrades of distribution facilities; and (4) Installation of pipeline facilities. Company is responsible for the construction of its system facilities necessary to connect customer Points of Delivery to the Company's system. Payments in the form of a contribution in aid of construction(CIAC)or an advance for construction may be required prior to the commencement of construction from the customer who requested the construction service. For the purpose of this Rate LEP, "Bona-fide Residential Customer" means a single Residential Customer with minimum installed facilities consisting of(1)unsupplemented gas space heating or gas water heating and (2) at least one other gas outlet. Type of Extension Single Residential Main and Service Line Extension Applicable to extension of standard distribution facilities to a single Bona-fide Residential Customer. Company will provide a standard allowance of up to 20 feet of Main Line and 10 feet of Service Line extension in Normal Soil at no cost. If the Main Line or Service Line extension exceeds the standard allowance,the Residential Customer(or the Residential Customer's authorized agent)will be responsible for reimbursing the Company the excess cost prior to construction as a one-time non-refundable CIAC and any related franchise fees. Residential Developer Main Line Extension Applicable to extension of standard distribution facilities to two or more Bona-fide Residential Customers from the same extension. The developer will install the Main Line facilities utilizing a Company-approved Contractor,or paythe Company to install the Main Line facilities. Company will refund the developer's installation cost or an amount equivalent to the Company's cost to install the standard allowance of up to 20 feet of Main Line in Normal Soil, whichever is less, for each Bona-fide Residential Customer requesting and receiving service within three years of the installation date. The Company's cost of installation for refund purposes will be based on the Company-approved contractor's - cost for the actual length of Main Line installed at the time of installation. -31- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 15 Rate LEP- Line Extension Policy APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 OF 3 If the length of the Main Line extension exceeds the standard allowance, then prior to construction, the developer will be responsible for reimbursing Company the excess cost as a one-time non-refundable CIAC together with any related franchise fees. Residential Development Service Line Extension Applicable to extension of service line to a Bona-fide Residential Customer (or Residential Customer's authorized agent) in a residential development. Company will provide a standard allowance of up to 10 feet of Service Line in Normal Soil at no cost to each Bona-fide Residential Customer. If the Service Line extension exceeds the standard allowance, the Customer/builder will be responsible for reimbursing the Company the excess cost prior to construction as a one-time non-refundable CIAC together with any related franchise fees. Commercial Main and Service Line Extension Applicable to extension of standard distribution facilities to a permanent Commercial Customer. Subject to refund for permanent Commercial Customers,Customer will install the Main Line and Service Line facilities utilizing a Company-approved contractor or pay Company to install the Main Line and Service Line facilities. Company will refund to Customer the lesser of Customer's installation cost or an amount not to exceed Company's Standard Allowance as determined by the formula below. All refunds are predicated on Customer's estimated annual Mcf being attained within two years of the installation date.The Standard Allowance is calculated based on the estimated data(e.g.,annual Mcf,MMBtu, equipment installed)supplied by Customer. Prior to any refunds to Customer,Company will conduct a review of the actual annual Mcf to determine the accuracy of the estimated data supplied by the Customer. If at the end of two years after Company has completed the extension of Distribution System facilities,the estimated usage has not materialized, Company will recalculate the Standard Allowance based upon actual data. Refunds, if any, will be based on the recalculation. If Company installs the Distribution System facilities, then the amount of the CIAC for Distribution System facilities will be determined by the formula below. If the amount calculated below is zero or negative, then a non-refundable CIAC is not required for provision of the requested Distribution System facilities and Customer will be eligible for a refund of the entire Standard Allowance. All calculations and component costs used in the determination of the CIAC will be provided to a Commercial Customer upon request. Customer will also be responsible for any franchise fees related to the CIAC. CIAC Amount= Direct Cost—Standard Allowance Direct Cost= Company's current average cost of each component of Distribution System facilities necessary to provide Distribution Service to a Commercial customer, determined by an estimate of • all necessary expenditures, including, but not limited to Main Lines, Service Lines, and rearrangement of the existing Distribution System facilities. The Direct Cost includes the cost of theebove-mentioned facilities that are to be installed, any applicable taxes or fees, and overheads, and may include the costs of facilities necessary to meet future load growth anticipated to develop in the area within two (2) years -32- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 15 Rate LEP- Line Extension Policy (mr' APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 OF 3 Standard Allowance= $5.00 x Annual Mcf Annual Mcf= Company's estimate of Commercial Customer's annual Mcf based on expected usage patterns and equipment data supplied by Commercial Customer. In no event shall Annual Mcf exceed 3,000 Mcf for purposes of determining the Standard Allowance. Industrial Extensions If Company, in its sole discretion, agrees to the requested extension, then Customer will (1) install all facilities required by Company that are necessary to provide service to Customer utilizing a Company- approved contractor, or(2) pay Company to install the necessary facilities. Extension of Pipeline Facilities If Customer wishes to connect directly to the TXU Pipeline System,then, if Company in its sole discretion agrees to the requested connection, Customer will pay all costs associated with the connection as determined by Company. Special Conditions In those areas governed by an existing franchise, nothing in this tariff is intended to supersede a provision of such franchise. If the Company installs facilities, then Customer/developer must provide,without cost to Company, suitable space on Customer's premises for installation of facilities and a cleared right-of-way or easement for the installation of the facilities. If the Main Line or Service Line extension exceeds the allowable footages as outlined in this Rate, or the soil is other than Normal Soil, then Customer/developer will be responsible for additional costs associated with excess footage and/or non-Normal Soil conditions. The additional costs associated with excess footage and non-Normal Soil conditions will be as calculated by Company and will be reviewed periodically and updated accordingly. All extensions are made to minimize the cost of such extension. If facilities in excess of those necessary to serve Customer are installed,then a refund mechanism may be instituted by Company to reimburse Customer for the difference between the cost of the facilities needed to serve Customer's request and those actually installed, provided service in the area meets the estimated usage levels furnished by Customer at the time of installation. A Utilization Contract must be executed by the Customer/developer to be eligible for any refund. L -33- TARIFF FOR GAS SERVICE TXU GAS COMPANY (iipe RATE SCHEDULE: 16 Rate M - Miscellaneous Charges APPLICABLE TO: Entire System REVISION: 0 EFFECTIVE DATE: PAGE: 1 OF 3 RATE M - MISCELLANEOUS CHARGES: Application The service charges listed below are in addition to any other charges made under Company's Tariff for Gas Service and will be applied for the condition described. Other services not covered by these standard conditions will be charged on the basis of an estimate for the job or the Company's cost plus appropriate adders. Applicable Charges: Charge No. Name and Description 1 Connection Charge The following connection charges apply: Schedule Charae business hours $65.00 after hours $97.00 For each reconnection of gas service where service has been discontinued at the same premises for any reason,for the initial inauguration of service, and for each inauguration of service when the billable party has changed, with the following exceptions: (a) For a builder who uses gas temporarily during construction or for display purposes. (b) Whenever gas service has been temporarily interrupted because of System outage or service work done by Company; or (c) . For any reason deemed necessary for Company operations. 2 Field Read of Meter A read for change charge of$19.00 is made when it is necessary for the Company to read the meter at a currently served location because of a change in the billable party. 3 Returned Check Charges A returned check handling charge of $20.00 is made for each check returned to Company for any reason. C -34- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 16 Rate M - Miscellaneous Charges APPLICABLE TO: Entire System REVISION: 0 EFFECTIVE DATE: PAGE: 2 OF 3 Charge No. Name and Description 4 Charge for Installing and Maintaining an Excess Flow Valve A customer may request the installation of an excess flow valve provided that the service line will serve a single residence and operate continuously throughout the year at a pressure of not less than 10 psig. The customer will pay the actual cost incurred to install the excess flow valve. That cost will include the cost of the excess flow valve, the labor cost required to install the excess flow valve, and other associated costs.The estimated total cost to install an excess flow valve is $50.00. This cost is based on installing the excess flow valve at the same time a service line is installed or replaced. The excess flow valve will be installed on the service line upstream of the customer's meter and as near as practical to the main. A customer requiring maintenance, repair, or replacement of an excess flow valve will be required to pay the actual cost of locating and repairing or replacing the excess flow valve. The cost to perform this service will normally range from $200.00 to$2,000.00, depending on the amount of work required. This cost will be determined on an individual project basis. L, This tariff is being filed in accordance with the U.S. Department of Transportation rule requiring the installation of an excess flow valve, if requested by a customer, on new or replaced service lines that operate continuously throughout the year at a pressure of not less than 10 psig and that serve a single residence. The rule further states that the customer will bear all costs of installing and maintaining the excess flow valve. 5 Recovery of Connection Costs Associated with Certain Stand-By Gas Generators . • Commercial customers installing stand-by gas generators to provide service in the event of an interruption in electric service in facilities where gas service is not otherwise provided will reimburse the Company for the actual cost of acquiring and installing the regulator, service line, and meter required to provide gas service for the stand-by generators. Gas service provided for the stand-by generators will be billed at the applicable commercial rate. 6 Charge for Temporary Discontinuance of Service- Residential Whenever service under this rate schedule has been temporarily disconnected at the request of the customer, a charge of$65.00 plus the appropriate Connection Charge will be made to reestablish such service for that customer at the same address. • -35- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 16 Rate M - Miscellaneous Charges APPLICABLE TO: Entire System REVISION: 0 EFFECTIVE DATE: PAGE: 3 OF 3 Charge No. Name and Description 7 Charge for Temporary Discontinuance of Service- Non-Residential Whenever service under this rate schedule has been temporarily disconnected at the request of the customer, a charge of$107.00 plus the appropriate Connection Charge will be made to reestablish such service for that customer at the same address. 8 Charge for Meter Testing The Company shall, upon request of a customer, make a test of the accuracy of the meter serving that customer. The Company shall inform the customer of the time and place of the test and permit the customer or his authorized representative to be present if the customer so desires. If no such test has been performed within the previous four(4)years for the same customer at the same location, the test shall be performed without charge. If such a test has been performed for the same customer at the same location within the previous four(4) years, the Company will charge a fee of$15.00. The customer must be properly informed of the result of any test on a meter that C serves him. 9 Charge for Service Calls A Service Call Charge is made for responding to a service call that is determined to be a customer related problem rather than a Company or Company facilities problem. $26.00 business hours $40.00 after hours 10 Tampering Charge No Company Meters, equipment, or other property, whether on Customer's premises or elsewhere, are to be tampered with or interfered with for any reason. A Tampering Charge is made for unauthorized reconnection or other tampering with Company metering facilities, or a theft of gas service by a person on the customer's premises or evidence by whomsoever at customer's premises. An additional cost for the cost of repairs and/or replacement of damaged facilities and the installation of protective facilities or relocation of meter are made at cost plus appropriate charges as detailed in Company's Service Rules and Regulations. • $125.00 -36- TARIFF FOR GAS SERVICE TXU GAS COMPANY RIDER: 17 Rider CT-Competitive Transportation Service APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 RIDER CT - COMPETITIVE TRANSPORTATION SERVICE Application Applicable at Company's sole discretion to any Customer that otherwise qualifies for service under Rate PT or Rate T and that in Company's sole judgement would not be served by Company but for the pricing provided pursuant to this Rider. Applicable only to Points of Delivery that meet the requirements of the previous paragraph. • Monthly Rate At Company's sole discretion, a discount to the otherwise applicable monthly rate may be offered to any qualifying Customer subject to the special conditions set forth herein. The discounted rate applicable to transportation service under this provision shall be specified in the associated Transportation Agreement. Customer must furnish Company a notarized affidavit and supporting information confirming to the satisfaction of the Company that Customer qualifies for discounted service pursuant to TUC 104.003(b). Agreement A Transportation Agreement is required. C -37- TARIFF FOR GAS SERVICE TXU GAS COMPANY RIDER: 18 Rider CIAF- Capital Investment Adjustment Factor APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 2 RIDER CIAF - CAPITAL INVESTMENT ADJUSTMENT FACTOR Applicability This adjustment is applicable to customers taking service under Rate CGS, Rate PT, Rate R, Rate C, Rate I, and Rate T. The long-term incremental cost of service related to net utility plant invested by Company during the year is added to the stated customer or meter charge in each rate schedule. The long-term incremental costs are collected to cover the costs of capital improvements to repair, replace, and improve Company's natural gas system. This is done by determining a Gas Reliability Infrastructure Program Adjustment as described below. Method of Calculation A Gas Reliability Infrastructure Program Adjustment (GRIPA) is calculated annually in March of each year for each major rate class. The formula for the GRIPA is: Distribution System GRIPA= (API * FCR * CAF)/S • API = Annual change in net utility plant investment from prior year as of December 31. FCR= Monthly Fixed Charge Rate of 1.288%. CAF= Capacity Allocation Factor for the major rate classes from Company's cost allocation study approved in the most recent rate case as follows: Capacity Allocation Distribution Rate Class Rate Schedule Factor(CAF) • Residential Rate R 0.573869 Commercial Rate C 0.292377 Industrial&Transportation Rate I & Rate T 0.133754 S= The number of customers for Rate R and Rate C at the end of the prior year and the number of meters for Rate I and Rate T at the end of the prior year. • Pipeline System GRIPA= (API * FCR *CAF)/S API = Annual change in net utility plant investment from prior year as of December 31. FCR= Monthly Fixed Charge Rate of 1.151%. CAF= Capacity Allocation Factor for the major rate classes from Company's cost allocation study approved in the most recent rate case as follows: -38- TARIFF FOR GAS SERVICE TXU GAS COMPANY RIDER: 18 Rider CIAF- Capital Investment Adjustment Factor APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 OF 2 Capacity Allocation Pipeline Rate Class Rate Schedule Factor(CAF) City Gate Rate CGS 0.804520 Pipeline Transportation Rate PT 0.195480 S= The number of meters for each major rate class at the end of the prior year. Notice Service hereunder is subject to the orders of regulatory bodies having jurisdiction and to Company's Tariff for Gas Service. C C -39- TARIFF FOR GAS SERVICE TXU GAS COMPANY RIDER: 19 Rider RA- Retention Adjustment APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 RIDER RA - RETENTION ADJUSTMENT Application The Retention Adjustment, as determined from time to time, is applicable to Customers taking service under Rate CGS, Rate PT, and Rate T. Monthly Rate Retention percentage for Rate CGS and Rate PT is 1.00% (applied to gas received into TXU Gas Pipeline System). Retention percentage for Rate T is 3.56% (applied to gas received into TXU Gas System). C C -40- TARIFF FOR GAS SERVICE TXU GAS COMPANY (Isie RIDER: 20 Rider TAX-Tax Adjustment APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 RIDER TAX - TAX ADJUSTMENT Application Applicable to Customers taking service under Rate R,Rate C, Rate I, Rate T,Rate CGS,and Rate PT,except for exempt State Agency Customers, to the extent of state gross receipts taxes only. Each monthly bill shall be adjusted for state gross receipts taxes imposed by Sections 182-021 - 182-025 of the Texas Tax Code. • Each monthly bill shall also be adjusted by an amount equivalent to the amount of all applicable taxes and any other governmental impositions, rentals, fees, or charges (except state, county, city, and special district ad valorem taxes and taxes on net income) levied, assessed, or imposed upon or allocated to Company with respect to the Gas Service provided to Customer by Company, and any associated facilities involved in the performance of such Gas Service. Each monthly bill shall also be adjusted by an amount equivalent to the proportionate part of any increase or decrease of any tax and any other governmental imposition, rental,fee, or charge (except state, county,city, and special district ad valorem taxes and taxes on net income) levied, assessed, or imposed subsequent to the effective date of this tariff, upon or allocated to Companys operations, by any new or amended law, ordinance, or contract. C • C -41- �i VI. SERVICE RULES AND REGULATIONS TARIFF FOR GAS SERVICE TXU GAS COMPANY IRATE SCHEDULE: I Service Rules and Regulations I (re APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 VI. SERVICE RULES AND REGULATIONS C C -42- (kre TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 21 Service Rules and Regulations - Forward APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 1. Foreword These Service Rules and Regulations (the "Service Regulations") will govern the supplying of Gas Service by Company. These Service Regulations are effective upon filing with the applicable Regulatory Authority and replace all such regulations, by whatever term designated, which may heretofore have governed the supplying of Company's Gas Service. Unless otherwise specified in an executed Agreement for Gas Service, these Service Regulations are applicable to all Customers who receive Gas Service from Company. In case of conflict between the provisions of an Agreement for Gas Service and these Service Regulations, the provisions of the Agreement for Gas Service will control. These Service Regulations are subject to change, from time to time, by Company and Regulatory Authorities having jurisdiction, and are on file at Company's business offices at 500 N. Akard Street in Dallas, Texas, and with various Regulatory Authorities. These Service Regulations are intended to satisfy the requirements of Commission Substantive Rule 7.45 (Quality of Service), and the content and requirements in Rule 7.45 are expressly incorporated herein. If there is any conflict between these Service Regulations and Rule 7.45, then the provisions of Rule 7.45 will control as to such conflict. C -43- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations - Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: • EFFECTIVE DATE: PAGE: 1 of 10 2. Gas Service A. Availability of Gas Service Customer requests for Gas Service of the character and type provided by Company are granted within the limitations of the applicable Rate Schedule for Gas Service, the availability of Company facilities and capacity, and these Service Regulations. Company may require special contractual arrangements, which may include additional charges, prior to Company's providing Gas Service if the Gas Service requested by Customer is not available at the Point of Delivery, is other than that which Company usually provides, or if the service requested is not adequately compensated for by the applicable Rate Schedule. B. Gas Service to Apartment Houses, Mobile Homes, or Other Multiple-Party Points (1) Apartment House Company will provide Gas Service through an individual Meter to each Dwelling Unit or through one Meter at each Point of Delivery for any number of Dwelling Units in the same Apartment House. Where Gas Service is provided using individual metering for each Dwelling Unit, Customer will group and identify Meters in a manner and at locations suitable to Company. (2) Mobile Homes Company may provide Gas Service through an individual Meter to each space in a mobile home park and Customer will group and identify Meters in a manner and at locations suitable to Company. (3) Other Multiple-Party Points Company may provide Gas Service to a new Customer through gas facilities owned by an existing Customer, with the consent of the existing Customer. In such event, the metered gas usage registered on the existing Customer's Meter will be reduced by an appropriate amount to recognize the usage of the new Customer. Under this method of service, the new Customer, the existing Customer, and Company will complete an agreement setting forth the responsibilities of each party. C. Mains and Service Lines (1) Company's Mains Company will extend its Gas Mains for Customer in accordance with Rate LEP - Line Extension Policy. (2) Service Lines Company will extend its Service Lines for Customer in accordance with Rate LEP - Line Extension Policy. Company will furnish, install, and maintain the Service Lines connecting Company's distribution system to the Meter at the Point of Delivery. Where Customer installs or plans to install obstructions (asphalt or concrete walk, driveway, retaining wall, paved parking lot, etc.) in the path of Company's Service Lines, Company may require Customer to reimburse Company for any additional costs incurred in the installation or relocation of the Service Lines as a result of any such obstruction. -44- (kar TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations - Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 of 10 (3) New Construction (a) Company will construct, install, operate, and maintain its plant, structures, equipment, and lines in accordance with the provisions of such Codes and standards as are generally accepted by the industry, as modified by rule or regulation of the applicable Regulatory Authority, or otherwise by law, and in such manner to best accommodate the public and to prevent interference with service furnished by other public utilities insofar as practical. (b) Company will seek to serve each qualified Applicant for service within its service area as rapidly as practical. As a general policy, those applications not involving line extensions or new facilities will be filled within seven (7) working days, and those applications for individual residential service requiring line extensions will be filled within ninety (90) days, unless unavailability of materials or other causes beyond the control of Company result in unavoidable delays. D. Meters C (1) General (a) Unless otherwise authorized by the applicable Regulatory Authority, Company will provide and install, and will continue to own and maintain, all Meters necessary for the measurement of gas delivered to its Customers. Customer will provide space, without cost to Company, which is suitable for installation of Company's Meter and metering equipment. Company will install, or cause to be installed, communications equipment to allow for the electronic monitoring of metering equipment for each Point of Delivery to an Industrial Customer. Industrial Customers will reimburse Company, within ten days from receipt of Company's invoice, for any such communications or related metering equipment and associated equipment, and all labor and overhead expenses attributable to such equipment. Failure to reimburse Company, as provided herein, will allow Company to suspend Gas Service to the Industrial Customer at the applicable Point of Delivery. No metering equipment may be by-passed for any reason, without prior approval of Company. (b) All gas sold or transported by Company will be charged for by Meter measurements, except where otherwise provided for based upon applicable laws, regulation of the Regulatory Authority, or this Tariff for Gas Service. (c) Company will not furnish, set up, or put in use any Meter that is not reliable and of a standard type that meets generally accepted industry standards; provided, however, special Meters not necessarily conforming to such standard types may be used for investigation, testing, or experimental purposes. (2) Location of Meter Meters and associated equipment will be installed in a location suitable to Company and in such a way that a clear working space is provided on all sides. Meters for Residential Customers are to be located outside the building. Meter locations for nonresidential Customers normally will be outside the building at the property line. Inside locations may be permitted with prior written approval of Company. Additional charges may be required -45- (bar TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations - Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 of 10 for Meters installed inside a building or in a location that does not have a clear working space on all sides. Meters will not be installed: (a) in any hazardous location; (b) in any place where vibration, moisture, fumes, or dust may damage the Meter or interfere with its operation; (c) directly over any stairway, ramp, or steps; (d) at any location that probably at a later date will be enclosed to make the Meter inaccessible; (e) in any location accessible only through a hatchway, trapdoor, or by means of a ladder; or (f) on or recessed in the external surface of any wall that is within three feet of any property line, or that is over the edge of any walk, alley, or drive way, Ce which provides access to commercial or industrial property except with the written consent of Company. Company will assist in determining Meter locations upon request and may waive certain of these requirements for good cause as determined in Company's sole discretion. (3) Relocation of Meter Company may, at its option, relocate any Meter. In case of a relocation made at the request of Customer, or made necessary due to inaccessibility, hazardous location, or dangerous conditions for which Customer is responsible, or in order to prevent a recurrence of unauthorized use of gas or tampering with Company equipment, Customer will be required to pay the cost to relocate the metering equipment to a location agreeable to Company. Under no circumstance may any Meter be moved or relocated except as authorized by Company. (4) Testing of Meter (a) Company will, upon written request of Customer, make a test of the accuracy of the Meter serving Customer. Company will inform Customer of the time and place of the test and permit Customer or Customer's authorized representative to be present if Customer so desires. The Meter may be tested at either Customer's premises or a Company test facility at Company's discretion. Following any such requested test, Customer will be advised of the date of the removal of the Meter, the date of the test, and the result of the test. Customer may be required to pay for the Meter testing in accordance with Rate M - Miscellaneous Charges, Charge for Meter Testing. (iime -46- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations - Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 4 of 10 (b) Notwithstanding Paragraph (a) above, if the Meter is found to be more than nominally defective, to either Customer's or Company's disadvantage, then any fee charged for a Meter test will be refunded to Customer. More than nominally defective means a deviation of more than two percent (2%) from accurate registration. (5) Meter Records Company will keep the following records for all Meters serving Residential or Commercial Customers: (a) A record of all Meters, showing each Customer's address and date of the last test. (b) A record of each Meter test made on request of Customer, showing the identifying number and constants of the Meter, the standard Meter and other measuring devices used, the date and kind of test made, by whom made, the error (or percentage of accuracy) at each load tested, and sufficient data to permit verification of all calculations. (live (6) Meter readings In general, each Meter will indicate clearly the units of service for which a charge is made to Customer. (7) Bill Adjustments Due to Meter Error (a) If any Meter test requested by a Residential or Commercial Customer reveals a Meter to deviate by more than two percent (2%) from accurate registration, then Company will correct previous readings consistent with the inaccuracy found in the Meter for the period of either: (i) the last six (6) months, or (ii) the last test of the Meter, whichever is shorter. Any resulting under billings or over billings will be corrected in subsequent bills, unless service is terminated, in which event a monetary adjustment will be made. This requirement for a correction may be waived by Company if the error is to Company's disadvantage. (b) If a Meter is found not to register for any period of time, then Company may make a charge for units used but not metered for a period not to exceed three (3) months previous to the time the Meter is found not to register. The determination of amounts used but not metered will be based on consumption during other like periods by the same Customer at the same location. If this information is not available, then the determination of amounts used but not metered will be based on consumption under similar conditions at the same (ka., location or of other similarly situated Customers. -47- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations - Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 5 of 10 E. Continuity and Quality of Gas Service (1) Company will make all reasonable efforts to prevent interruptions of service to Residential and Commercial Customers. When residential and/or commercial interruptions occur, Company will re-establish service within the shortest reasonable time consistent with prudent operating principles so that the smallest number of Residential and Commercial Customers is affected. Company will make reasonable provisions to meet emergencies resulting from failure of residential and commercial service and will issue instructions to its employees covering procedures to be followed in the event of an emergency in order to prevent or mitigate interruption or impairment of service to Residential and Commercial Customers. In the event of national emergency or local disaster resulting in disruption of normal service, Company may, in the public interest, interrupt service to other Customers to provide necessary service to civil defense or other emergency service agencies on a temporary basis until normal service to these agencies can be restored. (2) When any Customer is notified by Company to do so, such Customer will curtail, interrupt, reduce, limit, terminate, or discontinue the use of Gas Service in accordance with Company's curtailment program approved by the applicable Regulatory Authority. In the event of any such curtailment, interruption, reduction, limitation, termination, or discontinuation of Gas Service, Company personnel may enter Customer's premises and physically turn off the gas or reduce the quantity of gas serving Customer, and no one other than Company's personnel will thereafter be permitted to increase the quantity of gas or turn the Gas Service back on. Customer will assume any and all risks, including, but not limited to, lost profits, damaged or destroyed facilities, lost or damaged production, damaged or destroyed machinery and/or equipment, and the failure of a facility or equipment of Customer and/or Customer's business due to a curtailment, interruption, reduction, limitation, termination, or discontinuation of Customer's Gas Service in accordance with Company's curtailment program approved by the applicable Regulatory Authority. Customer will indemnify and hold Company harmless from and against any and all damages, costs, losses, and expenses (including reasonable attorneys' fees) that may be sustained by Customer due to any claim, demand, suit, or action brought against Company (whether or not the claim, demand, suit, or action is found to be valid) by any person or entity arising out of, resulting from, or connected, in whole or in part, with, a curtailment, interruption, reduction, limitation, termination, or discontinuation of Gas Service in accordance with Company's curtailment program approved by the applicable Regulatory Authority. (3) Customer will be responsible for installing and maintaining protective devices as are necessary to protect Customer's equipment or processes during irregular or interrupted service, or the failure of part or all of the Gas Service. In those instances where Customer experiences interruptions to all or part of the Gas Service of an undetermined cause and the report of the same to Company prompts a visit to Customer's premises at Customer's request and it is determined that the interruption or irregularity resulted from Customer's facilities, Company may charge Customer an amount based on the cost to Company for such a visit. -48- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations - Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 6 of 10 F. Interruption of Gas Service Company may, without notice and without incurring liability to Customer, interrupt Gas Service to Customer when, in Company's sole judgment, such interruption: (1) will prevent or alleviate an emergency threatening to disrupt the operation of Company's system; (2) will lessen or remove possible danger to life or property; (3) will aid in the restoration of Gas Service; or (4) is required to make necessary repairs to, tests of, or changes in Company's facilities; (5) is authorized elsewhere in this Tariff for Gas Service; (6) is conducted in accordance with Company's curtailment program approved by the applicable Regulatory Authority; or (7) is justified because the applicable Agreement for Gas Service has expired or has been terminated, and Customer has not executed a new Agreement for Gas Service. G. Record of Interruption Except for interruptions that do not cause a major disruption of service, Company will keep a complete record of all interruptions of residential and commercial Gas Service, both emergency and scheduled. Where the interruption lasts more than four(4) hours or affects the entire system, this record will show the cause for interruptions, date, time, duration, location, approximate number of Customers affected, and, in cases of emergency interruptions, the remedy and steps taken to prevent recurrence. H. Report to Regulatory Authority The appropriate Regulatory Authority shall be notified in writing within forty-eight (48) hours of interruptions resulting in total cessation of residential and commercial Gas Service affecting the entire system or any major segment thereof lasting more than four (4) hours. The notice will also state the cause of such interruptions. If any residential or commercial service interruption is reported to the Regulatory Authority for other reasons (for example, as a curtailment report or safety report), such other report will be sufficient to comply with the terms of this paragraph. I. Liability and Responsibility for Damage or Injury and Disclaimer of Warranties (1) Company Liability and Responsibility Company will be responsible for the design, installation, operation, and maintenance of gas facilities up to and including the Point of Delivery. Company will not be responsible for any damage or loss due to the escape of gas from or in Customer's piping,appliances, or equipment. Company may perform voluntary or emergency acts to gas facilities that are the responsibility of Customer but will have no liability for damages or injuries -49- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations - Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 7 of 10 resulting from said acts except to the extent that said damages or injuries are proximately caused by acts or omissions of Company, which are found to be wanton or willful with intent to cause injury. In any claim or cause of action relating to the provision of Gas Service asserted by a Customer or any other person against Company, Company will not be liable for any damages resulting from or growing out of defective piping, appliances, equipment, or other gas facilities belonging to Customer, or the leakage of gas from, or incomplete combustion of gas by, Customer's appliances. Nor will Company be liable for damage or loss caused by interruptions, fluctuations, or stoppage or curtailment in service caused by acts of God, vandalism, strikes, riots, diminutions or failure of supply of gas, or pursuant to order of a governmental agency having jurisdiction over Company or Company's suppliers, or, without limitation by enumeration herein, other events and contingencies that could not in the ordinary course of commercial, prudent management have been reasonably foreseen and prevented by Company. In no event will Company be liable to Customer for any consequential, special, or non-direct damages, including, but not limited to, loss of use of equipment, lost profits, extra expense due to the use of temporary or replacement equipment, loss of business revenue, costs of capital, or any other cost not part of necessary repair to or reasonable replacement of Customer's gas equipment, whether the claim or cause of action is based upon contract,tort, negligence, products liability, or any other theory of recovery. (2) Customer Liability and Responsibility Customer will be responsible for the design, installation, operation, and maintenance of gas facilities on Customer's side of the Point of Delivery. Customer will grant to or secure for Company, at Customer's expense, any rights- of-way on property owned or controlled by Customer, which are necessary to provide Gas Service to Customer. Customer assumes full responsibility for natural gas furnished to Customer at and past the Point of Delivery and will indemnify Company against and hold Company harmless from all claims for damage to property or injury to persons resulting from natural gas or the utilization of natural gas on Customer's property. Customer must protect Company facilities located on Customer's property. Customer will indemnify Company against damage to or loss of Company-owned property located on Customer's premises proximately arising out of, or caused by, the negligence, carelessness, or willful act of Customer, or Customer's servants, agents, employees, household members, or any person or persons upon Customer's premises by authority of Customer's consent or sufferance. In the event Customer suspects a gas leak, Customer must take all appropriate actions to prevent ignition of the escaping gas and immediately notify Company via Company's Emergency Notification number of the suspected gas leak. In addition, Customer should: C -50- (Iw TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations - Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 8 of 10 (a) exit the premises if the odor is inside a building, leave the door open for ventilation, and stay away from the suspected source of the leak if outside; (b) refrain from operating any electrical switch or device as a spark could ignite the gas; and (c) refrain from smoking, striking a match, or causing a spark. (3) Disclaimer of Warranties COMPANY MAKES NO WARRANTIES WHATSOEVER WITH REGARD TO THE PROVISION OF GAS SERVICE AND DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. J. Customer Complaints Upon receipt of a complaint, either by letter or by telephone, from any Residential or Commercial Customer or Regulatory Authority on behalf of a Residential or Commercial Customer, requiring further action, Company will make a suitable investigation and advise the Regulatory Authority and complainant of the results thereof. An initial response acknowledging the receipt of the complaint will be made by the next working day. Company will make a final and complete response within fifteen (15) days from the date notice of the complaint is received, unless additional time is granted within such fifteen (15) day period. All Residential and Commercial Customer complaints should be made in writing to assist in maintaining records on the quality of service of Company; however, telephone communications will be acceptable. Company will keep a record of all Residential and Commercial Customer complaints that will show the name and address of the complainant, the date and nature of the complaint, and the adjustment or disposition thereof for a period of one (1) year subsequent to the final disposition of the complaint. K. Location of Point of Delivery Customer's installation must be arranged so that the location of the Point of Delivery is acceptable to Company, taking into consideration the location of existing Company facilities and construction needed to connect Customer to Company's system. Any change from a Company-designated Point of Delivery is subject to an additional payment by Customer based on any added costs to reach the new designated point. L. Space Requirements Customer must provide, without cost to Company, suitable space on Customer's premises for the installation of facilities necessary to provide Gas Service to Customer and for installation of Company's metering facilities. M. Customer's Gas Installation Customer's Gas Installation for receiving Gas Service is to be installed in accordance with Company's specifications for Gas Service, which are available to Customer at Company's offices located at 500 N. Akard Street in Dallas,Texas. N. Inspection and Approval of Customer's Gas Installation In those locations where an ordinance requires Customer to obtain a certificate of inspection and -51- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations- Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 9 of 10 acceptance or a permit, Company will not provide Gas Service to Customer until Company receives notification of approval of Customer's Gas Installation from the proper authority. Company does not assume any duty of inspecting Customer's Gas Installation and appliances and will not be responsible therefor. Without limiting the foregoing, Company may decline to provide Gas Service to any Customer's Gas Installation that Company considers hazardous or of such character that satisfactory service cannot be given. The providing of Gas Service by Company does not indicate that Company has inspected Customer's Gas Installation and pronounced it safe or adequate. O. Charges for Providing Temporary Gas Service Customer must pay Company prior to Company's providing Temporary Gas Service the Connection Charge as set forth in Rate M - Miscellaneous Charges, plus an amount equal to the estimated cost of removing any necessary facilities, and plus the estimated costs of materials to be used, which are unsalvageable after removal of the installation. P. Installation and Maintenance of Company Facilities (hire Company owns all gas lines and equipment on Company's side of the Point of Delivery and Customer must not tamper or interfere therewith. In addition, Company owns the Meter regardless of its location and Customer must not tamper or interfere therewith. Company may require Customer to install auxiliary metering equipment, furnished by Company, in conjunction with Customer's Gas Installation. Company will install all gas lines and equipment on Company's side of the Point of Delivery, unless Company has entered into a written agreement with another party for the installation of such gas lines and/or equipment. Only personnel authorized by Company may make connections to Company facilities. Q. Protection of Company's Facilities On Customer's Premises Customer must use reasonable diligence to protect Company facilities on Customer's premises and to permit only personnel authorized by Company or by law to have access to such facilities. R. Admittance to Customer's Premises Company shall have access to its property and equipment located upon Customer's premises at all reasonable times for any purposes connected with or in furtherance of its business operations, and may remove such property from Customer's premises. If Customer refuses to give Company access to Company's property and equipment located upon Customer's premises, then Company may discontinue Gas Service until Customer provides to Company such access. Company is under no duty or obligation to inspect, maintain, or repair Customer's Gas Installation or appliances and will not be liable for damages thereto or arising therefrom. S. Dismantling of Company's Facilities Company may, upon discontinuation of Gas Service to Customer, dismantle and remove all pipes, equipment, and other facilities that Company may have installed to provide Gas Service to Customer. Company may, however, in its sole discretion, abandon in place in whole or in part its underground lines and equipment in lieu of removing such facilities. -52- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 22 Service Rules and Regulations - Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 10 of 10 T. Attachments to Company's Facilities Company does not permit any attachments (such as wires, ropes, signs, banners, or radio equipment) to Company facilities by others except when authorized in writing by Company. Company may without notice and without liability remove unauthorized attachments to Company facilities. C C -53- (hw TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 23 Service Rules and Regulations - Obtaining Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 6 3. Obtaining Gas Service A. Application for Gas Service Company has the right to require written application for Gas Service. (1) Reasons for Refusal of Application for Gas Service Company may decline service to an Applicant for whom service is available from previously installed facilities until such Applicant has complied with the state and municipal regulations and approved rules and regulations of Company on file with the applicable Regulatory Authority governing the service applied for or for the following reasons: (a) solely at the discretion of Company, if the Applicant's installation or equipment is known to be hazardous, potentially hazardous, or of such character that satisfactory or accurately metered service cannot be given; (b) if the Applicant is indebted for the same kind of service previously provided, including but not limited to unauthorized usage; however, in the event the indebtedness of the Applicant for service is in dispute, the Applicant will be served upon complying with the applicable deposit requirement; (c) for refusal to make a deposit if Applicant is required to make a deposit under these Service Regulations; (d) for refusal to provide verifiable identification; or (e) for changing Customer identity to avoid or evade payment of a utility bill. Company may require an Applicant to establish that the Applicant is not the same person who owes the debt to Company for service at the address or another address and that said person no longer is an occupant of the premises if one of the following conditions exists: (i) service has been disconnected at the address within the preceding thirty (30) days, or a longer period of time after March 31 and before October 31 of each year, and there is a debt owing to Company for non-payment of service at said address, (ii) a past due bill is owing at said address although service has not yet been terminated, or (iii) service has been terminated at said address because the utility's pipe, Meter, or equipment has been bypassed or tampered with, or has been determined, at the sole discretion of Company, to be inadequate to provide the total service potential of Customer. Company may withhold service to the Applicant at said address until the required (40., information is furnished to Company. If an application for residential or commercial service is made on or after October 31 and before April 1 and more than thirty (30) days after disconnection of service, Company will initiate service unless it obtains substantial -54- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 23 Service Rules and Regulations - Obtaining Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 of 6 evidence that the Applicant is the customer who owes the debt or that the change of Customer identity is being made to avoid or evade the debt. If service is initiated, Company may terminate service at any time it acquires the evidence necessary to refuse service. (2) Applicant's Recourse In the event Company refuses to serve a residential or commercial Applicant under the provisions of these Service Regulations, Company will inform the Applicant of the basis of its refusal and that the Applicant may file a complaint with the applicable Regulatory Authority. (3) Reasons Application for Gas Service Cannot be Refused The following will not constitute sufficient cause for refusal of service to a present Residential or Commercial Customer or an Applicant for residential or commercial service: (a) delinquency in payment for service by a previous occupant of the premises to be served; (b) failure to pay for merchandise or charges for non-utility service purchased from Company; (c) failure to pay a bill to correct previous under billing due to misapplication of rates more than six (6) months prior to the date of application; (d) violation of Company's rules pertaining to operation of nonstandard equipment or unauthorized attachments, which interfere with the service of others unless the Customer has first been notified and been afforded a reasonable opportunity to comply with said rules; (e) failure to pay a bill of another Customer as guarantor thereof unless the guarantee was made in writing to Company as a condition precedent to service; or (f) failure to pay the bill of another Customer at the same address except where the change of Customer identity is made to avoid or evade payment of a utility bill. B. Agreement for Gas Service Customer may be asked to sign an Agreement for Gas Service, which may include additional charges, before Company takes action to provide Gas Service. In some cases Customer may be asked to sign an Agreement for Gas Service after Gas Service has been provided. (1) Default on or Breach of Agreement for Gas Service In case of conflict between the provisions of an Agreement for Gas Service and the Rate Schedule specified in such agreement, the provisions of the Agreement for Gas Service apply. Company may terminate an Agreement for Gas Service for any default or breach by Customer of such Agreement for Gas Service, these Service Regulations, or Company's Rate Schedule specified in such Agreement for Gas Service. -55- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 23 Service Rules and Regulations - Obtaining Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 of 6 Failure of Company to terminate an Agreement for Gas Service at any time after default or breach by Customer of such Agreement for Gas Service or to resort to any other legal remedy or its exercise of any one or more of such remedies will not affect Company's right to resort thereafter to any one or more of such remedies for the same or any future default or breach by Customer. If Customer unjustifiably terminates an Agreement for Gas Service, or Company terminates such Agreement due to a default or breach by Customer, in addition to the amount then due Company, there immediately will become due and payable to Company as liquidated damages, and not as a penalty, a further sum equal to the minimum amount specified in the applicable Rate Schedules or guaranteed in the Agreement for Gas Service for the un-expired term of the Agreement for Gas Service. (2) Length of Agreement for Gas Service An Agreement for Gas Service under any Rate Schedule, except as otherwise therein provided, will be for a term of not less than one year. C. Customer Deposits Company may require an Applicant for Gas Service to provide a deposit or establish credit in a manner that is satisfactory to Company, in Company's sole discretion, but such establishment of credit will not relieve any Customer from complying with rules for prompt payment of bills. (1) Deposit for Residential Applicants A deposit for residential service required under these Service Regulations will not exceed an amount equivalent to one-sixth (1/6th) of the estimated annual billings. If actual use is at least twice the amount of the estimated billings, a new deposit requirement may be calculated and an additional deposit may be required within ten (10) days. If such additional deposit is not made, then Company may disconnect service under the standard disconnection procedure for failure to comply with deposit requirements. (2) Deposits for Temporary or Seasonal Service Company may require a deposit sufficient to reasonably protect it against the assumed risk of temporary or seasonal service and for weekend or seasonal residences, provided such a policy is applied in a uniform and nondiscriminatory manner. (3) Deposits for Commercial and Industrial Applicants Company may require a deposit from commercial and industrial Applicants sufficient to reasonably protect Company, but such deposit will not exceed the sum of Customer's estimated highest two (2) months billing. If additional gas equipment is installed, a new deposit requirement may be calculated and an additional deposit may be required. (4) Residential Exemption A residential Applicant will not be required to make a deposit if: (a) the residential Applicant has been a Customer of any utility for the same (kope kind of service within the last two (2) years, is not delinquent in payment of any such utility service account, during the last twelve (12) consecutive months of -56- (10. TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 23 Service Rules and Regulations - Obtaining Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 4 of 6 service, did not have more than one occasion in which a bill for utility service was paid after becoming delinquent, and never had service disconnected for nonpayment; or (b) the residential Applicant furnishes in writing a satisfactory credit reference from another utility; or (c) the residential Applicant furnishes a satisfactory credit rating by a national credit reporting agency, a surety bond from an institution approved by Company, or a satisfactory irrevocable letter of credit issued by a bank acceptable to Company; or (d) the Applicant is sixty-five (65) years of age or older and such Applicant has not had a delinquent account balance with Company within the last two (2) years. Company may require that an Applicant for residential service who claims a deposit exemption under this part provide to Company proof of age. (5) Commercial or Industrial Exemption A commercial or industrial Applicant will not be required to make a cash deposit if: (a) the Applicant is an existing Customer of Company with an account of similar usage, is not delinquent in payment on the existing account, during the last twelve (12) consecutive months of service did not have more than one occasion in which a bill for utility service was paid after becoming delinquent, and never had the existing service disconnected for nonpayment; or (b) the Applicant has been a Customer of any utility for the same class of service with a similar load within the last two (2) years, is not delinquent in payment of any such utility service account, during the last twelve (12) consecutive months of service did not have more than one occasion in which a bill for utility service was paid after becoming delinquent, and never had service disconnected for nonpayment; or (c) the Applicant furnishes a satisfactory credit rating by a national credit reporting agency, a surety bond from an institution approved by Company, or a satisfactory irrevocable letter of credit issued by a bank acceptable to Company. (6) Re-establishment of Credit Every Applicant who has previously been a Customer of Company and whose service has been discontinued for nonpayment of bills, before service is re-established, must pay all delinquent amounts due Company, a connect charge, and a deposit as required by these Service Regulations, or execute a written deferred payment agreement, if offered by Company, and must re-establish credit as provided in these Service Regulations. In case of discontinuance of service for nonpayment of bills or any violation of or non- compliance with any rule or regulation of Company, Customer must pay Company a reconnect charge in advance for re-establishing Gas Service on Customer's premises. C -57- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 23 Service Rules and Regulations - Obt ining Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 5 of 6 (7) Interest on Deposits Company will pay a minimum interest on any deposits required to be made by its Residential or Commercial Customers according to the rate as established by the Commission for interest on deposits. If a refund of a deposit is made within thirty (30) days of receipt of the deposit, then no interest will be paid to the applicable Customer. If Company retains a deposit more than thirty (30) days, payment of interest will be made retroactive to the date of deposit. (a) Payment of the interest to Customer will be made at the time the deposit is returned or credited to Customer's account. (b) A deposit will cease to draw interest on the date it is returned or credited to Customer's account. (8) Historical Information on Deposits (a) Company will keep records to show: (5.,` (i) the name and address of each depositor; (ii) the amount and date of the deposit; and (iii) each transaction concerning the deposit. (b) A record of each unclaimed residential or commercial deposit will be maintained for four(4) years, during which time Company will make a reasonable effort to return the deposit, consistent with these Service Regulations, forwarding it to the most recent address provided by Customer. (9) Refund of Deposits (a) If service is not connected after a deposit is made by an Applicant, Company will promptly and automatically refund the Applicant's deposit plus accrued interest on the balance, if applicable. Upon discontinuance of service at the request of Customer or otherwise, Company will deduct from the amount owing to Company Customer's deposit, if any, plus accrued interest and issue a final bill to Customer. The transfer of service from one premise to another within the service area of Company will not be deemed a disconnection within the meaning of these Service Regulations, and no additional deposit will be demanded unless permitted by these Service Regulations. (b) When Customer has paid bills for service for twelve (12) consecutive residential billings without having service disconnected for nonpayment of bills and without having more than two occasions in which a bill was delinquent, and when the Residential Customer is not delinquent in the payment of the current bills, Company will promptly and automatically refund the deposit plus accrued interest to the Residential Customer in the form of cash or credit to the Residential Customer's bill. -58- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 23 Service Rules and Regulations - Obtaining Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 6 of 6 (10) Upon Sale or Transfer of Company Upon the sale or transfer of Company or an operating unit of Company, Company will file with the Regulatory Authority under oath, in addition to other information, a list showing the names and addresses of all Residential and Commercial Customers served by Company, or the operating unit sold or transferred, who have a deposit, the date such deposit was made, the amount of the deposit, and the unpaid interest on the deposit. (11) Complaint by Applicant or Customer Company will direct its personnel engaged in initial contact with a residential or commercial Applicant for service or Residential or Commercial Customer seeking to establish or re-establish credit under the provisions of these Service Regulations to inform the Residential or Commercial Applicant or Customer, if dissatisfaction is expressed with Company's decision, of the Applicant's or Customer's right to file a complaint with the applicable Regulatory Authority. C C -59- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 24 Service Rules and Regulations - Use of Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE:• EFFECTIVE DATE: PAGE: 1 of 2 4. Use of Gas Service A. Limitations On Use of Gas Service (1) Resale of Company's Gas Service Customer may not use Gas Service provided by Company except for the purposes specified in the Rate Schedule under which Customer receives Gas Service. Customer may not resell or otherwise dispose of Gas Service unless as provided by statute or as specifically provided for in the Rate Schedule or Agreement for Gas Service. (2) Intrastate Gas Service Limitations Company will not provide Gas Service to Customer where any part of Customer's Gas Installation is located outside the State of Texas or is connected directly or indirectly to any other gas lines, all or part of which are located outside the State of Texas. (3) Parallel Operation Customer may not connect its lines to another source of natural gas in a manner that may permit natural gas to flow into Company's system from such source without written consent of Company. (4) Extension of Customer's Installation Customer may not extend Customer's installation across or under a public street or alley, or other lands not owned or leased by Customer without the written consent of Company. B. Tampering With Company's Meters, Equipment, or Other Property No Company Meters, equipment, or other property, whether on Customer's premises or elsewhere, shall be tampered with or interfered with for any reason. Company is not liable for injury to Customer, Customer's employees, the general public, or others resulting from tampering with or attempting to repair or maintain any of Company's facilities, and Customer will indemnify and hold Company harmless therefrom. C. Unauthorized Use of Gas Service In the event of use, or evidence of attempted use, of Companys Gas Service, without Company's authorization, whether by tampering with Company's Meter or equipment or by any other means, Gas Service may be discontinued by Company. Customer will pay the charge for restoring service as provided in Company's Rate Schedules under which Customer receives Gas Service and Customer will be required to pay all charges, including the following, before service is resumed: (1) Charges for Unauthorized Use of Gas Service (a) Company will charge Customer for the estimated amount of gas used without Company authorization, which may be estimated based on amounts used under similar conditions during preceding years. Where no previous usage history exists or is considered unreliable, consumption may be estimated on the basis of usage levels of similar Customers under similar conditions. (b) In addition, where unauthorized use of Gas Service has occurred, -60- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 24 Service Rules and Regulations - Use of Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 of 2 Company may charge Customer the cost of replacement or repair of any damaged Meter or associated equipment, and the cost of installing protective facilities or of relocation of any Meter, if determined necessary by Company. (2) Discontinuance of Gas Service If Gas Service is restored by persons other than authorized Company personnel after being discontinued by Company, Company may discontinue Gas Service and dismantle • and remove all lines, equipment, or other facilities that Company installed to provide Gas Service to Customer. Company may, however, in its sole discretion, abandon in place, in whole or in part, its underground lines and equipment in lieu of removing such facilities. (3) Restoration of Gas Service If it is shown to the satisfaction of Company that Customer had no connection with or knowledge of unauthorized use, Gas Service will be restored after the condition causing or permitting the unauthorized use of Gas Service is corrected. Notwithstanding Customer's lack of knowledge of unauthorized use, Company may charge Customer for the estimated amount of unauthorized Gas Service used. C C -61- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 25 Service Rules and Regulations - Charges for Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 5 5. Charges for Gas Service A. Rate Schedules For Gas Service Company has available at each of its business offices Company's Rate Schedules for Gas Service, and will provide Customer, at Customer's request and at reproduction costs, a copy of the Rate Schedule under which Customer is billed. Customer is solely responsible for selecting the applicable Rate Schedule most favorable to Customer. (1) Selection of Rate Schedule Company, at Customer's request, will assist in selecting the Rate Schedule best adapted to existing or anticipated Gas Service requirements as defined by Customer, but Customer is solely responsible for the choice between two or more applicable Rate Schedules. Customer, having selected a Rate Schedule under an Agreement for Gas Service, may not change to another Rate Schedule during the applicable contract term without Company's consent. Where Customer is receiving Gas Service from Company without an Agreement for Gas Service, Customer may not, without the consent of Company, receive Gas Service under a different Rate Schedule for at least one year from the commencement of Gas Service. Where a written Agreement for Gas Service is in effect between Company and Customer and Customer elects to change to another Rate Schedule that is applicable to Customer's class of service, and Company consents to such change, billing and Gas Service will continue under the Rate Schedule in effect until the Agreement for Gas Service on the new Rate Schedule has been properly executed by both Customer and Company, and Company consents to such change. (2) Changes in Customer's Operation Company may not know of changes that occur in Customer's operating conditions or gas requirements. Therefore, Company does not assume responsibility that Customer receives Gas Service under the most favorable Rate Schedule. After Customer selects a Rate Schedule, if a change occurs that would make Customer eligible for a more favorable Rate Schedule, it is Customer's responsibility to notify Company in writing of such change. Company is not required to bill, or provide Gas Service to, Customer under the more favorable Rate Schedule until a written Agreement for Gas Service is in effect between Customer and Company specifying the new Rate Schedule and Company consents to such change. When Customer selects a Rate Schedule, or changes installation to be eligible for selection of a new Rate Schedule, and Company consents to such change, Company is not required to make any refunds covering the difference between the charges under the Rate Schedule in effect and those under any other Rate Schedule that would be applicable to the service. B. Billing Notwithstanding any provisions in the Rate Schedules to the contrary, all bills rendered to "State Agencies," as that term is defined in Chapter 2251 of the Texas Government Code, will be due and will bear interest if overdue as provided in Chapter 2251 of the Texas Government Code. The due date of all other bills for Gas Service will not be less than fifteen (15) days after issuance L or such other period of time as may be provided by order of the Regulatory Authority or agreed to by Customer and Company. A bill for utility service is delinquent if unpaid by the due date. -62- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 25 Service Rules and Regulations - Charges for Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 of 5 Company may, but is not required to, offer an inducement for prompt payment of Residential or Commercial Customer bills by allowing a discount in the amount of five percent (5%) for payment of bills within ten (10) days after their issuance. This provision will not apply where it conflicts with existing orders or ordinances of the appropriate Regulatory Authority. (1) Billing Period Bills for Gas Service will be rendered monthly, unless otherwise authorized or unless service is rendered for a period less than a month. Bills will be rendered as promptly as reasonable following the reading of Meters. Bills may be prorated for any partial months based upon the actual number of days during which Gas Service was received in relation to the number of days in the billing cycle. (2) Bill Format A Residential or Commercial Customer's bill will show all of the following information: (a) if the Meter is read by Company or its agent, the date and reading of the Meter at the beginning and end of the period for which the bill is rendered; (hre (b) the number and kind of units billed; (c) the applicable Rate Schedule title or code; (d) the total base bill; (e) the total of any adjustments to the base bill and the amount of adjustments per billing unit; (f) the date by which Customer must pay the bill to get a prompt payment discount, if applicable; (g) the total amount due before and after any discount for prompt payment, if applicable, within a designated period; and (h) a distinct marking to identify an estimated bill. The above information will be arranged and displayed in such a manner as to allow the Residential or Commercial Customer to compute Customer's bill in accordance with the applicable Rate Schedule. (3) Estimates Bills may be estimated provided that an actual Meter reading is taken at least every six (6) months. If the Meter reader is unable to gain access to the premises to read the Meter on regular Meter reading trips, Company may request that Customer read the Meter and provide the Meter reading to Company. If the Meter reading is not received by Company in time for billing, Company may estimate the Meter reading and render the bill accordingly. (ibe (4) Residential Alternate Payment Plans -63- • TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 25 Service Rules and Regulations - Charges for Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 of 5 Company may, but is not required to, offer a deferred payment plan for delinquent accounts, and a level or average payment plan to all Residential Customers. If Company offers any alternate payment plan, Company will consider the following: (a) the size of the delinquent account; (b) Customer's ability to pay; (c) Customer's payment history; (d) the time that the debt has been outstanding; (e) reasons why the debt has been outstanding; and (f) any other relevant factors concerning the circumstances of Customer. Company will not refuse Customer participation in any payment plan offered by Company on the basis of race, color, creed, sex, marital status, age, or any other form of discrimination prohibited by law. (a) Delayed Payment of Bills by Elderly Persons (i) On request of a person who is 60 years of age or older, who is a Residential Customer, and who occupies the entire premises for which a delay is requested, Company will delay, without penalty, the payment date of a bill for providing Gas Service to that person until the 25th day after the date on which the bill is issued. The requested delay may be for either the most recent bill or for the most recent bill and each subsequent bill. (ii) Company may require the requesting person to present reasonable proof that the person is 60 years of age or older. (iii) Company will notify its Customers of this delayed payment option no less often than yearly. Company may include this notice with other information provided pursuant to these Service Regulations. (b) Residential Deferred Payment Plan If a deferred payment plan is offered, it will conform to the following guidelines. (i) Every deferred payment plan will provide that service will not be discontinued if Customer pays current bills and a reasonable amount of the outstanding bill and agrees to pay the balance in reasonable installments until the bill is paid. (ii) A deferred payment plan will be reduced to writing and will state immediately preceding the space provided for Customer's signature and in bold-face print at least two sizes larger than any other used, that "If -64- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 25 Service Rules and Regulations-Charges for Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 4 of 5 you are not satisfied with this agreement, do not sign. If you are satisfied with this agreement, you give up your right to dispute the amount due under the agreement except for the utility's failure or refusal to comply with the terms of this agreement." (iii) A deferred payment plan may include a one-time five percent (5%) penalty for late payment on the original amount of the outstanding bill with no prompt payment discount allowed except in cases where the outstanding bill is unusually high as a result of Company's error (such as an inaccurate estimated bill or an incorrectly read Meter). A deferred payment plan will not include a finance charge. (iv) If Customer has not fulfilled terms of a deferred payment agreement, or does not fulfill the terms and obligations of a level or average payment plan, then Company will have the right to disconnect service to Customer pursuant to the Discontinuance of Gas Service provisions in these Service Regulations; and, under such circumstances, Company will not be required to offer a subsequent negotiation of a payment agreement prior to disconnection. (c) Residential Level Payment Plan Company may offer a level payment plan, which, if offered, will allow Residential Customers to pay one-twelfth of the Customer's estimated annual charges (or, for a new Customer, an estimate) at the appropriate Customer class rates each month, with provisions for annual adjustments as may be determined based on actual gas use. (d) Residential Average Payment Plan Company may offer an average payment plan, which, if offered, will allow Residential Customers to pay one-twelfth of the sum of the Customer's current month's charges plus the previous 11 months' charges (or, for a new Customer, an estimate) at the appropriate Customer class rates for each month, plus a portion of any unbilled balance. (e) Deposits for Level and Average Payment Plans Company may require a deposit from all Residential Customers entering into level or average payment plans pursuant to the requirements of these Service Regulations. Company will include the amount already deposited by Customer in calculating a deposit required under this paragraph. Company will pay interest on the deposit as provided for in these Service Regulations, and may retain the deposit for the duration of the level or average payment plan. (5) Disputed Bills (a) In the event of a dispute between Customer and Company regarding any bill, Company will make such investigation as is reasonably required by the particular case and report the results thereof to Customer. In the event the dispute with a Residential or Commercial Customer is not resolved, Company will -65- I(Isre TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 25 Service Rules and Regulations - Charges for Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 5 of 5 inform Customer of Customer's right to file a complaint with the appropriate Regulatory Authority. (b) If a Residential or Commercial Customer notifies Company of the dispute prior to the date the bill becomes delinquent, Customer will not be required to pay the disputed portion of the bill that exceeds the amount of Customer's average usage for the billing period at current rates until the earlier of the following: resolution of the dispute or the expiration of a 60-day period beginning on the day the disputed bill is issued. For purposes of this section only, Customer's average usage for the billing period will be the average of Customer's usage for the same billing period during the preceding two years. Where no previous usage history exists, the average usage will be estimated on the basis of usage levels of similar Customers under similar conditions. (6) Overcharges and Undercharges If a billing is found to be in error, a billing adjustment will be calculated by Company. If Customer is found to be due a refund, the billing adjustment, if not made within three (3) billing cycles of the bill in error, will include interest applied to the amount of overcharge. If Customer was undercharged, Company may backbill to collect such undercharges for billings not older than six (6) months for Residential and Commercial Customers, and not older than twenty-five (25) months for Industrial Customers, unless the undercharge is the result of Meter tampering or unless Company produces records justifying additional backbilling. If the undercharge to a Residential Customer is $25 or more and not related to Meter tampering, then Company may offer the Residential Customer a deferred payment plan for the same length of time as that of the underbilling. Interest will be applied to the undercharged amount only in cases of Meter tampering. C -66- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 26 Service Rules and Regulations - Discontinuance of Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 5 6. Discontinuance of Gas Service Company, in addition to all other legal remedies, may discontinue Gas Service to Residential and Commercial Customers without liability as provided in these Service Regulations. A. Customer Discontinues Gas Service Company will have the right to require written notice from Customer requesting discontinuance of Gas Service. Customer will be held responsible for all gas consumed until written notice to discontinue Gas Service is received by Company and the final Meter reading is made, for which purpose forty-eight (48) hours will be allowed. Unless Customer requests otherwise, within seventy (70) days after discontinuing service, any credit balance of less than one dollar will be donated to a qualified energy assistance program. B. Company Discontinues Gas Service (1) Disconnection With Notice Upon notice to Customer, Customer's Gas Service may be disconnected for any of the following reasons: (a) failure to pay a delinquent account for service previously provided, without regard to the amount of Customer's security deposit; (b) failure to enter into a deferred payment agreement, if offered by Company, pursuant to these Service Regulations within five (5) working days after the bill has become delinquent; or (c) failure to comply with deposit or guarantee arrangements where required by these Service Regulations. Any such notice will be placed in the United States mail, postage prepaid, or hand delivered to Customer or to Customer's premises at least five (5) working days prior to the date after which Customer is eligible for termination, with the words "Termination Notice" or similar language prominently displayed on the notice. The notice will be provided in English and Spanish as necessary to adequately inform Customer, and will include the date after which service may be terminated, a toll free telephone number for the hours and address of locations where payment may be made, and a statement that if a health or other emergency exists, Company may be contacted concerning the nature of the emergency and the relief available, if any, to meet such emergency. Restoration of disconnected service will be scheduled based on existing workload following either receipt of all delinquent amounts due Company, a connect charge, and a deposit as prescribed in these Service Regulations, or an agreement on special arrangements if such agreement is offered by Company. (2) Disconnection Without Notice Gas service may be disconnected without notice for any of the following reasons: (a) failure to comply with the terms of a deferred payment plan for installment payment of a delinquent account; -67- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 26 Service Rules and Regulations - Discontinuance of Gas Service J APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 of 5 (b) violation of Company's rules pertaining to the use of service in a manner that interferes with the service of others or the operation of nonstandard equipment, if a reasonable attempt has been made to notify Customer and Customer is provided with a reasonable opportunity to remedy the situation; (c) where a known dangerous condition exists for as long as the condition exists; (d) tampering with Company's Meter or equipment including unauthorized usage or bypassing the same. If service is disconnected pursuant to this subsection, Customer may be required to pay for a protective device for, or the relocation of, Company facilities; (e) failure or refusal of Customer to repair or replace or to have repaired or replaced any of Customer's piping, appliances, or equipment when notified by Company, at Company's sole determination and discretion, of a hazardous condition, potentially hazardous condition, or any condition of such character that satisfactory or accurately metered service cannot be provided; (f) fraudulent representation relating to the consumption of gas; (g) for selling, delivering to, or furnishing gas or Gas Service, without written permission from Company, to other persons either on or off Customer's premises; (h) for using gas for purposes other than as represented; (i) for failure to provide Company access as provided in these Service Regulations, after reasonable notice under the circumstances. If service is disconnected pursuant to this subsection, Customer may be required to pay for a protective device for, or the relocation of, Company facilities; or (j) upon written request by a governmental entity regarding a known dangerous condition on the premises. (3) Prohibition of Disconnection of Gas Service (a) Gas Service may not be disconnected to a Residential or Commercial Customer for any of the following reasons: (i) delinquency in payment for service by a previous occupant of the premises; (ii) failure to pay for merchandise or charges for non-utility service purchased from Company; (iii) failure to pay for a different type or class of utility service unless the fee for such service is included on the same bill; -68- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 26 Service Rules and Regulations - Discontinuance of Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 of 5 (iv) failure to pay the account of another Customer as guarantor thereof, unless Company has, in writing, the guarantee as a condition precedent to the subject Customer's service; (v) failure to pay charges arising from an under billing occurring due to any misapplication of rates more than six (6) months prior to the current billing, subject to (vi) below; (vi) failure to pay charges arising from an under billing due to any faulty metering, unless the Meter has been tampered with or unless such under billing charges are properly due; or (vii) failure to pay an estimated bill unless estimated pursuant to the provisions of these Service Regulations, or Company is unable to read the Meter due to circumstances beyond its control. (b) Company will not discontinue service to a delinquent Residential Customer permanently residing in an individually metered Dwelling Unit when that Customer affirmatively establishes, at the time the delinquency occurs, that discontinuance of service will result in some person residing at that residence becoming seriously ill or more seriously ill if the service is discontinued. A Customer seeking to avoid termination of service under this subsection must make a written request supported by 'a written statement from a licensed physician. Both the request and the statement must be received by Company not more than five (5) working days after the date of delinquency of the bill. The prohibition against service termination provided by this subsection shall last twenty (20) days from the date of receipt by Company of the request and statement or such lesser period as may be agreed upon by Company and the Customer. The Customer who makes such request must enter into a payment plan agreement providing for payment of the delinquent amount as well as subsequent monthly billings. (c) Except where there is a known dangerous condition or a use of Gas Service in a manner that is dangerous or unreasonably interferes with service to others, Company will not disconnect Gas Service to a delinquent Residential Customer: (i) on a day when the previous day's temperature at the approved National Weather Station for the county where the Customer takes service fell below 32 degrees Fahrenheit and the National Weather Service predicts that the temperature in that county will fall below that level during the next 24 hours; (ii) for a billing period in which Company receives a written pledge, letter of intent, purchase order, or other written notification from an energy assistance provider that it is forwarding sufficient payment to continue service; or -69- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 26 Service Rules and Regulations - Discontinuance of Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 4 of 5 (iii) on a day, or on a day immediately preceding a day, when personnel or agents of Company are not available for the purpose of receiving payment or making collections and reconnecting service. (4) Abandonment of Customer Company will not abandon a Residential or Commercial Customer without written approval from the appropriate Regulatory Authority. (5) Notice In the September or October billing periods, Company will give notice to Residential and Commercial Customers as follows: (i) Company will provide a copy of the portion of these Service Regulations related to Discontinuance of Service to the social services agencies that distribute funds from the Low Income Home Energy Assistance Program within its service area; (ii) Company will provide a copy of the portion of these Service Regulations related to Discontinuance of Service to any other social service agency of which it is aware that provides financial assistance to low income Customers in its service area; and (iii) Company will provide a copy of the portion of these Service Regulations related to Discontinuance of Service to all its Residential Customers and Customers who are owners, operators, or managers of master metered systems in its service area, and will instruct owners, operators, or managers of master metered systems to provide a copy of the portion of these Service Regulations related to Discontinuance of Service to all their Customers. (6) Date of Disconnection of Gas Service Unless a dangerous condition exists, or unless Customer requests disconnection, service will not be disconnected on a day, or on a day immediately preceding a day, when personnel or agents of Company are not available to the public for the purpose of making collections and reconnecting service. (7) Company Rights and Remedies for Disconnection of Gas Service Failure of Company to discontinue Gas Service at any time after default or breach of these Service Regulations, the Rate Schedule under which Customer is receiving Gas Service, the Agreement for Gas Service, or an agreement for payment in lieu of discontinuation, or to resort to any legal remedy or its exercise of any one or more of such remedies, does not affect Company's right to resort thereafter to any one or more of such remedies for the same or any other default or breach by Customer. (8) Customer Responsibility for Restoration of Gas Service When Company discontinues Gas Service to Customer for failure in the performance of Customer under the provisions of these Service Regulations, the Rate Schedule under which Customer is receiving Gas Service, the Agreement for Gas Service, or an agreement for payment in lieu of discontinuation, before Company restores Gas Service, -70- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 26 Service Rules and Regulations - Discontinuance of Gas Service APPLICABLE TO: Distribution System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 5 of 5 Customer must correct to the satisfaction of Company all defaults that caused Gas Service to be discontinued and pay any additional charge for restoring Gas Service as provided in Company's Rate Schedules. When Company discontinues Gas Service to Customer, Customer's obligation specified in these Service Regulations, the Rate Schedule under which Customer was receiving Gas Service, or the Agreement for Gas Service, is not lessened or changed, nor is the amount of money due and payable to Company affected in any manner. C C -71- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 27 Service Rules and Regulations- Information to Customers APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 2 7. Information to Customers Company will: (A) maintain a current set of maps showing the physical locations of its facilities. All distribution facilities will be labeled to indicate the size or any pertinent information that will accurately describe Company's facilities. These maps, or such other maps as may be required by the Regulatory Authority, will be kept by Company in a central location and will be available for Regulatory Authority inspection only during normal working hours. Subject to Company's right to protect the security of its facilities, Company will make available up-to-date maps, plans, or records of its immediate area, with such other information as may be necessary to advise Applicants and others entitled to the information as to the facilities available for serving that locality; (B) in compliance with applicable law or regulations, notify Customers affected by a change in rates or schedule or classification; (C) upon request, inform Customer as to the method of reading Meters; (D) inform or provide to new Residential and Commercial Customers, at the time service is requested or initiated, or provide as an insert in the first billing, a pamphlet or information packet containing the following information. This information will be provided in English and Spanish to adequately inform Customer; provided, however, the Regulatory Authority, upon application and a showing of good cause, may exempt Company from the requirement that the information be provided in Spanish. (1) Customer's right to information concerning rates and services and Customer's right to inspect or obtain, at reproduction cost, a copy of the applicable tariffs and service rules. (2) Customer's right to have his or her Meter checked without charge under these Service Regulations (relating to Meters), if applicable. (3) The time allowed to pay outstanding bills. (4) Grounds for termination of service. (5) The steps Company must take before terminating service. (6) How Customer can resolve billing disputes with Company and how disputes and health emergencies may affect termination of service. (7) Information on alternative payment plans if offered by Company. (8) The steps necessary to have service reconnected after involuntary termination. (9) The appropriate Regulatory Authority with whom to register a complaint and how to contact such authority. C -72- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 27 Service Rules and Regulations - Information to Customers j APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 of 2 (10) A toll-free telephone number where information may be obtained concerning the hours and addresses of locations where bills may be paid. (11) Customer's right to be instructed by Company how to read Customer's Meter. (F) At least once each calendar year, notify Residential and Commercial Customers that information is available upon request, at no charge to Customer, unless otherwise stated in these Service Regulations, concerning the items listed in Paragraph (E)(1-11) of this subsection. This notice may be accomplished by use of a billing insert or a printed statement upon the bill itself. C C -73- VII. STANDARD AGREEMENTS FOR SERVICE TARIFF FOR GAS SERVICE TXU GAS COMPANY th.„ RATE SCHEDULE: Standard Agreements for Service APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 1 VII. STANDARD AGREEMENTS FOR SERVICE: L C -74- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 28 Standard Transportation Agreement- City Gate Service APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 1 TRANSPORTATION AGREEMENT - CITY GATE SERVICE This Agreement is entered into effective the 1st day of ,20_(the"Effective Date"). CUSTOMER: COMPANY: TXU GAS COMPANY FOR NOTICES: FOR INVOICES: FOR NOTICES: FOR PAYMENTS: TXU Gas Company TXU Gas Company 301 S. Harwood Street P.O. Box 910255 ,Texas ,Texas Suite 801-North Dallas,Texas 75391-0255 Attention: Attention: Dallas,Texas 75201 Fax: Fax: Attn: Contract E-mail: E-mail: Administration QUANTITY: Winter(Dec-Feb) Winter Shoulder(Nov.&Mar.) Summer(May-Sep) Summer Shoulder(Apr&Oct) MDQ= MMBtu MDQ=_MMBtu MDQ= MMBtu MDQ=_MMBtu MHQ=_MMBtu MHQ=_MMBtu MHQ= MMBtu MHQ= MMBtu STORAGE Customer will have the right to have up to_Mcf of Gas stored in the Primary Storage Facilities and up to_Mcf of CAPACITY: Gas stored in the Secondary Storage Facilities identified below: Primary Storage Facilities Secondary Storage Facilities STORAGE Customer wi ll nominate volumes of Gas for injection into storage from any active Receipt Point by utilizing its capacity rights INJECTIONS: hereunder. Nominations for injection to storage must designate the quantities to be injected into the Primary and Secondary Storage Facilities. Customer will have the right to inject each Day into the Primary and Secondary Storage Facilities a total of up to_Mcf as set forth on Exhibit"C."attached hereto and incorporated herein by reference. STORAGE Customer will nominate volumes of Gas for withdrawal from storage utilizing its capacity rights hereunder.Customer's withdrawal WITHDRAWALS: rights will be determined by then-existing inventory of Customer's Gas in the Primary and Secondary Storage Facilities as set forth on Exhibits"D"and"E."attached hereto and incorporated herein by reference. TERM: This Agreement will be effective as of the Effective Date and will,subject to the terms and provisions of this Agreement,remain in full force and effect for a primary term of one year.and Month to Month thereafter until cancelled by either party giving the other party 30 Days'prior written notice. Notwithstanding anything contained in this Agreement to the contrary,if an imbalance exists on the date of termination hereof between the quantities of Gas received at the Receipt Point(s)and the quantities of Gas delivered to the Delivery Point(s),then the term of this Agreement will be extended for a period of time to allow the party whose deliveries are in arrears to eliminate the imbalance as soon as reasonably practicable. Termination or cancellation of this Agreement will not extinguish any obligation that accrued before such termination or cancellation. DELIVERY POINT(S):Gas transported by Company hereunder will be delivered to Customer at the point(s) of interconnection between Company's facilities and Customer's facilities at the outlet of the meters listed on Exhibit"A."attached hereto and incorporated herein by reference. RECEIPT POINT(S): Gas received by Company for transportation hereunder will be received at the point(s)listed on Exhibit"B,"attached hereto and incorporated herein by reference. RATE SCHEDULES: The following rate schedules apply to the service provided hereunder and are incorporated herein by reference: Rate Schedule:CGS-City Gate Service,including all applicable riders Rate Schedule:City Gate Transportation Terms and Conditions Rate Schedule:General Transportation Contract Terms and Conditions TXU GAS COMPANY By: By: Name: Name: Title: Title: -75- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 29 Standard Transportation Agreement- Pipeline APPLICABLE TO: Pipeline System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 1 TRANSPORTATION AGREEMENT - PIPELINE This Agreement is entered into effective the 1st day of ,20_(the"Effective Date"). CUSTOMER: COMPANY: TXU GAS COMPANY FOR NOTICES: FOR INVOICES: FOR NOTICES: FOR PAYMENTS: TXU Gas Company TXU Gas Company 301 S. Harwood Street P.O. Box 910255 ,Texas ,Texas Suite 801-North Dallas,Texas 75391-0255 Attention: Attention: Dallas,Texas 75201 Fax: Fax: Attn: Contract E-mail: E-mail: Administration QUANTITY: Maximum Transportation Quantities: Plant Protection Quantity Firm Electric Load Quantity (Industrial Customers Only) (Electric Generation Customers Only) MDQ=_MMBtu MHQ= MMBtu MMBtu/Day _MMBtu/Day TERM: This Agreement will be effective as of the Effective Date and will,subject to the terms and provisions of this Agreement,remain in full force and effect for a primary term of one year,and Month to Month thereafter until cancelled by either party giving the other party 30 Days'prior written notice. Notwithstanding anything contained in this Agreement to the contrary,if an imbalance exists on the date of termination hereof between the quantities of Gas received at the Receipt Point(s)and the quantities of Gas delivered to the Delivery Point(s),then the term of this Agreement will be extended for a period of time to allow the party whose deliveries are in arrears to eliminate the imbalance as soon as reasonably practicable. Termination or cancellation of this Agreement will not extinguish any obligation that accrued before such termination or cancellation. DELIVERY POINT: Gas transported by Transporter hereunder will be delivered to Customer at the point of interconnection between Transporter's facilities and Customer's facilities at the outlet of the meter at in or near ,Texas. Customer's facilities are located inside the city limits: _Yes No RECEIPT POINT(S): Gas received by Company for transportation hereunder will be received at the point(s)listed on Exhibit"A,"attached hereto and incorporated herein by reference. RATE SCHEDULES: The following rate schedules apply to the service provided hereunder and are incorporated herein by reference: Rate Schedule:PT-Pipeline Transportation Service,including all applicable riders Rate Schedule:Pipeline/Distribution Transportation Terms and Conditions Rate Schedule:General Transportation Contract Terms and Conditions TXU GAS COMPANY By: By: Name: • Name: Title: Title: (iime -76- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 30 Standard Transportation Agreement- Distribution APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 1 TRANSPORTATION AGREEMENT - DISTRIBUTION This Agreement is entered into effective the 1st day of ,20_(the"Effective Date"). CUSTOMER: COMPANY: TXU GAS COMPANY FOR NOTICES: FOR INVOICES: FOR NOTICES: FOR PAYMENTS: TXU Gas Company TXU Gas Company 500 N. Akard Street P.O. Box 910255 ,Texas ,Texas 9th Floor Dallas,Texas 75391-0255 Attention: Attention: Dallas,Texas 75201 Fax: Fax: Attn: Contract E-mail: E-mail: Administration • QUANTITY: Maximum Transportation Quantities: Plant Protection Quantity Firm Electric Load Quantity (Industrial Customers Only) (Electric Generation Customers Only) MDQ=_MMBtu MHQ=_MMBtu MMBtu/Day _MMBtu/Day TERM: This Agreement will be effective as of the Effective Date and will,subject to the terms and provisions of this Agreement,remain in full force and effect for a primary term of one year.and Month to Month thereafter until cancelled by either party giving the other party 30 Days'prior written notice. Notwithstanding anything contained in this Agreement to the contrary.if an imbalance exists on the date of termination hereof between the quantities of Gas received at the Receipt Point(s)and the quantities of Gas delivered to the Delivery Point(s),then the term of this Agreement will be extended for a period of time to allow the party whose deliveries are in arrears to eliminate the imbalance as soon as reasonably practicable. Termination or cancellation of this Agreement will not extinguish any obligation that accrued before such termination or cancellation. DELIVERY POINT: Gas transported by Transporter hereunder will be delivered to Customer at the point of interconnection between Transporter's facilities and Customer's facilities at the outlet of the meter at in or near ,Texas. Customer's facilities are located inside the city limits: —Yes _No RECEIPT POINT(S): Gas received by Company for transportation hereunder will be received at the point(s)listed on Exhibit"A,"attached hereto and incorporated herein by reference. RATE SCHEDULES: The following rate schedules apply to the service provided hereunder and are incorporated herein by reference: Rate Schedule:T•Transportation,including all applicable riders Rate Schedule:Pipeline/Distribution Transportation Terms and Conditions Rate Schedule:General Transportation Contract Terms and Conditions TXU GAS COMPANY By: By: Name: Name: Title: Title: (kr -77- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 13 1. Definitions (a) "Btu" means British Thermal Unit and, where appropriate, the plural thereof. (b) "Company" means TXU Gas Company, its successors and assigns. (c) "Cumulative Imbalance" means the absolute value of the difference between the cumulative quantities of Gas received at the Receipt Point(s) during the term of the applicable Transportation Agreement, less the Retention Volumes, and the cumulative quantities of Gas delivered at the Delivery Point(s) during the term of the applicable Transportation Agreement. (d) "Customer" means the party identified as the "Customer" in the applicable Transportation Agreement. (e) "Customer's Designee" means the person or entity who owns the facilities at the Receipt Point(s) through which Gas is delivered to Company under the applicable Transportation Agreement, or who owns the facilities at the Delivery Point(s) into which Gas is redelivered by Company under the applicable Transportation Agreement, unless another person or entity is specifically identified by Customer in writing to act as Customer's Designee for the purposes of the applicable Transportation Agreement. (f) "Day" means the period beginning at 9:00 a.m. on one calendar day and ending at 9:00 a.m. on the following calendar day. Unless otherwise noted, all times used in this Tariff for Gas Service are central clock times. (g) "Delivery Point(s)" means the point(s) of interconnection between Company's facilities and Customer's or Customer's Designee's facilities at the outlet of the meter at Customer's facilities, or Customer's or Customer's Designee's pipeline, as more specifically identified and set forth in the (lior Transportation Agreement executed by Customer and Company. .(h) "Electric Generation Customer" means a customer who utilizes the Gas delivered by Company as fuel to generate electricity at Customer's power plant at or near the Delivery Point. (i) "Gas" means natural gas produced from gas wells, gas produced in association with oil (casinghead gas), and/or the residue gas resulting from processing casinghead gas and/or gas well gas. Q) "Heating Value" or "Heat Content" means the total heating value expressed in Btu per cubic foot (gross heating value) of the Gas delivered under a Transportation Agreement, and will be determined at a temperature of 60 degrees Fahrenheit, saturated with water vapor and under a pressure equivalent to that of 30 inches of mercury at 32 degrees Fahrenheit converted to base conditions of 60 degrees Fahrenheit and a pressure of 14.65 psia and adjusted to reflect actual water vapor content. (k) "Industrial Customer" has the meaning contained in Rate Schedule- Definitions. (I) "Make-up Volumes" means the quantity of gas specifically and separately nominated by Customer and confirmed by Company to resolve any imbalance under the applicable Transportation Agreement. (m) "Maximum Daily Quantity" or"MDQ" means the maximum quantity of Gas that Customer may receive from Company under the applicable Transportation Agreement in the aggregate at the Delivery Point(s) during any Day, as may be adjusted pursuant to the Rate Schedules applicable to the type of service provided by Company. (n) "Maximum Hourly Quantity" or "MHO" means the maximum quantity of Gas that • Customer may receive from Company under the applicable Transportation Agreement in the aggregate at the Delivery Point(s)during any clock hour, at an instantaneous flow rate over the entire hour. (o) "Mcf"means 1,000 cubic feet. (p) "MMBtu" means one million Btu. Additionally, one MMBtu will equal one decatherm, and any reference to decatherms will equate to MMBtus. (q) "Month" means the period beginning at 9:00 a.m. on the first Day of a calendar month and ending at 9:00 a.m. on the first Day of the succeeding calendar month. (r) "Psia" means pounds per square inch absolute. -78- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 of 13 (s) "Receipt Point(s)" means the point(s) of interconnection between Company's facilities and Customer's or Customer's Designee's pipeline facilities, as more specifically identified and set forth in the Transportation Agreement executed by Customer and Company. (t) "Retention Volumes" means the quantity of Gas retained by Company, as compensation for fuel used, and for lost and unaccounted for quantities of Gas, equal to the percentage specified in the Rate Schedules applicable to the type of service provided by Company, as the same may be changed from time to time. (u) "Transportation Agreement" means the written agreement executed by Customer and Company, which establishes the rights and obligations of Customer and Company related to natural gas transportation service provided by Company. (v) "Year" means a period of 12 consecutive Months beginning at 9:00 a.m. on the first Day of a calendar Month and ending at 9:00 a.m. on the same date of each succeeding year during the term of any Transportation Agreement. 2. Quantity The quantities of Gas to be transported under any Transportation Agreement will not exceed during any Day the Maximum Daily Quantity, or during any hour the Maximum Hourly Quantity, as set forth in the applicable Transportation Agreement. The calculation of all quantities of Gas received and delivered under any Transportation Agreement will be on an MMBtu basis for all purposes, including, but not limited to, calculating imbalance charges and Retention Volumes. 3. Laws and Regulations (a) Transportation Agreements Subject to Applicable Laws. All Transportation Agreements are subject to applicable state and federal laws, and orders, directives, rules, and regulations of any governmental body, official, or agency having jurisdiction over the transportation of Gas under the Transportation Agreement; therefore, Company's obligations and liabilities under all Transportation Agreement will be limited accordingly. (b) Intrastate Transportation. Customer's and/or Customer's Designees'facilities utilized for the delivery and acceptance of Gas under any Transportation Agreement shall not be subject to the Natural Gas Act of 1938, as amended(the "NGA"). Customer and Customer's Designees will take no action nor commit any act of omission that will subject any transaction under a Transportation Agreement or Company's facilities to jurisdiction of the Federal Energy Regulatory Commission ("FERC") or any successor governmental agency under the terms of the NGA. The Gas delivered and accepted under any Transportation Agreement shall not have been nor shall be sold, transported, or otherwise utilized in a manner that will subject Company to the terms of the NGA. In addition to and without excluding any remedy Company may have at law or in equity, Customer will be liable to Company for all damages, injuries, and reasonable expenses Company may sustain by reason of any breach of the provisions of this paragraph. 4. Nominations (a) Customer will provide Company with Customer's nomination for the first Day of each Month no later than 2:00 p.m. on the second business Day prior to the first Day of such Month. Each such nomination will contain Customer's nominated quantities for the Delivery Point(s) and the Receipt Point(s), designation of the appropriate contract(s) covering such Gas, and the identity by name and telephone number of individual(s) who have authority to confirm the nominated Gas quantities at each Receipt Point and Delivery Point. Customer may change nominated quantities on any business Day, provided such nomination change must be received by Company prior to 11:30 a.m. of any business Day to be effective the next Day. Additional intra-day nominations may be made upon mutual agreement of Customer and Company. If Customer fails to furnish nominations as required above for any Day during the term of any Transportation Agreement, then Company may suspend transportation service under the -79- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 of 13 applicable Transportation Agreement for such Day and such interruption of service will not prevent enforcement by Company of any other of its legal rights or remedies, including imbalance resolutions, nor be construed as a breach of Company's obligations under any Transportation Agreement. If Customer fails to nominate quantities for three consecutive Months during the term of any Transportation Agreement, then Company, upon 30 Days' prior written notice to Customer, may terminate the applicable Transportation Agreement; provided, however, the obligation to make payment for monies due under such Transportation Agreement will not be extinguished. Company at any time and from time to time and for any specified or unspecified time period(s), may for operational reasons prorate and/or totally refuse to accept new nominations or honor then existing nominations at certain then existing Receipt Point(s); however, Company will endeavor to notify Customer or Customer's Designee of such refusal as soon as • practicable, but Company will not be liable for any failure to do so. Notwithstanding the foregoing. Customer will not attempt to utilize the nomination process set forth above to reserve or gain additional pipeline capacity by over nomination, and in the event Company, in its reasonable discretion, determines that Customer has attempted to do so, then Company will have the right, with or without prior notice, to: (i) revise the nomination; or(ii) suspend service under the applicable Transportation Agreement. (b) If Customer fails to furnish transportation nominations as required herein for any month during the term of the applicable Transportation Agreement, and Customer receives Gas from Company at the Delivery Point(s), then Company may charge Customer for each Day that Customer does not have a confirmed nomination in place, 150% of difference in the highest and lowest "midpoint" price for the Katy point listed in Platts Gas Daily in the table entitled "Daily Price Survey" for the applicable Month. If Customer fails to furnish transportation nominations as required herein for any Day or Month, then Customer's transportation nomination for such Day or Month will be deemed to be zero MMBtu. 5. Imbalances (a) Customer's Balancing Obligations. Customer will balance, on a simultaneous basis, between the quantities of Gas received by Company at the Receipt Point(s), less the Retention Volumes and Make-up Volumes, and the quantities of Gas delivered at the Delivery Point(s). An imbalance will exist under any Transportation Agreement when, during any designated time period during the term thereof, there is a numerical difference between the quantity of Gas delivered by Company to Customer at the Delivery Point and the quantity of Gas received by Company from Customer (or Customer's Designee) at the Receipt Point(s), exclusive of Retention Volumes and Make-up Volumes. Customer will be solely responsible to monitor actual deliveries and receipts under each Transportation Agreement. Customer must adjust its nominations, deliveries, and receipts to maintain a simultaneous balance between the quantities of Gas received at the Receipt Point(s) and the quantities of Gas delivered at the Delivery Point(s), and must notify Company of any imbalances or situations that may cause imbalances. If Company is unable to receive Gas at any Receipt Point in the quantities nominated, or deliver Gas at any Delivery Point in the quantities nominated, as provided for herein, Company will notify Customer as soon as reasonably practicable. (b) Company will have no obligation, during any designated time period during the term of any Transportation Agreement, to deliver Gas to Customer under the applicable Transportation Agreement in excess of the quantity received by Company at the applicable Receipt Point(s), less Retention Volumes, nor will Company have any obligation, during any designated time period during the term of any Transportation Agreement, to receive from Customer at the applicable Receipt Point(s) quantities of Gas under any Transportation Agreement that exceed the quantities of Gas delivered by Company to Customer under such Transportation Agreement, plus applicable Retention Volumes. (c) Imbalance Charges. In the event of an imbalance under any Transportation Agreement, Company may charge Customer the applicable imbalance charges specified in the Rate Schedules Cy, applicable to the type of service provided by Company. (d) Operational Flow Orders. Upon at least one hour prior notification by Company that operational conditions exist on Company's system that, in Company's sole opinion, may adversely affect • -80- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions (6, APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 4 of 13 service to other Customers or otherwise impact system integrity (an "Operational Flow Order"), Customer will be responsible to ensure that quantities of gas delivered at the Delivery Point(s) during each hour are either: i) less than or equal to, or ii) greater than or equal to the confirmed nominated receipt quantities of gas for such hour at the Receipt Point(s), as notified by Company. (e) Company May Restrict Receipts and Deliveries to Maintain Balance. Notwithstanding anything contained herein or in any Transportation Agreement, Company will always have the total and unrestricted right, but no obligation whatsoever, to at any time and from time to time restrict, interrupt, or reduce its receipt and/or delivery of Gas under any Transportation Agreement in order to maintain a simultaneous balance for each Delivery Point or to correct any prior imbalance under any Transportation Agreement. (f) Remaining Imbalances after Contract Expires or Is Terminated. Notwithstanding anything contained herein or in any Transportation Agreement, in the event there is an imbalance in Customer's Imbalance Account 90 days after the applicable Transportation Agreement expires or is terminated, Company will have the right to invoice Customer for the product of: (i) the MMBtu in Customer's Imbalance Account and (ii) the highest "midpoint" price for the Katy point listed in Platt's Gas Daily, in the table entitled "Daily Price Survey," published on any Day during the 90 Days preceding such expiration or termination of the applicable Transportation Agreement. Customer must pay the amount contained in such invoice within 10 Days after receipt of such invoice, or such longer period as prescribed by applicable law. 6. Rates (a) Rates. Customer will receive and pay for Gas transportation service under the terms and conditions of any Transportation Agreement, commencing with initial deliveries of Gas under the applicable Transportation Agreement, and during each Month, at the rates and fees set forth in the applicable Rate Schedule identified in the applicable Transportation Agreement. (b) Regulatory Revision. Company's rates and terms and conditions of service may be revised or replaced from time to time in the future by a regulatory authority with jurisdiction. Any such revised or new rates or terms and conditions of service, when lawfully established, will immediately become effective and be applicable to Gas service under any Transportation Agreement commencing with Gas delivered upon and after the effective date of such change. If any new or different rates, and/or • terms and conditions of service, that affect any service under any Transportation Agreement are established by a regulatory authority with jurisdiction, such rate(s) and/or terms and conditions of service will supersede conflicting provisions of the applicable Transportation Agreement. Company will give Customer notice of any such change, together with a copy of the revised rates and/or terms and conditions of service. Such notice may be mailed by Company separately or included in Customer's billing statement. (c) Other Fees. The use of certain Receipt Point(s) may require that Customer also pay a compression fee, third-party meter fee, and/or additional retention. Any such fee(s) will be charged in addition to all other applicable rates and fees under any Transportation Agreement and/or Company will retain an additional percentage of such Gas over the Retention Volumes identified under the applicable Transportation Agreement; provided that Company has notified Customer of such fee(s) and/or additional retention percentage. 7. Receipt Point(s) and Delivery Point(s) (a) Receipt Point(s). Gas delivered by Customer (or Customer's Designee) to Company under any Transportation Agreement will be delivered at the Receipt Point(s) identified in the applicable Transportation Agreement. Notwithstanding anything contained herein to the contrary, in the event of unfavorable operating conditions (as determined by Company in its sole opinion), or a change of ownership of specific Receipt Point(s) or appurtenant facilities, or if, in Company's sole opinion, the receipt of Gas from a specific Receipt Point under any Transportation Agreement ever becomes -81- TARIFF FOR GAS SERVICE TXU GAS COMPANY (bror RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 5 of 13 uneconomical for any reason whatsoever, then Company will have the right (i) to immediately discontinue the receipt of Gas from any such Receipt Point(s) and/or (ii) upon 30 Days' prior written notice to Customer, to delete any such Receipt Point(s) from all Transportation Agreements. Notwithstanding the foregoing, if, in Company's reasonable opinion, it becomes necessary for operational reasons, Company will have the right, at any time and from time to time, to require Customer to deliver the Gas to be transported under any Transportation Agreement at Receipt Point(s) located in a particular geographic region(s). (b) Delivery Point(s). Gas transported by Company under any Transportation Agreement will be delivered to Customer at the Delivery Point(s) identified in the applicable Transportation Agreement. (c) Allocations. It is recognized that Gas deliveries from one or more parties other than Customer may also be received at any particular Receipt Point. If that occurs, Gas received at such Receipt Point may be allocated among the parties delivering and receiving the Gas. As between Company and Customer, Company will, in its sole discretion, determine the allocation of all receipts at such Receipt Point, and the resulting quantities received under any Transportation Agreement. Each party will furnish the other party all data required to accurately account for all Gas delivered to, and received by, Company at the Receipt Point(s) under any Transportation Agreement. 8. Pressures at Points of Receipt and Delivery (a) Pressures at Receipt Point(s). Customer (or Customer's Designee) will deliver Gas to Company at the Receipt Point(s) at pressures sufficient to enter Company's pipeline system at such point(s); provided, however, that Customer's delivery pressure into Company's system at the Receipt Point(s) may not exceed Company's maximum allowable operating pressure, as such may vary from time to time, at any such point(s) or cause the pressure at such point(s) to exceed Company's maximum allowable operating pressure. (b) Pressures at Delivery Point(s). Company will deliver Gas to Customer or Customer's Designee at the Delivery Point(s) at Company's operating pressure, as such may vary from time to time. 9. Measuring Equipment and Testing (a) Metering Party and Non-Metering Party. The Gas delivered to Company at the Receipt Point(s), and delivered to Customer at the Delivery Point(s), will be measured by measuring devices of standard type, which, unless otherwise mutually agreed by Customer and Company, will be owned, installed, operated, and maintained by Company (or its designee). Measurement devices and equipment will be tested and adjusted for accuracy in accordance with industry standards. For the purposes of these General Transportation Contract Terms and Conditions, the party metering the Gas, or whose designee meters the Gas, at a particular Receipt Point or Delivery Point is referred to as the "Metering Party" and the other party is referred to as the"Non-Metering Party." (b) Additional Facilities. If adequate metering facilities are already in existence at the Receipt and Delivery Point(s) under any Transportation Agreement, such existing metering facilities will be used for so long as, in Company's reasonable opinion, they remain adequate and the party having title to such facilities will retain title to such facilities. (c) Access to Equipment. The Non-Metering Party may have access to the Metering Party's metering equipment at all times, to the extent such access does not interfere with the Metering Party's • operations, but the maintenance, calibration, and adjustment thereof will be done only by the employees or agents of the Metering Party. Records from such metering equipment will remain the property of the Metering Party and must be kept on file by said party for a period of not less than two Years. However, upon request of the Non-Metering Party, the Metering Party will make available to the Non-Metering Party quantity records from its metering equipment, together with calculations therefrom, for inspection and verification, subject to return to the Metering Party within 30 Days after receipt thereof. -82- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: • EFFECTIVE DATE: PAGE: 6 of 13 (d) Check Meters. The Non-Metering Party may, at its option and expense, install and operate meters, instruments, and equipment, in a mariner that will not interfere with the Metering Party's equipment, to check the Metering Party's meters, instruments, and equipment, but the measurement of Gas for the purpose of any Transportation Agreement will be by the Metering Party's meter only, except as hereinafter specifically provided. The meters, check meters, instruments, and equipment installed by each party will be subject at all reasonable times to inspection or examination by the other party, but the calibration and adjustment thereof will be done only by the installing party. (e) Meter Tests. At the request of the Non-Metering Party, the Metering Party will give notice to the Non-Metering Party, or its properly-designated agent, of the time of all tests of the Receipt and Delivery Point meter(s) sufficiently in advance of such tests so that the Non-Metering Party may conveniently have its representatives present; provided, however, that if the Metering Party has given such notice to the Non-Metering Party and the Non-Metering Party's representative is not present at the time specified, then the Metering Party may proceed with the test as though the Non-Metering Party's representative were present. (f) Meter Errors. Meter measurements computed by the Metering Party will be deemed to be correct except where the meter is found to be inaccurate by more than 1%, fast or slow, or to have failed to register, in either of which cases the Metering Party will repair or replace the meter. The quantity of Gas delivered while the meter was inaccurate or failed to register will be determined by the readings of the Non-Metering Party's check meter, if installed and in good operating condition, or by correcting the error if the percentage of error is ascertainable by calibration or mathematical calculation. If not so ascertainable, then it will be determined by estimating.the quantity on a basis of deliveries under similar conditions when the meter was registering accurately. Such adjustment or correction will be made only for the,last 1/2 of the period that has elapsed since the previous test. (g) Measured Quantities. Measured quantities computed by the Metering Party will be deemed to be correct except where the meter quantity, for a specified Month, is found to be inaccurate by the lesser of: (i) 50 MMBtu, or(ii) 1%, above or below, the quantity previously determined for the specified Month. (h) Measurement Disputes. In the event of a measurement dispute between Company and Customer under a Transportation Agreement, the measured quantities computed by the Metering Party will be deemed to be correct and relied upon for gas imbalance accounting until such dispute is resolved. (i) Remote Monitoring and Data Acquisition. Company will install, or cause to be installed, communications equipment to allow for the remote monitoring and meter data retrieval of metering equipment at all Delivery Point(s) under any Transportation Agreement. Customer will reimburse Company, within ten days from receipt of Company's invoice, for any such communications or related metering equipment and associated equipment, and all labor and overhead expenses attributable to such equipment. Failure to reimburse Company as provided herein, will allow Company to suspend services with respect to the applicable Delivery Point(s). 10. Measurements (a) Temperature Measurements. For metering points for which the daily quantity is expected to exceed 5,000 MMBtu per Day, the Metering Party will, at Customer's expense, properly install and operate a device of standard make to continuously determine or record flowing temperature. The temperature values will be used in Gas measurement computations. With respect to relative density (specific gravity) of the Gas, such will be determined by (1) "on-site" sampling and laboratory analysis, or (2) any other method that is of standard industry practice (provided, however, that either party may at its own expense properly install and operate a recording relative density instrument of standard make and in this event the relative density as recorded will be used in the Gas measurement computations). (b) Standards. The meters for measurement of quantities at the Receipt and Delivery Point(s) will be installed and operated, and Gas measurement computations will be made, in accordance with current industry standards. Orifice metering will be performed in accordance with the latest version of -83- TARIFF FOR GAS SERVICE TXU GAS COMPANY (lopv RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 7 of 13 A.G.A. Report No. 3 - ANSI/API 2530. Positive displacement will be performed in accordance with the latest version of ANSI B109.1, B109.2, or B109.3. Turbine metering will be performed in accordance with the latest version of A.G.A. Report No. 7. Ultrasonic metering will be performed in accordance with the latest version of A.G.A. Report No. 9. Electronic Gas Measurement (EGM) will be performed in accordance with the latest version of API Manual of Petroleum Measurement Standards Chapter 21 - Flow Measurement Using Electronic Metering Systems. The unit of measurement of Gas will be 1,000 cubic feet at a base pressure of 14.65 psia and a temperature base of 60 degrees Fahrenheit. Meter measurements will be computed by the Metering Party into such units in accordance with the Ideal Gas Laws for quantity variations due to metered pressure and corrected for deviation using average values of recorded relative density and flowing temperature, or by using the calculated relative density determined by the method mentioned in paragraph (c) below. In no circumstance will the average value of flowing temperature be determined for a period of less than one Day. (c) Heating Value and Relative Density. The average heating value (Btu) and relative density of the Gas delivered under any Transportation Agreement by either party may be determined by the use of recording instruments of standard type, which may be installed and operated by the Metering Party at the metering point, or at such other point or points as are mutually agreeable to both parties; provided, however, if there is no Btu/relative density instrument at a particular Receipt or Delivery Point specified in the applicable Transportation Agreement, then the heating value and relative density of the Gas at such point may be determined by "on-site" sampling and laboratory analysis or other reasonable industry standard methods. (d) Measurements Made Only While Gas Flowing. In Gas measurement computations the (iime determinations for the average values for meter pressure, relative density, and flowing temperature values will be determined only during periods of time when Gas is actually flowing through the meter(s). (e) Gas Industry Standards. Gas industry standards are in the process of being developed by the North American Energy Standards Board, subject to FERC approval. To the extent that Company reasonably deems it necessary, from time to time and at any time, to implement any or all of such standards, Company will have the right to add such standards hereto and/or modify or change the provisions contained herein in order to effect such changes if such changes do not have a material adverse effect on the rights of Customer under any Transportation Agreement. 11. Quality (a) Quality. Each party will deliver to the other party under a Transportation Agreement Gas that is of merchantable quality and is commercially free from water, hazardous substances, hydrocarbon liquids, bacteria, and other objectionable liquids, solids, and/or Gas components. In addition, the Gas delivered by each party under a Transportation Agreement will specifically contain not more than: (i) 0.05%oxygen, (ii) five grains of total sulphur consisting of not more than 1/4 grain of hydrogen sulphide and one grain of mercaptan sulphur per 100 cubic feet of Gas, (iii) 2%by volume of carbon dioxide, (iv) 4% by volume total non-hydrocarbon and inert gases, and (v) seven pounds of water vapor per one million cubic feet of Gas; provided, however, if Customer tenders Gas for transportation upstream of a dehydration plant, Company may, at its option, waive Customer's obligation to deliver dehydrated Gas, subject to Company's continuing right to withdraw such waiver at any time in the future. -84- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions ! APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 8 of 13 The Gas will be at temperatures not in excess of 120 degrees Fahrenheit nor less than 40 degrees Fahrenheit, provided that the Gas will have a hydrocarbon dew point not to exceed 40 degrees Fahrenheit at the delivery pressure, and will have a heat content of not less than 950 nor more than 1,100 Btu per cubic foot under the conditions of measurement contained herein. Company will not be obligated to accept any Gas delivered by Customer (or Customer's Designee) under any Transportation Agreement that is not interchangeable with other Gas in Company's pipeline at the Receipt Point(s) listed in such Transportation Agreement. Company's determination of such interchangeability will be based upon a factor that is equivalent to the quotient obtained by dividing the total heating value of such Gas, expressed in Btu, by the square root of the specific gravity of such Gas. Such factor must be within ±7% of the interchange factor established by Company for its system at the Receipt Point(s). • (b) Quality Violations. If at any time the Gas fails to meet the quality specifications enumerated herein, then the party receiving such Gas will notify the party delivering such Gas, and the delivering party will immediately correct such failure. If the delivering party is unable or unwilling to deliver Gas according to such specifications, the party receiving such Gas may refuse to accept delivery of Gas under the applicable Transportation Agreement for so long as such condition exists. (c) Amendment of Quality Provisions. Notwithstanding anything contained herein, Company reserves the right, at any time and from time to time, to unilaterally amend, on a nondiscriminatory basis, the quality specifications set forth above upon giving Customer at least 30 Days' prior written notice of any such change(s). 12. Additional Facilities If new or additional facilities or equipment are required or desirable, in Company's reasonable judgment, to effectuate the receipt or delivery of Gas under any Transportation Agreement, then Customer will reimburse Company, within ten Days from the date of receipt of Company's invoice, for any tap valves, metering facilities, meter equipment, pipelines, and associated equipment, and all labor, overhead expenses and applicable taxes, attributable to the installation of such equipment. If the invoiced amount is not paid when due, then Customer will pay interest at the lesser of 18% per annum or the lowest legal rate of interest (provided that if Customer is a State Agency, as defined in Section 2251.001 of the Texas Government Code, then Customer will pay interest in accordance with Texas Government Code Section 2251.025 or Section 2251.026, whichever is applicable). Failure of Company to receive total reimbursement within ten Days of Customer's receipt of Company's invoice, or such later date as prescribed by applicable law, will allow Company to suspend and/or terminate any Transportation Agreement with respect to the service requiring new or additional facilities. 13. Taxes (a) Reimbursement for Taxes. Customer will pay Company, by way of reimbursement, all Taxes paid by Company with respect to the transportation service and any other service provided under any Transportation Agreement, and that may be related to any associated facilities involved in the performance of any Transportation Agreement. If any such Taxes are paid by Company to any governmental authority that are calculated based upon the value of or price paid for the Gas transported under any Transportation Agreement, then Customer will notify Company of the purchase price of such Gas to enable Company to calculate and pay all such fees and taxes to appropriate governmental authorities in a timely manner. If Customer fails or refuses to notify Company of the purchase price of such Gas within 30 Days from the date the related transportation service is provided, then Company will estimate the purchase price of such Gas in accordance with the provisions of any applicable franchise ordinance, or, in the absence of such a franchise ordinance, Company will have the right to pay such fees and taxes and to be reimbursed by Customer based upon the Actual Gas Cost Incurred by Company, as defined in Rider GCR - Gas Cost Recovery, for the relevant period. In any event, Customer will indemnify Company for, and hold Company harmless from, any and all claims, demands, losses, or expenses, including attorneys' fees, which Company may incur as a result • -85- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 9 of 13 of Customer's failure or refusal to disclose the purchase price of Gas transported under any Transportation Agreement. (b) Definition of Taxes. The term 'Taxes" as used herein means all taxes and fees levied upon and/or paid by Company [other than ad valorem, capital stock, income or excess profit taxes (except as provided herein), general franchise taxes imposed on corporations on account of their corporate existence or on their right to do business within the state as a foreign corporation, and similar taxes], including, but not limited to, municipal franchise fees, and street and alley rental fees set out in franchise ordinances, street crossing agreements, or licenses. `Taxes" also includes any other taxes, fees, or charges levied, assessed, or made by any governmental authority on the revenue of Company under any Transportation Agreement, or the act, right, or privilege of selling, transporting, handling, or delivering Gas. Such taxes or fees are based upon the quantity, volume, heat content, value, sales price of the Gas, purchase price of the Gas, transportation fee payable under any Transportation Agreement, and any other fee, charge, cost reimbursement, tax reimbursement, or payment under any Transportation Agreement, including any applicable federal income tax imposed as a result of the reimbursement of the cost of the installation of facilities and equipment at the Delivery Point(s) or Receipt Point(s) under the terms of the applicable Transportation Agreement. (c) Sales and Use Tax. Texas sales and use tax will also be collected by Company on behalf of the State, as well as any other taxes required by law. However, Company will not collect the sales tax for the State if Customer provides Company with a valid sales tax exemption certificate. 14. Billina.Accounting, and Reports (a) Invoices. On approximately the 15th Day of each Month, Company will render to Customer a statement for the preceding Month showing the quantity of Gas delivered at the Receipt Point(s) and Delivery Point(s) during such preceding Month; the amount of compensation due to Company under the applicable Transportation Agreement, including tax reimbursement and any imbalance payments due under such Transportation Agreement; other reasonable and pertinent information that is necessary to explain and support the same; and any adjustments made by Company in determining the amount billed. (b) Payments. Customer will pay to Company, on or before the 10th Day after receipt of Company's statement (or such later date as prescribed by applicable law), the amount set forth in Company's statement. Notwithstanding anything contained in any Transportation Agreement, Company will have the right to require that all payments be made by wire transfer to: TXU Gas Company, Account# 08805016795, Chase Texas Bank, Dallas, Texas, ABA# 113000609. To assure proper credit, Customer should designate the company name, invoice number, and amount being paid in the Fedwire Text Section. If the amount contained in any statement is not paid when due, then Customer will pay interest at the lesser of 18% per annum or the lowest legal rate of interest (provided that if Customer is a State Agency, as defined in Section 2251.001 of the Texas Government Code, then Customer will pay interest in accordance with Texas Government Code Section 2251.025 or Section 2251.026, whichever is applicable, and if Customer is a federal Customer, then Customer will pay interest in accordance with applicable federal law); provided, however, no interest will accrue on unpaid amounts when failure to make payment is the result of a bona fide dispute between the parties regarding such amounts (and Customer timely pays all amounts not in dispute) unless and until it is ultimately determined that Customer owes such disputed amount, whereupon Customer will pay Company that amount, plus interest computed back to the original payment due date, immediately upon such determination. • (c) Audit. Each party will have the right at all reasonable times to examine the records of the other party to the extent necessary to verify the accuracy of any statement, charge, computation, or demand made under or pursuant to any of the provisions in any Transportation Agreement. If any such examination reveals any inaccuracy in such billing theretofore made, the necessary adjustments in such billing and payment will be made; provided, that no adjustments for any billing or payment will be made for any inaccuracy claimed after the lapse of 25 Months from the rendition of the invoice relating thereto. -86- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 10 of 13 (d) Credit-Worthiness. If the credit worthiness or financial responsibility of Customer should, in Company's reasonable opinion, ever become unsatisfactory, then Company will notify Customer and upon request by Company at any time and from time to time during the term of any applicable Transportation Agreement, Customer will deposit with Company: (i) such amount of money requested by Company, or (ii) a letter of credit in a form acceptable to Company from a financial institution acceptable to Company in an amount requested by Company, to guarantee the payment of statements and invoices under the applicable Transportation Agreement, as well as any possible imbalances under such Transportation Agreement. Upon the termination of the applicable Transportation Agreement, any money so deposited, less any amount due Company by Customer, will be refunded to Customer. 15. Responsibility Customer will be deemed to be in control and possession of the Gas transported under any Transportation Agreement and be responsible for, and will hold Company harmless from, any damage or injury caused thereby until the same has been delivered to Company at the Receipt Point(s) and after such Gas has been delivered at the Delivery Point(s), except for injuries and damages caused by the negligence or other fault of Company. Company will be in control and possession of the Gas transported under any Transportation Agreement and be responsible for, and will hold Customer harmless from, any damage or injury caused thereby after receipt of the Gas at the Receipt Point(s) and until such Gas has been delivered to Customer (or for its account) at the Delivery Point(s), except for injuries and damages caused by the negligence or other fault of Customer. 16. Title--Warranty& Indemnity Customer warrants to Company that at the time of delivery of Gas to Company under any Transportation Agreement Customer will have good title or the right to deliver such Gas, and that such Gas will be free and clear of all liens and adverse claims. Customer will indemnify Company, with respect to the Gas delivered by it, against all suits, actions, debts, accounts, damages, costs (including attorneys' fees), losses, and expenses arising from or out of any adverse claims of any and all persons to or against said Gas. Company warrants to Customer that Company will take no action to jeopardize Customer's title to the subject Gas. 17. Waiver of Breaches. Defaults, or Rights No waiver by either Customer or Company of any one or more breaches, defaults, or rights under any provisions of any Transportation Agreement will operate or be construed as a waiver of any other breaches, defaults, or rights, whether of a like or of a different character. By providing written notice to the other party, either party may assert any right not previously asserted under any Transportation Agreement or may assert its right to object to a default not previously protested. Except as specifically provided herein, in the event of any dispute under any Transportation Agreement, the parties will, notwithstanding the pendency of such dispute, diligently proceed with the performance of the applicable Transportation Agreement without prejudice to the rights of either party. Nothing contained in this paragraph will have the effect of waiving the applicable statute(s) of limitation. 18. Remedy for Breach Except as otherwise specifically provided in these Transportation Contract Terms and Conditions or any applicable Transportation Agreement, if either party fails to perform any of the covenants or • obligations imposed upon it in any Transportation Agreement (except where such failure is excused thereunder as a result of a force majeure event), then the other party may, at its option (without waiving any other remedy for breach), by notice in writing specifying wherein the default has occurred, indicate such parry's election to terminate the applicable Transportation Agreement by reason thereof; provided, however, that Customer's failure to pay Company within a period of ten Days following Customer's receipt of written notice from Company advising of such failure to make payment in full within the time specified -87- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 11 of 13 previously herein, will be a default that will give Company the right to immediately terminate the applicable Transportation Agreement, unless such failure to pay such amounts is the result of a bona fide dispute between the parties regarding such amounts under the applicable Transportation Agreement and Customer timely pays all amounts not in dispute. With respect to any other matters, the party in default will have 30 Days from receipt of such notice to remedy such default, and upon failure to do so, the applicable Transportation Agreement will terminate from and after the expiration of such 30-Day period. Such termination will be an additional remedy and will not prejudice the right of the party not in default to collect any amounts due it under the applicable Transportation Agreement for any damage or loss suffered by it and will not waive any other remedy to which the party not in default may be entitled for breach of the applicable Transportation Agreement. 19. Force Maieure (a) Suspension of Performance. In the event either party is rendered unable, wholly or in part, by an event of force majeure to carry out its obligations under any Transportation Agreement, except the obligation to pay monies due under such Transportation Agreement, on such party's giving notice and reasonably full particulars of such event of force majeure, in writing or by fax, to the other party within a reasonable time after the occurrence of the cause relied on, the obligations of the party giving such notice, so far as they are affected by such event of force majeure, will be suspended during the continuance of any inability so caused, but for no longer period, and such cause will, so far as possible, be remedied with all reasonable dispatch. (b) Definition of Force Majuere. The term "force majeure" as used herein, means acts of God; strikes, lockouts, or other industrial disturbances; acts of terrorism, acts of the public enemy, wars, blockades, insurrections, civil disturbances, riots, and epidemics; landslides, lightning, earthquakes, fires, storms, floods, and washouts; arrests, orders, directives, restraints, and requirements of the governr-ent and governmental agencies, either federal or state, civil or military; any application of governmental conservation or curtailment rules and regulations; explosions, breakage, or accident to machinery or lines of pipe; shutdowns of lines of pipe for inspection, maintenance, or repair; freezing of lines of pipe; and any other causes, whether of the kind enumerated or otherwise, not reasonably within the control of the party claiming suspension; provided, however, if Customer is an Electric Generation or Industrial Customer, then no failure of Customer's industrial facilities or power plant. will be considered a force majeure event. The settlement of strikes or lockouts will be entirely within the discretion of the party having the difficulty, and that the above reasonable dispatch will not require the settlement of strikes or lockouts by acceding to the demand of the opposing party when such course is, or is deemed to be, inadvisable or inappropriate in the discretion of the party having the difficulty. (c) Balancing Obligations Remain. Notwithstanding the foregoing, an event of force majeure will in no way terminate Customer's obligation to balance quantities of Gas under the applicable Transportation Agreement or make payment for quantities delivered prior to such event of force majeure. 20. Miscellaneous (a) Notices. All notices, requests, demands, statements, and payments provided for in any • Transportation Agreement must be given in writing directed to the party to whom given, and mailed to or delivered at such party's address set forth in the applicable Transportation Agreement or at such address as each party may by like notice give to the other. Such mailed notices will be deemed to have been given when deposited in the United States mail (first class, registered, or certified), postage prepaid, or in the case of hand delivery, when delivered to a representative of either party by a representative of the other party. Company may submit operational communications at the e-mail address set forth in the applicable Transportation Agreement and Customer will be responsible to monitor such e-mail address for any such communications frorn.Company. Any such communications sent by Company to such e-mail address will be deemed received by Customer when sent by Company unless Customer has previously notified Company in writing of any change to Customer's designated e-mail address. If Company's e-mail -88- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 12 of 13 system is not operational at the time an operational communication is to be sent, then Company may make the operational communication by utilizing any reasonable alternative means then available to Company, including, without limitation, electronic pager, telephone, facsimile, telegraph, etc., and such communication will satisfy the notice requirements of this paragraph. (b) Assignment. All Transportation Agreements will be binding upon and inure to the benefit of Customer and Company and their respective successors and assigns; provided, however, that no Transportation Agreement may be transferred or assigned by Customer without the prior written consent of Company, which consent will not be unreasonably withheld, and any purported transfer or assignment without such consent will be null and void and will not operate to release Customer's obligations under the applicable Transportation Agreement. (c) Entirety. Each Transportation Agreement, including any referenced rate schedules and attached exhibits, constitutes the entire agreement between Customer and Company covering the subject matter thereof, and there are no agreements, modifications, conditions, or understandings, written or oral, express or implied, pertaining to the subject matter thereof that are not contained therein. (d) Modifications. Modifications of any Transportation Agreement will be effective only upon the mutual execution of appropriate amendments thereto by duly authorized representatives of Customer and Company. (e) Headings. The captions or headings preceding the various parts of these Transportation Contract Terms and Conditions and any Transportation Agreement are inserted and included solely for convenience and will never be considered or given any effect in construing any Transportation Agreement or any part of any Transportation Agreement, or in connection with the intent, duties, obligations, or (ltiw liabilities of the parties. (f) Third-Parties. Each Transportation Agreement is entered into solely for the respective benefit of Company and Customer and nothing contained in any Transportation Agreement, either express or implied, will be interpreted or construed as conferring any rights, remedies, or claims under or in respect to any Transportation Agreement or any provision thereof upon any other person or entity, other than the successors or assigns of Customer and Company. (g) Joint Preparation. No provision of any Transportation Agreement is to be construed against or to be interpreted to the disadvantage of Customer or Company by any court or other governmental or judicial authority by reason of Customer or Company having or being deemed to have prepared, structured, or dictated such provision. (h) Confidentiality. Subject to the open records laws that may be applicable to Customer, Company and Customer will keep the terms and provisions of each Transportation Agreement confidential and not disclose them to any third parties. If disclosure is sought through process of a court, a government or a city, state, or federal regulatory agency, the party from whom disclosure is sought will resist disclosure through all reasonable means and will immediately notify the other party to allow it the opportunity to participate in such proceedings. However, Customer and Company will have the right to make such disclosures, if any, to governmental agencies and to their attorneys, auditors, accountants, and shareholders, who will in turn maintain its confidentiality. Company and Customer will cooperate to maintain confidentiality and to attempt to obtain a reasonable protective order or agreement to maintain that confidentiality under circumstances in which disclosure becomes necessary. (i) CHOICE OF LAW. EACH TRANSPORTATION AGREEMENT IS GOVERNED BY AND WILL BE CONSTRUED IN ACCORDANCE WITH LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF TEXAS OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS. ANY LAWSUIT INVOLVING ANY TRANSPORTATION AGREEMENT BROUGHT BY CUSTOMER OR COMPANY WILL BE BROUGHT ONLY IN DALLAS COUNTY, TEXAS, WHETHER SUCH LAWSUIT BE BROUGHT IN FEDERAL OR STATE COURT. NEITHER CUSTOMER NOR COMPANY MAY RAISE ANY DEFENSE OR OBJECTION OR FILE ANY MOTION BASED ON LACK OF PERSONAL JURISDICTION, -89- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 31 General Transportation Contract Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 13 of 13 IMPROPER VENUE, INCONVENIENCE OF THE FORUM, OR THE LIKE IN ANY CASE FILED IN A FEDERAL OR STATE COURT IN DALLAS COUNTY, TEXAS. Q) Counterparts. Any Transportation Agreement may be executed in any number of counterparts, each of which will be deemed to be an original and all of which will constitute one and the same agreement. (k) Service Regulations. Company's Service Regulations contained in Company's Tariff for Gas Service are applicable to all Customers receiving service under a Transportation Agreement, except to the extent there is a conflict between the applicable Transportation Agreement and Company's Service Regulations, in which case the provisions of the Transportation Agreement will control C C -90- TARIFF FOR GAS SERVICE TXU GAS COMPANY (Iire RATE SCHEDULE: 32 City Gate Transportation Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 3 1. Capitalized Terms Capitalized terms contained in these City Gate Transportation Terms and Conditions are defined in Company's General Transportation Contract Terms and Conditions. 2. Subject Matter Subject to the terms and conditions of the applicable Transportation Agreement, Company will receive Gas from Customer (or its designee) at the Receipt Point(s), will transport and store such Gas on a firm basis, and will deliver such Gas on a firm basis to Customer (or its designee) at the Delivery Point(s), provided such Gas is ultimately delivered to Customer's residential and commercial customers, as defined in Rate Schedule - Definitions, which are located on Customer's distribution system(s) inside the State of Texas, or used as lost and unaccounted for Gas on such distribution system(s). For the purposes of these City Gate Transportation Terms and Conditions, the term "firm" means that service will only be interrupted as a result of a force majeure event, as a result of Customer's non-performance under the applicable Transportation Agreement, or as allowed by the provisions of the applicable Transportation Agreement. 3. Downstream Responsibilities Customer will be solely responsible for: (i) all service requirements downstream of the Delivery Point(s), including, but not limited to, leak investigation, customer notifications(s), customer inquiries, repairs to facilities downstream of the Delivery Point(s), odorization, and for any other service requirement deemed to be the responsibility of a Gas distribution utility; (ii) constructing, operating, maintaining, and regulating all gas pipe and facilities downstream of the Delivery Point(s), (iii) ensuring that the construction, operation, regulation, and maintenance of all Gas pipe and facilities downstream of the Delivery Point(s) are at all times in compliance with all local, federal, and state laws, codes, and regulations, and (iv) any and all environmental matters (including, but not limited to, obtaining and providing all permits and regulatory and/or court approvals) related to Gas pipe or facilities downstream of the Delivery Point(s). Customer will be responsible for any and all liability related to Customer's failure to fulfill the above responsibilities. 4. Transportation and Storage Capacity (a) Capacity Rights. Customer will have the right to firm seasonal daily delivery capacity on Company's existing pipeline systems up to the Maximum Daily Quantities, and will have the right to firm seasonal hourly delivery capacity on Company's existing pipeline systems up to the Maximum Hourly Quantities, set forth in the applicable Transportation Agreement. The delivery capacities listed in the applicable Transportation Agreement for each seasonal period are intended to equal the maximum daily and hourly demand required by Customer from Company during each seasonal period. Customer may request a change in Customer's delivery capacities to be effective on the first Day of a calendar quarter during the term of the applicable Transportation Agreement. If Customer desires a change in Customer's delivery capacities effective on the first Day of such calendar quarter, Customer must notify Company, in writing, at least 30 Days prior to the first Day of such calendar quarter, and must provide new delivery capacity information to Company, as well as detail of the specific Delivery Point(s) at which such change is needed. Unless otherwise mutually agreed, the changed delivery capacities requested by Customer will become effective on the first Day of such calendar quarter and will never be less than the highest • daily and hourly quantities delivered under the applicable Transportation Agreement for the same period in the previous 24 Months, if daily and hourly delivery information is readily available, or the highest average daily and hourly quantities delivered under the applicable Transportation Agreement for the same period in the previous 24 Months. Any increase in daily and hourly delivery capacities will only become effective to the extent Company has firm capacity available to provide all of the requested increase. If Customer connects the facilities behind any Delivery Point to an energy delivery system other than Company, then the provisions of the applicable Transportation Agreement, including, but not limited -91- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 32 City Gate Transportation Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 of 3 to, daily and hourly delivery capacities, storage capacities, and related rights, imbalances, and imbalance resolutions will be adjusted with respect to such Delivery Point to account for the capacity available to Customer from the new energy delivery system. Company will not be required to establish new Delivery Point(s) or increase delivery capacity at an existing Delivery Point unless additional firm capacity is available on the portion of Company's system on which additional capacity is requested. (b) Overrun Capacity. In the event Customer requires capacity on a short-term basis in excess of Customer's then-applicable daily or hourly delivery capacities in order to maintain firm delivery service to its residential and commercial customers, Company will make available to Customer, upon request by Customer, on a pro rata basis with other City Gate Customers, any then existing interruptible capacity in the vicinity of the affected Delivery Point(s), but only to the extent that such interruptible capacity is necessary for Customer to maintain service to Customer's residential and commercial customers. (c) Projected Usage Profile. On or before October 1st of each year, Customer must furnish to Company an annual usage profile showing estimated total monthly quantities to be transported under each applicable Transportation Agreement during the following calendar year. In addition, on or before October 1st of each year, Customer must furnish to Company an estimate of peak day quantities to be transported under the applicable Transportation Agreement to each Delivery Point during the following calendar year. The annual usage profile will not be used to adjust daily or hourly delivery capacities under paragraph 4(a). (d) Storage Capacity. Customer will have the right to have up to the quantity of Gas identified on the applicable Transportation Agreement stored in Company's Primary and Secondary (hre Storage Facilities identified on the applicable Transportation Agreement. If changed levels of daily delivery capacities become effective under paragraph 4(a), then Customer's storage capacities, injection rights, and withdrawal rights will be increased in the same proportion as such change to Customer's daily delivery capacity. (e) Injection Rights. Customer will have the right to inject into storage under any applicable Transportation Agreement up to the maximum daily injection volumes set forth in the applicable Transportation Agreement. Simultaneous injection and withdrawal nominations will be allowed by Company if pipeline system operations and pressures permit. The actual operating capabilities of • Company's pipeline and storage facilities may allow for the maximum injection nominations set forth in the applicable Transportation Agreement to be waived, in whole or in part by Company, from time to time. Accordingly, Company may from time to time advise Customer of its daily operating conditions, and, to the extent permitted by such actual operating conditions, Customer may nominate volumes of Gas in excess of the maximums set forth in the applicable Transportation Agreement. (f) Withdrawal Rights. Customer will have the right to withdraw from storage under any applicable Transportation Agreement up to the maximum daily withdrawal volumes established in the applicable Transportation Agreement. Customer's withdrawal rights will be determined by the then- existing inventory of Customer's Gas in Primary and Secondary Storage Facilities as set forth in the applicable Transportation Agreement. Customer's total storage withdrawal nominations for any Day will not exceed the lesser of (i) 70% of Customer's estimated daily demand, or (ii) the maximum withdrawal based on Customer's inventory as set forth in the applicable Transportation Agreement. The actual operating capabilities of Company's pipeline and storage facilities may allow for the maximum withdrawal nominations set forth in the applicable Transportation Agreement to be waived, in whole or in part by • Company, from time to time. Accordingly, Company may from time to time advise Customer of its daily operating conditions, and, to the extent permitted by such actual operating conditions, Customer may nominate volumes of Gas in excess of the maximums set forth in the applicable Transportation Agreement. C -92- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 32 City Gate Transportation Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 3 of 3 5. Gas Supply Sourcing (a) Sourcing of Supply. Due to the location of Customer's Delivery Point(s) and Company's storage facilities and the operational requirements of Company's pipeline, it is necessary for Customer to source certain quantities of its Gas supply in proximity to the Delivery Point(s) and storage facilities under the applicable Transportation Agreement in order for Company to provide firm transportation delivery and storage service thereunder. In order to meet Customer's market and storage requirements, Company and Customer will coordinate in a timely manner to ensure adequate Gas supplies are available in certain geographic operational areas. In the event of force majeure on Company's pipeline system such that service to Customer's residential and commercial customers may be interrupted, Company will make additional interruptible pipeline capacity available to Customer, to the extent then available, on any segment of Company's system if such action would minimize or eliminate firm service interruption. (b) Storage Supply. In order for Company to provide firm transportation service under any Transportation Agreement it may be necessary, from time to time, for Customer to source a portion of its Gas supply from its Gas inventory in Company's storage facilities. Customer's minimum requirements to source its Gas from storage, if any, will be set forth in the applicable Transportation Agreement. The actual operating capabilities of Company's pipeline and storage facilities may allow for the minimum withdrawal requirements set forth in the applicable Transportation Agreement to be waived, in whole or in part, from time to time. In that regard, Company may from time to time advise Customer of its daily operating conditions, and, to the extent permitted by such actual operating conditions, Customer may nominate volumes of Gas less than the minimums set forth in the applicable Transportation Agreement. C C -93- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 33 Pipeline/Distribution Transportation Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 of 2 1. Capitalized Terms Capitalized terms contained in these Pipeline/Distribution Transportation Terms and Conditions are defined in Company's General Transportation Contract Terms and Conditions. 2. Subject Matter Subject to the terms and conditions of the applicable Transportation Agreement, Company will receive Gas from Customer (or its designee) at the Receipt Point(s), will transport such Gas, and will deliver such Gas to Customer (or its designee) at the Delivery Point(s), provided such gas is ultimately used at Customer's industrial facilities or power plant, unless otherwise agreed by Company. In no event will the transportation provided under any Transportation Agreement be used to satisfy any part of Customer's needs that could be classified as "Commercial," under Company's customer classification criteria, unless otherwise agreed by Company. 3. Priority of Service (a) Interruptible Service. Company's receipt and delivery of all gas quantities under the applicable Transportation Agreement will be on a wholly interruptible basis and subject to: (i) the most efficient and economic utilization of Company's pipeline capacity as determined by Company in its sole discretion, (ii) pipeline capacity necessary to serve existing or future sales customers under tariffs filed with applicable regulatory authorities, (iii) the provisions of Company's curtailment program approved by the applicable Regulatory Authority, and (iv) the other terms and conditions contained in the applicable Transportation Agreement. (b) Curtailment and Interruption. When notified by Transporter to do so, Customer will curtail, interrupt, reduce, limit, terminate, or discontinue the use of Gas transported under the applicable Transportation Agreement in conformity with the service priority provided for herein. In the event of any curtailment, interruption, reduction, limitation, termination, or discontinuation of service under any Transportation Agreement, Company personnel may enter Customer's premises and physically turn off the Gas or reduce the quantity of Gas serving Customer's industrial facilities or power plant, and no one other than Company's personnel will thereafter be permitted to increase the quantity of Gas or turn the Gas back on. (c) Customer's Indemnification in Event of Curtailment or Interruption. Customer assumes any and all risks, including, but not limited to, lost profits, damaged or destroyed facilities, lost or damaged production, damaged or destroyed machinery and/or equipment, and the failure of a facility of Customer and/or Customer's business due to a curtailment, interruption, reduction, limitation, termination, or discontinuation of Customer's transportation under any Transportation Agreement. Customer will indemnify and hold Company harmless from and against any and all damages, costs, losses, and expenses (including reasonable attorneys' fees) that may be sustained by Customer due to any claim, demand, suit, or action brought against Company (whether or not the claim, demand, suit, or action is found to be valid) by any person or entity arising out of, resulting from, or connected, in whole or in part, with, a curtailment, interruption, reduction, limitation, termination, or discontinuation of the transportation of Gas under the terms of any Transportation Agreement. 4. Plant Protection Service and Firm Electric Load Quantities (a) If Customer is an Industrial Customer, then Customer may elect to receive Plant Protection transportation quantities during each Day during the term of any Transportation Agreement by specifying the applicable Plant Protection Quantity in the applicable Transportation Agreement. Customer will pay to Company,for Plant Protection transportation service, a monthly charge calculated by multiplying the Plant Protection Quantity specified in the applicable Transportation Agreement times the number of Days in the billing Month times the Monthly Charge in the first block, entitled "First 0 MMBtu to 1,500 MMBtu," under Rate Schedule T - Transportation effective where the Delivery Point is located, whether such quantities of Gas are actually transported by Customer or not. The term "Plant Protection" -94- TARIFF FOR GAS SERVICE TXU GAS COMPANY RATE SCHEDULE: 33 Pipeline/Distribution Transportation Terms and Conditions APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 of 2 has the meaning set forth in,the Order in Gas Utilities Docket No. 496. For measurement, accounting, and billing purposes, if Customer has elected to receive Plant Protection transportation service, the last quantities of Gas delivered each Day under the applicable Transportation Agreement will be deemed to be Plant Protection transportation Gas. (b) If Customer is an Electric Generation Customer, then Customer may elect to receive Firm Electric Load Quantities during each Day during the term of any Transportation Agreement by specifying the applicable Human Use Needs Quantity in the applicable Transportation Agreement. Customer will pay to Company, for Human Use Needs transportation service, a monthly charge calculated by multiplying the Human Use Needs Quantity specified in the applicable Transportation Agreement times the number of Days in the billing Month times the Monthly Charge in the first block, entitled "First 0 • MMBtu to 1,500 MMBtu," under Rate Schedule T - Transportation effective where the Delivery Point is located, whether such quantities of Gas are actually transported by Customer or not. The term "Firm Electric Load Quantity" means the quantity of Gas that qualifies for an exemption form curtailment under the "emergency exemption" paragraph in the Order in Gas Utilities Docket No. 496. For measurement, accounting, and billing purposes, if Customer has elected to receive Human Use Needs transportation service, the last quantities of Gas delivered each Day under the applicable Transportation Agreement will be deemed to be Human Use Needs transportation Gas. • -95- VIII. CURTAILMENT ORDER L TARIFF FOR GAS SERVICE TXU GAS COMPANY L, RATE SCHEDULE: 34 Curtailment Order APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 1 OF 2 VIII. CURTAILMENT ORDER: Curtailment Priorities The following curtailment priorities in descending order will be observed on Company's pipeline system: A. Residential, hospitals, churches, schools, and other human needs customers. B. Industrial and Commercial Customers in the following descending order: (1) Small commercial (less than 100 Mcf on a peak day). (2) Large commercial (100 Mcf or more on a peak day) and industrial requirements for pilot lights and plant protection gas. (3) Small industrial (less than 3,000 Mcf on an average day) requirements for feedstock and process gas needs. (4) Large industrial (3,000 Mcf or more on an average day) requirements for feedstock and process gas needs. (5) All industrial requirements not specified in priorities B(3), (4), or(6) or F. (6) (a) Boiler fuel and other indirect flame applications (300 Mcf or less on an average day) with alternate fuel capabilities. (b) Boiler fuel and other indirect flame applications (more than 300 Mcf) on an average day and less than 3,000 Mcf on an average day) with alternate fuel capabilities. (c) Boiler fuel and other indirect flame applications (3,000 Mcf or more on an average) with alternate fuel capabilities. C. Legacy Public School rate customers. D. Agricultural Irrigation F. Large volume industrial sales and transport customers [need to define]. Electric Utility Customer Emergency Exemption Any electric utility customer served by TXU Gas Company will be entitled to sufficient natural gas to avoid the shedding of firm electric load upon a sworn verified statement to TXU Gas that: (1) the utility faces an emergency situation that would require the shedding of firm electric loads unless an emergency exemption from curtailment is granted in sufficient quantities to avoid shedding firm electric loads; (2) the utility has no alternate fuel capability, (3)the utility has exhausted all purchased power opportunities; (4)the utility has utilized all alternative sources of power; and (5) the utility will accept reduced deliveries, as soon as possible thereafter,to replace the volumes taken during the emergency exemption from curtailment. Definitions (1) RESIDENTIAL- Service to customers which consist of direct natural gas usage in a residential dwelling for space heating, air conditioning, cooking, water heating, and other residential uses, to the extent that such gas consumption occurs within a single dwelling unit. C„ (2) COMMERCIAL- Service to customers engaged primarily in the sale of goods or services including institutions and all government agencies for uses other than those involving manufacturing, electrical generation, or boiler fuel. -96- TARIFF FOR GAS SERVICE TXU GAS COMPANY CRATE SCHEDULE: 34 I Curtailment Order(se APPLICABLE TO: Entire System REVISION: 0 DATE: EFFECTIVE DATE: PAGE: 2 OF 2 (3) INDUSTRIAL- Service to customers engaged primarily in.a process that creates or changes raw or unfinished materials into another form or product excluding the generation of electrical power. (4) FEEDSTOCK GAS - Gas used for its chemical properties of natural gas as a raw material in creating an end product. (5) PROCESS GAS- Gas use for which alternate fuels are not technically feasible such-as in applications requiring precise temperature controls and precise flame characteristics. (6) BOILER FUEL- Is considered to be natural gas used as a fuel for the generation of steam or electricity, including the utilization of gas turbines for the generation of electricity. (7) ALTERNATE FUEL CAPABILITIES-Where an alternate fuel could have been utilized and not whether the facilities for such use have actually been installed. Propane is excluded as an alternate fuel. (8) PLANT PROTECTION GAS-The minimum gas required to prevent physical harm to the plant facilities or danger to plant personnel when such protection cannot be afforded through the use of an alternate fuel. This includes the protection of such material in process as would otherwise be destroyed, but shall not include deliveries required to maintain plant production. C C -97- Page 1 of 1 TXU GAS FOR THE TEST YEAR ENDED DECEMBER 31,2002 (10: TABLE OF CONTENTS OVERALL COST OF SERVICE SUMMARY Schedule A: Cost of Service A: Cost of Service Summary A-1: Overall Cost of Service TXU GAS—DISTRIBUTION Section I: Overall Cost of Service Summary Section II: Historic Test Year Data Section III: Rate Design TXU GAS—PIPELINE Section I: Overall Cost of Service Summary Section II: Historic Test Year Data Section III: Rate Design C Note: Totals may vary due to rounding. Schedule A Page 1 of 1 TXU GAS L. COST OF SERVICE SUMMARY FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G.L.GOBLE AND R.K.PRUETT Line Present Proposed Proposed No. Description Rates Rates Increase Percent Increase (a) (b) (c) (d) (e) 1 Operating Revenues 2 Residential $ 559,242,426 $ 615,166,669 $ 55,924,243 10.00 3 Commercial 283,397,890 289,846,989 6,449,099 2.28 4 Industrial/Transportation 48,237,172 48,237,172 - - 5 Pipeline Transportation 25,556,087 25,556,087 - - 6 Total $ 916,433,574 $ 978,806,916 $ 62,373,342 6.81 7 8 Other Operating Revenues 44,109,899 51,260,868 7,150,969 16.21 9 Total Operating Revenues $ 960,543,473 $ 1,030,067,784 $ 69,524,311 7.24 10 11 12 Total Revenue Requirement 13 Operating Expenses 14 15 Gas Cost-Commodity $ 459,393,661 16 17 Operation and Maintenance Expenses 249,232,711 18 19 Taxes Other than Income Taxes 81,672,585 20 Cr 21 Depreciation and Amortization Expense 77,697,243 22 23 Interest on Customer Deposits 1,472,587 24 Interest on Customer Advances 8,517 25 26 Federal Income Taxes 40,031,742 27 28 Return on Rate Base 120,558,737 29 30 Total Revenue Requirement $ 1,030,067,784 C o m o m e .- c n n ID U) 0) N n 0o p) CO CO e CO .- CO o n e C7 CO 0) L al N- CO n.NCO Cn to M e n n NO (1100.'fr CJa CO To n (hNt�NON n O W CIS CO oco C9 N CO a CO N. e O t0 m H v O e N N- CO CO COO N Ci 0 m W V) V! 69 Vl IA 69 Q r . . . . m U) C'O)_ o o co _ N CO N C ai ES e') cco n 0 0. e u) co 0 e n is ' E E o) o) Sri r- ci CCOi .-) co 0 m Q CO a. 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FOR THE TEST YEAR ENDED DECEMBER 31,2002 TABLE OF CONTENTS SECTION I: OVERALL COST OF SERVICE SUMMARY Schedule A: Cost of Service A(D): Cost of Service Summary A-1 (D): Overall Cost of Service SECTION II: HISTORIC TEST YEAR DATA Schedule B: Rate Base B (D): Total Rate Base B-1 (D): Net Plant Investment B-1.1 (D): Distribution Plant Investment B-1.2 (D): General Plant Investment Schedule C: Original Cost of Plant C-1 (D): Original Cost of Distribution Utility Plant C-2 (D): Original Cost of General Plant C-3 (D): Total Construction Work in Progress C-3.1 (D): Construction Work in Progress-Distribution Plant C-3.2 (D): Construction Work in Progress-General Plant Schedule D: Depreciation D-1 (D): Accumulated Depreciation of Distribution Utility Plant D-2 (D): Accumulated Depreciation of General Plant D-3 (D): Total Retirement Work in Progress D-4 (D): Comparison of Current and Proposed Pro Forma Depreciation Expense D-5 (D): Depreciation Study Rate Summary Schedule E: Other Rate Base Items E (D): Summary of Other Rate Base Items E-1 (D): Materials&Supplies E-2 (D): Prepayments E-3 (D): Customer Deposits and Associated Interest Expense E-4 (D): Construction Advances E-5(D): Provision for Injuries and Damages E-6 (D): Safety Compliance Program Costs E-7 (D): Income Tax Adjustments E-7.1 (D): Accumulated Deferred Federal Income Taxes L Page 2 of 3 TXU GAS—DISTRIBUTION (thi.„ FOR THE TEST YEAR ENDED DECEMBER 31,2002 TABLE OF CONTENTS E-7.2 (D): Investment Tax Credit E-8 (D): Cash Working Capital E-9 (D): Working Gas In Storage Schedule F: Revenue Data F-1 (D): Operating Revenues Schedule G: Expense Data G-1 (D): Other Gas Supply Expense G-2 (D): Operation And Maintenance Expenses G-3 (D): Labor Expense G-3.1 (D): Labor Expense G-4 (D): Non-Labor Expense G-4.1 (D): Non-Labor Expense G-5 (D): Operation and Maintenance Expense Adjustment Summary G-5.1 (D): Advertising Expense Adjustment G-5.2 (D): Contributions and Donations Expense Adjustment G-5.3 (D): Social Club Dues Adjustment G-5.4 (D): Legislative Advocacy Adjustment G-5.5 (D): Miscellaneous Account Revisions Adjustment G-5.6 (D): Insurance Premiums Adjustment G-5.7 (D): Pension & Benefit Expense Adjustment G-5.8 (D): Pipeline Integrity Program Adjustment G-5.9 (D): WINS-TXU Business Services Cost Reduction Adjustment G-5.10 (D): WINS-TXU Business Services Regulatory Asset Adjustment G-5.11 (D): WINS Related (Oncor) Reduction Adjustment G-5.12 (D): Account Reclassifications/Adjustments G-6 (D): Taxes Other Than Income Taxes G-7(D): Test Year Federal Income Taxes and Requested Federal Income Taxes G-8 (D): Excluded Operating Expenses G-9 (D): Operation and Maintenance Expenses-Pipeline Costs Schedule H: Financial Statements H-1 (D): Operating Income Statement H-2 (D): Trial Balance Schedule I: Return on Invested Capital I (D): Summary of Return L Page 3 of 3 TXU GAS—DISTRIBUTION (11we FOR THE TEST YEAR ENDED DECEMBER 31,2002 TABLE OF CONTENTS SECTION III: RATE DESIGN Schedule J: Key Operating Statistics J-1 (D): Summary of Adjustments for Test Year Customers and Volumes Schedule K: Class Cost of Service Analysis K-1 (D): Summary K-2 (D): Allocation of Rate Base K-3 (D): Allocation of Revenues K-4 (D): Allocation of Expenses K-5 (D): Data Summary K-6 (D): Development of Allocation Factors K-7 (D): Classification of Mains Investment Schedule L: Rate Design L-1 (D): Rate Design Calculation L-2 (D): Calculation of Service Charge Revenue L-2a (D): Calculation of Service Charge Revenue L-3 (D): Summary Proof of Revenue at Proposed Rates L, Note: Totals may vary due to rounding. L Schedule A(D) Paget of 1 coo. TXU GAS—DISTRIBUTION COST OF SERVICE SUMMARY FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G.L.GOBLE AND R.K.PRUETT Line Present Proposed Proposed Percent No. Description Rates Rates Increase Increase (a) (b) (c) (d) (e) 1 Operating revenues 2 Residential $ 559,242,426 $ 615,166,669 $ 55,924,243 10.00 3 Commercial 283,397,890 289,846,989 6,449,099 2.28 4 Industriat/Transportation 48,237,172 48,237,172 - 5 Total $ 890,877,488 $ 953,250,829 $ 62,373,342 7.00 6 Other Revenues 10,732,459 17,625,168 6,892,709 6422 7 8 Total Operating Revenues $ 901,609,947 $ 970.875.997 $ 69,266.050 7.68 9 10 11 12 13 14 Total Revenue Requirement 15 Operating Expenses 16 Gas Cost 17 Commodity Costs $ 459,393,661 18 Total Gas Cost $ 459,393,661 19 20 Operation and Maintenance Expense-Pipeline Costs $ 75,421,018 21 Operation and Maintenance Expenses 176,419,172 22 23 Taxes Other than Income Taxes 74,279,978 (111W. 24 25 Depreciation and Amortization Expense 61,921,258 26 27 Interest on Customer Deposits 1,472,587 28 Interest on Customer Advances 8,517 29 30 Federal Income Taxes 30,362,026 31 32 Return on Rate Base 91.597,779 33 34 Total Revenue Requirement $ 970,875,997 C 0-5 "" O ce Q m m 0, '=O a CA O n co N co I, Os CO N U) CO O)I m N CO CO CD CI n U) CD nO O N nL CO . 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E CO CIZ a a•s CC LI-( igie CO 0 W u be 49 to 49 M N CtnZm u I V W C 0 0 0 0 0 0 0 0 0 O Q ..) a W O „ ,_ '- 01N < C7 Q CO n 0Q » • LLLL C7C7C70 W W C7 C7 0 W 0 CC NN M NONvmrCnO N Ct a N F- co N CO m if/v_CO N CO LO 1, U) N N O W Z O N N ' 0 CO N CD O N U) _ O co CO co "0' C9 N N n COO) CON CA U) etC7 In R n U) N CO n Ha O • U) O) U) R CO N U). R O N. U) -itN Q co N Of 0 U) CO CO V 0 m uIi u) co Lt. 49 09 49 49 69 69 CO CO 0 0 m •c TD O. d m 4) C C G CD CD X m m p O. O.W y m LWa 0C g 'm U g 0 m V ~ rc OV o V a a W m O a CCN .6Eh m oO0 C C Q O y m a) in ` cma) c c E L. a) g E m a)g • H ¢ H E C H N L W m N co • c C1 & CjcCcQ000 CXm E m Q y m g PI W CO CO C C 0 C C Zr) fa C !a 10 V Q CA CO m CA C/) 0 O !� O O O m W C C m om 0 •� r, % awmmm Dm co-Om E t m m m a) m m )C la l0 U m 7 O ¢S 1 O ea 0000E= Fm- zLL 15 kise • C 0 .- N f7 Y U) tO h co 0) O •- N M Q U) t0 h aD O O N C7 < U)CO J Z CM N N N N N N Schedule B(D) (or, Page 1 of 1 TXU GAS—DISTRIBUTION TOTAL RATE BASE AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line Amount per No. Description Reference Books Adjustment Total Requested (a) (b) (c) (d) (e) 1 Net Plant in Service 2 Distribution Plant in Service $ 1,041,341,681 $1.041.341.681 3 General Plant B-1 (D) 37,843.761 37.843,761 4 Net Gas Distribution Plant in Service $ 1.079,185,442 $ - $1,079,185.442 5 6 Investment Additions: 7 Regulatory Asset-Safety Compliance Program E D $ 42,982,796 $ 42,982,796 8 Working Capital 9 Working Cash Allowance (53,763,162) (53,763,162) 10 Materials&Supplies E(D) 3,859,290 3,859,290 11 Prepayments 11,911,827 11,911,827 12 Working Gas in Storage 98.182,654 98.182,654 13 Total Investment Additions $ 103,173,405 $ - $ 103,173,405 14 15 Investment Deductions 16 17 Customer Deposits $ 24,590,346 $ 24,590,346 18 Customer Advances for Construction E(D) 456,094 456,094 19 Injuries and Damages Reserve 1,284,500 1,284,500 20 Income Tax Adjustments 137,304,761 137.304,761 21 Total Investment Deductions $ 163,635,701 $ $ 163,635.701 22 23 Total Rate Base $ 1,018,723,146 $ $1,018,723,146 L Schedule B-1 (D) Page 1 of 1 TXU GAS—DISTRIBUTION (1,.... NET PLANT INVESTMENT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Adjusted NARUC Capitalized Accumulated Line No. Account Description Reference Balance Depreciation Net Book Value (a) (b) (c) (d) (e) (f) 1 Distribution Plant in Service-Net Investment 2 37401 Land $ 252,301 $ - $ 252,301 3 37402 Land Rights 2,410,653 816,272 - 1,594,381 4 375 Structures&Improvements 1,066,957 863,897 203.060 5 376 Mains 953,061,639 288,384,692 664,676,947 6 378 M&R Station Equipment-General B-1.1 (D) 14,165,309 7,907,133 6.258,176 7 379 M&R Station Equipment-City Gate 4,827,960 2,378,756 2,449,204 8 380 Services 427,901,457 149,615,263 278,286,194 9 381 Meters 126,411,313 54,584,799 71,826,514 10 383 House Regulators 25,039,738 9,244.834 15,794,904 11 Total Distribution Plant $ 1,555.137,327 $ 513,795.646 $ 1,041,341,681 12 13 General Plant-Net Investment 14 303 Computer Software $ 25,332,809 $ 10,012,157 $ 15,320,652 15 389 Land 1,632,151 - $ 1,632,151 16 390 Structures&Improvements 16,675,660 6,477,175 10,198,485 17 391 Office Furniture&Equipment 6,795,128 6,162,031 633,097 18 392 Transportation Equipment 13,180,344 11,591,933 1,588,411 19 394 Tools,Shop,and Garage Equipment - - - 20 396 Power Oper.Tool&Work Equipment B-1.2(D) 7,060,485 7,032,129 28,356 21 397 Radio Communication Equipment 3,412,702 3,177,041 235,661 22 398 Miscellaneous Equipment 14,807,532 11,412,741 3,394,791 23 399 Non-Mainframe Computer Equipment 2,000,752 1,467,244 533,508 (..... 24 $ 90,897,563 $ 57,332,451 $ 33,565,112 25 Meter Shop Inventory 4,278,649 4,278,649 26 Total General Plant $ 95,176.212 $ 57,332.451 $ 37,843,761 27 28 Total Net Plant I Lme 1 1+Line 26_1$ 1,650,313,539 $ 571,128,097 $ 1,079,185,442 L. Schedule 8-1.1(D) Page 1 of 1 TXU GAS—DISTRIBUTION (Ile DISTRIBUTION PLANT INVESTMENT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Adjusted NARUC Amount Per Capitalized Line No. Account Description Reference Books Adjustments Balance (a) (b) (c) (d) (e) (t) 1 Plant in Service 2 Distribution Plant-Cost 3 37401 Land $ 252,301 $ - $ 252,301 4 37402 Land Rights 2,410.653 - 2,410.653 5 375 Structures&Improvements 1,066,957 - 1,066.957 6 376 Mains 948,435,267 4,626,372 953,061,639 7 378 M&R Station Equipment-General 14,159,772 5,537 14,165,309 8 379 M&R Station Equipment-City Gate C-1(D) 4,827,960 - 4,827,960 9 380 Services 426,621,937 1.279.520 427,901,457 10 381 Meters 126,410,013 1,300 126,411,313 11 383 House Regulators 25.039,738 - 25,039,738 12 Total Distribution Plant Original Cost $ 1.549.224,598 $ 5.912,729 $1.555,137,327 13 14 Distribution Plant-Accumulated Depreciation 15 37401 Land $ - $ - $ - 16 37402 Land Rights 816,272 - 816,272 17 375 Structures&Improvements 863,897 - 863,897 18 376 Mains 288,384,692 - 288,384,692 19 378 M&R Station Equipment-General D-1(D) 7,907,133 - 7,907,133 20 379 M&R Station Equipment-City Gate 2,378,756 - 2,378,756 21 380 Services 149,615,263 - 149,615,263 22 381 Meters 54,584,799 - 54,584,799 23 383 House Regulators 9.244,834 - 9,244,834 24 Total Distribution Accumulated Depreciation $ 513,795,646 $ - $ 513,795.646 25 tie 26 Distribution Plant-Net 27 37401 Land $ 252,301 $ $ 252,301 28 37402 Land Rights 1,594,381 1,594,381 29 375 Structures&Improvements 203,060 - 203,060 30 376 Mains Lines 3-11 660,050,575 4,626,372 664,676,947 31 378 M&R Station Equipment-General minus 6,252,639 5,537 6258,176 32 379 M&R Station Equipment-City Gate Line2s315 2,449,204 - 2,449,204 33 380 Services 277,006,674 1,279,520 278,286,194 34 381 Meters 71,825,214 1,300 71,826,514 35 383 House Regulators 15,794,904 - 15,794,904 36 Total Net Distribution Plant $1,035,428,952 $ 5,912,729 $1,041,341,681 L Schedule B-1.2(D) Page 1 of 1 TXU GAS—DISTRIBUTION (Mor''' GENERAL PLANT INVESTMENT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON NARUC Line No. Account Description Reference Amount Per Books Adjustments Adjusted Balance (a) (b) (c) (d) (e) (I) 1 Plant in Service 2 General Plant-Cost 3 303 Computer Software $ 25,331,191 $ 1,618 $ 25,332,809 4 389 Land 1,824,731 (192,580) 1,632,151 5 390 Structures&Improvements 16,291,802 383,858 16,675,660 6 391 Office Furniture&Equipment 6,789,628 5,500 6,795,128 7 392 Transportation Equipment 13,180,344 - 13,180,344 8 394 Tools,Shop,and Garage Equipment - - - 9 396 Power Oper.Tool&Work Equipment C-2(D) 7,060,208 277 7,060.485 10 397 Radio Communication Equipment 3,332,618 80,084 3,412,702 11 398 Miscellaneous Equipment 14,734,742 72,790 14,807,532 12 399 Non-Mainframe Computer Equipment 2,000,752 - 2.000.752 13 $ 90,546,016 $ 351,547 $ 90,897,563 14 Meter Shop Inventory 4,278,649 - 4.278.649 15 Total $ 94,824,665 $ 351,547 $ 95,176.212 16 17 General Plant- Accumulated Depreciation 18 303 Computer Software $ 10,012,157 $ - $ 10,012,157 19 389 Land - - - 20 390 Structures&Improvements 6,477,175 - 6,477,175 21 391 Office Furniture&Equipment 6,162,031 - 6,162,031 22 392 Transportation Equipment 10,733,731 858.202 11,591,933 23 394 Tools,Shop,and Garage Equipment - - - 24 396 Power Oper.Tool&Work Equipment D-2(D) 7,032,129 - 7,032,129 25 397 Radio Communication Equipment 3,177,041 - 3,177,041 26 398 Miscellaneous Equipment 11,412,741 - 11,412,741 (IOW 27 399 Non-Mainframe Computer Equipment 1,467,244 1,467,244 29 $ 56,474,249 $ 858,202 $ 57,332,451 29 Meter Shop Inventory - 30 Total $ 56,474.249 $ 858.202 $ 57.332,451 31 32 General Plant-Net Investment 33 303 Computer Software 15,319,034 1,618 15,320,652 34 389 Land $ 1,824,731 $ (192,580) $ 1,632,151 35 390 Structures&Improvements 9,814,627 383,858 10,198,485 36 391 Office Furniture&Equipment 627,597 5,500 633,097 37 392 Transportation Equipment 2,446,613 (858,202) 1,588,411 38 394 Tools,Shop,and Garage Equipment Lines 3-15 - - - 39 396 Power Oper.Tool&Work Equipment minus Lines 28,079 277 28,356 40 397 Radio Communication Equipment 18-30 155,577 80,084 235,661 41 398 Miscellaneous Equipment 3,322,001 72,790 3,394,791 42 399 Non-Mainframe Computer Equipment 533.508 - 533.508 43 $ 34,071,767 $ (506,655) $ 33,565,112 44 Meter Shop Inventory 4,278,649 - 4,278,649 45 Total $ 38,350,416 $ (506.655) $ 37,843,761 L Schedule C-1 (D) Page 1 of 1 TXU GAS—DISTRIBUTION ORIGINAL COST OF DISTRIBUTION UTILITY PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line NARUC Adjustments No. Account Description Capitalized Cost (Note 1) As Adjusted (a) (b) (c) (d) (e) 1 Distribution Plant in Service-Original Cost 2 37401 Land $ 252,301 $ - $ 252,301 3 37402 Land Rights 2,410,653 - 2,410,653 4 375 Structures&Improvements 1,066,957 - 1,066,957 5 376 Mains 948,435,267 4,626,372 953,061,639 6 378 M&R Station Equipment-General 14,159,772 5,537 14,165,309 7 379 M&R Station Equipment-City Gate 4,827,960 - 4,827,960 8 380 Services 426,621,937 1,279,520 427,901,457 9 381 Meters 126,410,013 1,300 126,411,313 10 383 House Regulators 25,039,738 - 25,039,738 11 Total Distribution Plant Original Cost $ 1,549,224,597 $ 5,912,730 $ 1,555,137,327 12 13 14 Note 1: Adjustments include the following. Please see the workpapers for 15 specific detail about each adjustment. 16 17 Cost of projects under construction as of December 31,2002 18 which were completed by March 31,2003 C-3(D) $5,912,729.61 C L Schedule C-2(D) Page 1 of 1 (liw TXU GAS—DISTRIBUTION ORIGINAL COST OF GENERAL PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON NARUC Amount per Adjustments Line No. Acct Description Books (Note 1) As Adjusted (a) (b) (c) (d) (e) 1 General Plant 2 303 Computer Software $25,331,191 $ 1,618 $25,332,809 3 389 Land 1,824,731 (192,580) 1,632,151 4 390 Structures&Improvements 16,291,802 383,858 16,675,660 5 391 Office Furniture&Equipment 6,789,628 5,500 6,795,129 6 392 Transportation Equipment 13,180,344 - 13,180,344 7 394 Tools,Shop,and Garage Equipment - - 8 396 Power Oper.Tool&Work Equip. 7,060,208 277 7,060,485 9 397 Radio Communication Equipment 3,332,618 80,084 3,412,702 10 398 Miscellaneous Equipment 14,734,742 72,790 14,807,532 11 399 Non-Mainframe Computer Equip. 2,000,752 - 2,000,752 12 Total General Plant $90,546,016 $ 351,548 $90,897,564 13 14 Meter Shop Inventory $ 4,278,649 $ - $ 4,278,649 15 16 Total General Plant and Meter Shop Inventory $94,824,665 $ 351,548 $95,176,213 17 18 19 Note 1: Adjustments include the following. Please see the workpapers for (1111ow 20 specific detail about each adjustment. 21 22 Cost of projects under construction as of December 31,2002 23 which were completed by March 31,2003 C-3(D) $351,547.71 Schedule C-3(D) Page 1 of 1 Lir TXU GAS—DISTRIBUTION TOTAL CONSTRUCTION WORK IN PROGRESS AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line No. Description Total (a) (b) 1 Total CWIP per Books $ 24,327,576 2 3 Less: 4 Adjustment for Completed Construction- Distribution Plant(Note 1) 5,912,730 5 Adjustment for Completed Construction- General Plant(Note 1) $ 351,548 6 Adjusted Total CWIP 18,063,298 7 8 Adjusted CWIP Included in Rate Base (0%) - 9 10 Note 1: See the workpapers for Schedule C-3 (D)for detail of 11 Completed Construction by Account L C Schedule C-3.1 (D) Page 1 of 1 TXU GAS—DISTRIBUTION (larr CONSTRUCTION WORK IN PROGRESS-DISTRIBUTION PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Workpape Line NARUC r No. Acct. Description Reference Amount (a) (b) (c) (d) 1 Distribution Plant Construction Completed 2 Projects (as of January 31, 2003) 3 37401 Land 4 37402 Land Rights 5 375 Structures& Improvements 6 376 Mains WPC- $ 4,626,372 7 378 M&R Station Equipment-General 3 1/1(D) 5,537 8 379 M&R Station Equipment-City Gate 9 380 Services 1,279,520 10 381 Meters 1,300 11 383 House Regulators 12 Total Completed Distribution CWIP $ 5,912,730 13 14 Distribution Plant Construction Uncompleted (IIliw 15 Work in Progress 16 37401 Land 17 37402 Land Rights $ 555 18 375 Structures&Improvements 6,896 19 376 Mains WP/C- 7,931,062 20 378 M&R Station Equipment-General 3 1h (D) 17,029 21 379 M&R Station Equipment-City Gate 1,640 22 380 Services 264,229 23 381 Meters 501,905 24 383 House Regulators 25 Total Uncompleted Distribution CWIP $ 8,723,317 26 27 28 Total Distribution Plant Work in Progress $ 14,636,047 C Schedule C-3.2 (D) Page 1 of 1 TXU GAS—DISTRIBUTION (isiv CONSTRUCTION WORK IN PROGRESS-GENERAL PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON NARUC Line No. Account Description Reference Amount (a) (b) (c) (d) 1 General Plant Construction Completed 2 Projects (as of January,2003) 3 303 Computer Software $ 1,618 4 389 Land (192,580) 5 390 Structures& Improvements 383,858 6 391 Office Furniture& Equipment 5,500 7 392 Transportation Equipment WP/C-3.2/1 - 8 394 Tools, Shop, and Garage Equipment (D) 80,084 9 396 Power Oper.Tool &Work Equip. 277 10 397 Radio Communication Equipment 72,790 11 398 Miscellaneous Equipment 12 399 Non-Mainframe Computer Equip. 13 Total General Plant Completed Construction $ 351,548 14 15 16 General Plant Construction Uncompleted (re 17 Projects 18 303 Computer Software $ 8,309,846 19 389 Land (7,000) 20 390 Structures& Improvements 761,002 21 391 Office Furniture& Equipment 46,590 22 392 Transportation Equipment W P/C-3.2/1 (485,022) 23 394 Tools, Shop, and Garage Equipment (D) 151,312 24 396 Power Oper.Tool &Work Equip. (25,500) 25 397 Radio Communication Equipment 110,049 26 398 Miscellaneous Equipment 63,563 27 399 Non-Mainframe Computer Equip. 415,141 28 Total General Plant Uncompleted Construction $ 9,339,981 29 30 Total General Plant Work in Progress $ 9,691,529 L Schedule D-1 (D) Page 1 of 1 TXU GAS—DISTRIBUTION ACCUMULATED DEPRECIATION OF DISTRIBUTION UTILITY PLANT AS OF DECEMBER 31,2002 SPONSOR:D.A.WATSON Line NARUC Amount per Adjusted No. Account Description Books Adjustments Balance (a) (b) (c) (d) (e) 1 Distribution Plant in Service-Original Cost 2 37401 Land - 3 37402 Land Rights 816,272 816,272 4 375 Structures& Improvements 863,897 863,897 5 376 Mains 288,384,692 288,384,692 6 378 M&R Station Equipment-General 7,907,133 7,907,133 7 379 M&R Station Equipment-City Gate 2,378,756 2,378,756 8 380 Services 149,615,263 149,615,263 9 381 Meters 54,584,799 54,584,799 10 383 House Regulators 9,244,834 9,244,834 11 Total Distribution Plant Original Cost $ 513,795,646 $ - $ 513,795,646 L Schedule D-2(D) Page 1 of 1 Le TXU GAS—DISTRIBUTION ACCUMULATED DEPRECIATION OF GENERAL PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A WATSON NARUC Amount per Adjusted Line No. Acct Description Books Adjustments Balance (a) (b) (c) (d) (e) 1 General Plant 2 303 Computer Software $ 10,012,157 $ - $ 10,012,157 3 389 Land - 4 390 Structures&Improvements 6,477,175 6,477,175 5 391 Office Furniture&Equipment 6,162,031 6,162,031 6 392 Transportation Equipment 10,733,731 858,202 11,591.932 7 394 Tools,Shop,and Garage Equipment - - 8 396 Power Oper.Tool&Work Equip. 7,032,129 7,032,129 9 397 Radio Communication Equipment 3,177,041 3,177,041 10 398 Miscellaneous Equipment 11,412,741 11,412,741 11 399 Non-Mainframe Computer Equip. 1,467,244 1,467,244 12 Total General Plant $ 56,474,248 $ 858,202 $ 57,332,450 13 14 Meter Shop Inventory - - 15 16 Total General Plant and Meter Shop Inventory $ 56,474,248 $ 858,202 $ 57,332.450 (hor L Schedule D-3 (D) Page 1 of 1 TXU GAS—DISTRIBUTION TOTAL RETIREMENT WORK IN PROGRESS AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line No. Description (a) 1 There is no separately booked Retirement Work in Progress 2 in the General Ledger. Retirement Work in Progress is 3 recorded in Construction Work in Progress and is adjusted 4 to Accumulated Depreciation when the related project 5 closes. C C 13 N- co � C�') t�f) CDNCO') CO C7 d d O U) ' CO ' ' CO U) 0 CA C7) O T 0 0 p C CO CA CD CD lA U7 C` T T U) O .- CO U) CD Cn 0 • _� � rs - vCD T () m d C.) U) U) (11Mov 0 d O 69 E9 b9 V, fi9 a) C) dw CO Nr CD 0)) crN N a) W T U) 1 CO T 1 1 1 1 CO N- T 1 T N U c m U) cocv COC O CO CO `Cr 'Cr CO d TU) oi Ui V to V 69 69 69 69 N 1- CD N 1,- U) C) CD CO CO WN ) 0) ' CON N ' ' ' CO CEO I- CD ' COO N Z Cd v T oN UiN- Ui1� ►� «, N- T C') CD T O T Nr gal. N a R o. .2- N U) U) N CO CD CD CO_ K O CC N CO V Ti T W d 1n CD z 69 69 69 fi, 0 .— — — a 0 0 m _ N N Co hi aN dU as '- c r _ + + Cl) W r w " C CO c CA 0 in W CC 0 CD d J E Z Q m Z E O ci W O — — — O m 2 W a m E a r c N 0 W Q a) - CI l E a W .. Z 0 C CCo o CC, m � o � a o o co 1- aWN - a) c F c Z W CC y c w O ¢ H - � E E el c E oa N ¢ ¢ n °) aci •0.._ °) c VO d c X - QWa w a) m E w a) w m w 5 E u. X c = Ecm ca) a) X H 0 w o a) o. a) mow a) 0 � W c Z c E � cEa � c m o g as O o .5 > w o ash o aE o c o X .2 W 0 m m o QO is PU - .0 w o as O.ots 13 o _ w c a) c - o- at C ` w c a' C COc . c a) «) > a) d O 0 a a) a 0 `o o • E0Ea To a n' a m v 0 o 3 a > > ti a� OU m 'm c U) c � 42 a c 3 wo- " a) Nv� mo ) mm a) o, m E c o c o 3 '5 N c C7 m U a 0 T E coop = ,_ ooa) •- o a asE o a) y o mU -1inOf- 1- ac2z0 2 0 0 0 0 50 0 H 1- 0 I- Z CO c D = CO 0) 0 T N of CO N- CD 0) 0 0 CO CCO CO CO' CO COC' CC'O CC'O CO Q V Z Q O d TNC") U) CONCDC) OT (N., Co 1nCDf� 000) In NNN CO N NN C J L Schedule D-5(D) Page 1 of 1 TXU GAS—DISTRIBUTION (10, DEPRECIATION STUDY RATE SUMMARY WITH ANALYSIS OF DATA THROUGH DECEMBER 31,2002 SPONSOR: D.A.WATSON Study Date Line NARUC No. Acct. Description Reference 12/99 12/02 (a) (b) (c) (d) (e) 1 Current Proposed 2 Distribution Plant Depreciation Rate Note 1 3.12% 3.49% 3 4 General Plant Depreciation Rate 5 303 Computer Software W P/D-4/3(D) 10.98% 13.86% 6 389 Land 0.00% 0.00% 7 390 Structures& Improvements 1.99% 3.18% 8 391 Office Furniture&Equipment 1.12% 0.99% 9 392 Transportation Equipment 0.00% 0.00% 10 394 Tools, Shop,and Garage Equipment Note 1 0.00% 0.00% 11 396 Power Oper.Tool&Work Equip. 0.00% 0.00% 12 397 Radio Communication Equipment 0.00% 0.45% 13 398 Miscellaneous Equipment 6.03% 1.40% 14 399 Non-Mainframe Computer Equip. 18.63% 15.78% 15 16 Note 1: Please see the testimony of D.A.Watson 17 for the complete study in which these rates were 18 computed. C Schedule E (D) Page 1 of 1 TXU GAS—DISTRIBUTION SUMMARY OF OTHER RATE BASE ITEMS AS OF DECEMBER 31,2002 SPONSORS: B. D. GRIFFIN, R. K. PRUETT, A. L. WARREN, D. A. WATSON Line No. Description Reference Amount (a) (b) (c) 1 Current Assets (13 month average) 2 Materials & Supplies E-1 (D) $ 3,859,290 3 Prepayments E-2 (D) 11,911,827 4 Working Gas in Storage E-9 (D) 98,182,654 5 6 Current Liabilities (Year-end Balance) 7 Customer Deposits E-3 (D) $ 24,590,346 8 Construction Advances E-4 (D) 456,094 9 Provision For Injuries And Damages E-5 (D) 1,284,500 10 Income Tax Adjustments E-7 (D) 137,304,761 11 12 Plant Adjustments L. 13 Safety Compliance Program Costs E-6(D) $ 42,982,796 14 15 Cash Working Capital E-8(D) $ (53,763,162) Schedule E-1 (D) L.' Page 1 of 1 TXU GAS—DISTRIBUTION MATERIALS& SUPPLIES FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: D. A.WATSON Stores Materials& Expense Line Account Balance Supplies Undistributed Total Materials No. As of Date (Acct. 154) (Acct. 163) & Supplies (a) (b) (c) (d) 1 January 1, 2002 $ 1,812,756 $ 1,467,548 $ 3,280,305 2 January 31, 2002 2,154,392 1,545,560 3,699,952 3 February 28, 2002 2,249,974 1,657,259 3,907,234 4 March 31, 2002 2,242,590 1,817,616 4,060,206 5 April 30, 2002 1,784,694 1,885,103 3,669,797 6 May 31, 2002 1,781,859 1,993,775 3,775,635 7 June 30, 2002 1,799,497 2,077,166 3,876,663 8 July 31, 2002 1,780,054 2,165,461 3,945,515 9 August 31, 2002 1,789,217 2,252,936 4,042,153 10 September 30, 2002 1,812,925 2,252,851 4,065,776 (Illw 11 October 31, 2002 1,767,450 2,225,163 3,992,613 12 November 30, 2002 1,740,452 2,213,866 3,954,319 13 December 31, 2002 1,546,175 2,354,435 3,900,609 14 Totals $ 24,262,034 $ 25,908,741 $ 50,170,776 15 16 13 Month Average $ 1,866,310 $ 1,992,980 $ 3,859,290 C Schedule E-2 (D) Page 1 of 1 C TXU GAS—DISTRIBUTION PREPAYMENTS FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Account Balance Insurance Other Prepayments Total No. As of Date (Acct 165.2100) (Acct 165.9000) Prepayments (a) (b) (c) (d) 1 January 1, 2002 $ 435,918 $ 3,043,679 $ 3,479,597 2 January 31, 2002 616,426 6,651,544 7,267,969 3 February 28, 2002 2,267,686 23,025,259 25,292,945 4 March 31, 2002 1,943,290 20,524,365 22,467,655 5 April 30, 2002 1,874,932 19,166,112 21,041,045 6 May 31, 2002 3,608,129 15,958,599 19,566,728 7 June 30, 2002 3,175,496 10,897,306 14,072,801 8 July 31, 2002 2,812,339 8,236,016 11,048,355 9 August 31, 2002 2,376,293 8,233,896 10,610,188 10 September 30, 2002 1,949,437 3,769,583 5,719,020 11 October 31, 2002 1,396,609 3,243,162 4,639,771 12 November 30, 2002 1,085,279 6,274,961 7,360,240 (1110e 13 December 31, 2002 874,921 1,412,511 2,287,431 14 Total $ 24,416,755 $ 130,436,991 $ 154,853,747 15 16 13 Month Average $ 1,878,212 $ 10,033,615 $ 11,911,827 C C Schedule E-3 (D) Page 1 of 1 TXU GAS—DISTRIBUTION CUSTOMER DEPOSITS AND ASSOCIATED INTEREST EXPENSE AS OF DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Description Amount (a) (b) 1 Customer Deposits 2 Account 235.1000 - Active Deposits $ 24,215,378 3 Account 235.2000 - Inactive Deposits 374,968 4 Total Customer Deposits $ 24,590,346 5 6 7 Interest on Customer Deposits 8 Active Deposits $ 1,452,938 9 Inactive Deposits 19,650 10 Annualized Interest on Customer Deposits $ 1,472,587 C Schedule E-4 (D) Page 1 of 1 TXU GAS—DISTRIBUTION CONSTRUCTION ADVANCES AS OF DECEMBER 31,2002 SPONSOR: D. A.WATSON Line Initial Principal Remaining Annual Interest No. Balance Refunded Balance Expense (a) (b) (c) (d) 1 $ 752,316 $ 296,222 $ 456,094 $ 8,517 2 3 4 Notes: 5 1. Not all construction advance contracts specify that 6 interest is to be paid and older contracts may bear a lower 7 interest rate than later contracts so the expense is computed 8 on the remaining balance of individual contracts rather than 9 on the total remaining balance. C L Schedule E-5 (D) Page 1 of 1 C TXU GAS—DISTRIBUTION PROVISION FOR INJURIES AND DAMAGES AS OF DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Account Balance No. NARUC Acct-Description As of Date: Amount (a) (b) (c) 1 262- Injuries and Damages Reserve December 31, 2002 $ 1,284,500 C. C Schedule E-6(D) Page 1 of 1 TXU GAS—DISTRIBUTION SAFETY COMPLIANCE PROGRAM COSTS AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line No. Description Reference SCP Costs Adjustments Amortization As Adjusted (a) (b) (c) (d) (e) (f) 1 Safety Compliance Costs WP/E-6/1 D $ 45,130,572 $ - $ (2,147,776) $ 42,982,796 C. C Schedule E-7 (D) (111r, Page 1 of 1 TXU GAS—DISTRIBUTION INCOME TAX ADJUSTMENTS AS OF DECEMBER 31,2002 SPONSOR: B. D. GRIFFIN Line No. Item Reference Amount (a) (b) (c) 1 Income Tax Adjustments 2 Accumulated Deferred Federal Income Tax E-7.1 (D) $ 126,964,321 3 Unrestored Investment Tax Credits E-7.2 (D) 10,340,440 4 Total Income Tax Adjustments $ 137,304,761 C C C15 r;m .92 2 Q.L € �p{p p fDP7 m_C)P) N inN O N F 0 m C)R 1 0)Y9 O)OO)U)(0 O N (/J PR N2 N' (p((pp m O 0 h [7 U)^Z. U)N R .e I. 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'6 yO C0 O $ mm t c c cCi -, W of c 0 0 • m a o aa' arN H 2— $) c 0 �Ua m m a = o m 6 o (_ I o cc u) a3 15 (kair" CZ r N CO Q N O h O O) O r N C7 et ID O h CO 0)N N N N N N N N J Schedule E-9 (D) Page 1 of 1 TXU GAS—DISTRIBUTION WORKING GAS IN STORAGE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: D.A.WATSON Working Gas in Line Account Balance Storage No As of Date (Acct 164) (a) (b) 1 Balance as of: 2 January 1, 2002 $ 109,408,696 3 January 31, 2002 97,407,574 4 February 28, 2002 88,858,891 5 March 31, 2002 75,653,595 6 April 30, 2002 80,270,514 7 May 31, 2002 88,623,121 8 June 30, 2002 98,467,142 9 July 31, 2002 100,827,396 10 August 31, 2002 102,801,576 11 September 30, 2002 104,321,711 12 October 31, 2002 107,670,078 13 November 30, 2002 112,674,259 14 December 31, 2002 109,389,949 15 Total $ 1,276,374,502 16 17 13-Month Average Balance $ 98,182,654 L Schedule F-1 (D) Page 1 of 1 cor TXU GAS—DISTRIBUTION OPERATING REVENUES FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Adjustments No. Acct Description Total WP/L-1/2(D)(1) As Adjusted (a) (b) (c) (d) (e) 1 Operating Revenue Accounts 2 Sales of Gas 3 480 Residential Sales $ 569,092,899.63 $ (9,850,473.65) $ 559,242,425.98 4 480 Residential Sales-O/U Collections 4,466,032.74 - 4,466,032.74 5 481 Commercial Sales 287,510,526.85 (5,400,95025) 282,109,576.60 6 481 Commercial Sales-ON Collections 4,820,793.81 - 4,820,793.81 7 481 Industrial Sales 20,701.14622 - 20.701,14622 8 482 Other Sales to Public Authorities 1288,313.03 - 1288,313.03 9 483 Sales for Resale 1,968,984.12 - 1,968,984.12 10 Total Sales of Gas $ 889,848,696.40 $ (15251,423.90) $ 874.597272.50 11 12 Other Operating Revenues 13 486 Unbilled Gas Revenues $ (12,266,832.73) $ - $ (12266.832.73) 14 487 Forfeited Discounts 11,220.00 - 11220.00 15 488 Miscellaneous Service Revenues 8,570,565.05 - 8,570,565.05 16 489 Revenues from Transportation of Gas to Others 14,638,341.93 10,928,699.81 25,567,041.74 17 493 Rent from Gas Property 1,391,47725 749,834.85 2,141,312.10 18 495 Other Gas Revenues 9,361.82 - 9,361.82 19 495 ON Collections (1.022,858.57) - (1,022,858.57) 20 495 Other Gas Revenues-Stand By/Back Up Fees 3,854,176.50 - 3,854,176.50 21 Total Other Operating Revenues $ 15,185,45125 $ 11,678,534.66 $ 26.863.985.91 22 23 Total Operating Revenues $ 905,034,147.65 $ (3,572,88924) $ 901,461258.41 24 25 Total Operating Revenues for Cost of Service Filing 26 27 Total Operating Revenues $ 905,034,147.65 $ (3,572,88924) $ 901,461258.41 Le. 28 29 Less: 480 Residential Sales-ON Collections 4,466,032.74 4,466,032.74 30 Less: 481 Commercial Sales-ON Collections 4,820,793.81 4,820,793.81 31 Less: 486 Unbilled Gas Revenues (12266,832.73) - (12266,832.73) 32 Less: 495 0/U Collections (1,022.858.57) - (1,022,858.57) 33 Less: 495 Other Gas Revenues-Stand By/Back Up Fees 3,854,176.50 - 3,854,176.50 34 Total Excluded Revenues $ (148,68825) $ - $ (148,68825) 35 36 Total Adjusted Operating Revenues $ 905,182,835.90 $ (3.572.88924) $ 901,609,946.66 37 38 Gas Sales Revenues for Cost of Service Filing 39 Restated by Customer Class(Schedule A(Di) 40 41 480 Residential Sales $ 569,092,899.63 $ (9,850,473.85) $ 559242,425.98 42 Total Residential $ 569,092,899.63 $ (9,850,473.65) $ 559,242,425.98 43 481 Commercial Sales 287,510,526.85 (5,400,95025) 282,109,576.60 44 482 Other Sales to Public Authorities 1.288.313.03 - 1,288,313.03 45 Total Commercial $ 288,798,639.88 $ (5,400,950.25) 5 283,397,689.63 46 481 Industrial Sales 20,701,14622 - 20,701,14622 47 483 Sales for Resale 1,968,984.12 - 1,968,984.12 48 489 Revenues from Transportation of Gas to Others 14,638,341.93 10,928,699.81 25,567,041.74 49 Total lndustriaVTransportation $ 37,308,47227 $ 10,928,699.81 $ 48,237,172.08 50 51 Total Revenues $ 895200.211.78 S (4,322,724.09) $ 890,677,487.69 52 53 487 Forfeited Discounts $ 11,220.00 $ - $ 11,220.00 54 488 Miscellaneous Service Revenues 8,570,565.05 - 8,570,565.05 55 493 Rent from Gas Property 1,391,47725 749,834.85 2,141,312.10 56 495 Other Gas Revenues 9,361.82 - 9,361.82 57 58 Total Other Revenues $ 9,982,624.12 S 749,834.85 $ 10,732,458.97 59 60 Total Operating Revenues for Cost of Service Filing 61 Adjusted for Excluded Revenues(Schedule A-1(D1j 62 63 Revenues(Ln.51) $ 895200211.78 $ (4,322,724.09) 890,877,487.89 64 Other Revenues(Ln.58) 9,982,624.12 749,834.85 10,732,458.97 (Ilor. 65 66 Total Operating Revenues for Cost of Service Filing(2) $ 905,182,835.90 $ (3.572.88924) $ 901,609,946.66 67 Note: (1)Col.(d)adjustments are from W P/L-12(D),except for Ln.17 which is from W P/F-1(D). 68 (2)Lines 4,6,13,19,and 20 are excluded from the cast of service filing. CD Co C.)C') G o Co To" O .▪ CO CD Q 0)0) 9 ` COO a F O <a a) O 'C C./ a Cl) _ Q K W C m N E d a aCD 3 0 Cc)V) m , _ ¢ coto(IOo '° c a � C99C) m ID a c v Q w 49 V4 CV N N OW °° O n tOP N J CO O CO �0 Ego cv as CD J a v a Zp W 2 d 13 < 3 =X 0 0 494 1 m WQQ eryry c00"" 000<OOM 0 0 N 0 CV 0Ov 00 ~~ M .— O(7 P Ch M O r Of Of •- N P) CO CO CO I- ° O V CC V CU N (7 CO CC P) P) (7 C+) CD P P P, _Na W W O • V O) V t0 CD .- CD CO CV N CO 0 CO P) P)CO a0 nO) CO CO m CO P 0 P N CO CV CV V 0 O O 0 O Z V O) CV tU CO CC+-(i co v a ci N tU Oi q... Oi O) ' N W Q '"' N CD Co P) )n 0) N. CO P CO CO P P V a M�, a O� P CD CO CDC) ON .- N ID (0 N V P O CDC N4CC< V CiCD0(V OtliLi` cin h oS m. ai ~ c'iC9' �C7W Q W CO....�....� vv t00 t40 00 100 IOU)); T 49 ~ 0F0 W CA Z F a0 C Cr N IL O C • 0 LE U th a • 0 Cl) H 3 c p ca m a ° w a co 2 m C ul co N 0 y W ai m 0 H O a. O 7 t an w8 0 m ^ >' m m 0) r O d 2 .. C O a co a X CLX N 7 W O F. m O • x m 7 W m 3 p N m m a m %o o .. m W m N �. O a. av Cr) CI a0 L mr' c 0� a c c at m aO. C7 12 �'OJ QUO m a x. a > >0 Cl) C Cl) m a .d q O mrn=m W W No) m.0 m J r N m 17 m` �. ., a CO m m CO c c E m E O � W n a C7C7 o C7 m d V c .c O L 2'0.co N L L N L_ E m L m m m El ° m D a m mp 0 D 0 j pp 0 o co m coa(7 22�cooC7 C7 co en E ' W 8'g m m m CO m 36 in m L mm m to. m . CO m m v m m m m m v c7 ` 30T00 • O vm); a a if. Ea IC TO Wi t.. X m m m W J< m m 2 (C ZZZZOwCS(7C70F i- I- FO- Z� 612 0 = V elC9 ID CO CO 0) CVC7 CC C,� 8 0 0 0 0 0 0 0 < Q CD CC CC CO CC CD to Co C0 Co z C• o � N cO V 10 CO P CO O) O .- N C7V ill 0 I, CO 00 NOV MCOP COO) O NC) J N mu N N cm N cm Cy N cm O) elC) C7 CO C Schedule G-2(D) Page 1 of 1 Le TXU GAS—DISTRIBUTION OPERATION AND MAINTENANCE EXPENSES FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R.K.PRUETT Line NARUC Labor Non-Labor No. Acct Description Total Adjustments Adjustments As Adjusted (a) (b) (c) (d) (e) (I) 1 Distribution Operation Expense 2 870 Operation Supervision and Engineering $ 526.693.25 $ - $ - $ 526,69325 3 874 Mains and Services Expenses 15,966,202.01 - 672,855.00 16,639,057.01 4 875 Measuring and Regulating Station Expenses-General 661,980.34 - 661,980.34 5 877 Measuring and Regulating Station Exp.-City Gate Chk.Sta. 255.38 - - 255.38 6 878 Meter and House Regulator Expenses 7,977,093.98 - - 7,977,093.98 7 879 Customer Installations Expenses 1,426,857.64 - - 1,426,857.64 8 880 Other Expenses 10,123,145.69 - (4,105.55) 10,119,040.14 9 881 Rents 37.920.31 - - 37.920.31 10 Total Distribution Operation Expense $ 36,720,148.60 $ - $ 668,749.45 $ 37,388,898.05 11 12 Distribution Maintenance Expense 13 885 Maintenance Supervision and Engineering $ 46,266.70 $ - $ - $ 46266.70 14 886 Maintenance of Structures and Improved 65.44 - - 65.44 15 887 Maintenance of Mains 14,548,956.51 - 682.835.97 15231,792.48 16 889 Maint.of Measuring and Regulating Station Equip.-General 1299,798.98 - - 1299,798.98 17 890 Maint.of Measuring and Regulating Station Equip.-Industrial 4,958.81 - - 4,958.81 18 892 Maintenance of Services 3,389,04826 - - 3,389.041326 19 893 Maintenance of Meters and House Regulators 1,428,802.14 - - 1,428,802.14 20 894 Maintenance of Other Equipment 637,448.05 - • 637,448.05 (hp., 21 Total Distribution Maintenance Expense $ 21,355,344.89 $ $ 682,835.97 $ 22,038,180.86 22 23 Customer Accounts Expense 24 901 Supervision $ (300.00) $ - $ - $ (300.00) 25 902 Meter Reading Expense 7,539,431.83 - (19229) 7.539239.54 26 903 Customer Records and Collection Expenses 37249,82621 - - 37249.82621 27 904 Uncollectible Accounts 4,019,755.41 - - 4,019,755.41 28 905 Miscellaneous Customer Accounts Expenses - - - 29 Total Customer Accounts Expense $ 48,808,713.45 $ - $ (19229) $ 48,808,521.16 30 31 Customer Service Expense 32 910 Customer Assistance Expenses $ 3,830,11825 $ - $ (9,451.86) $ 3,820,666.39 33 911 Informational Advertising Expenses 34.690.21 - (9928) 34,590.93 34 Total Customer Service Expense $ 3,864,808.46 $ - $ (9,551.14) $ 3,855257.32 35 36 §ales Promotion Expense 37 915 Supervision $ 1,225.64 $ - $ - $ 1,225.64 38 916 Demonstrating and Selling Expenses 147,65421 - (13,103.85) 134,550.36 39 917 Promotional Advertising Expenses 233,410.64 - (1,125.00) 232285.64 40 918 Miscellaneous Sales Promotion Expenses 64,504.67 - (5,365.32) 59,139.35 41 Total Sales Promotion Expense $ 446,795.16 $ - $ (19,594.17) $ 427200.99 42 43 Administrative end General Expense 44 920 Administrative and General Salaries $ 3203,201.41 $ (836,429.40) $ - $ 2,366,772.01 45 921 Office Supplies and Expenses 520,716.87 - 77,654.44 598,371.31 46 923 Outside Services Employed 28,468257.71 - (645,595.91) 27,822,661.80 47 924 Property Insurance 175,803.95 - 61,555.98 237,359.93 48 925 Injuries and Damages 5,641,414.99 - 661206.36 6,302,621.35 49 926 Employee Pensions and Benefits 15,643,649.18 - 4,739,114.43 20,382,763.81 50 928 Regulatory Commission Expenses 2,661,029.41 - (2,661.029.41) 51 930.1 Institutional or Goodwill Advertising Expense 101,383.48 - - 101,383.48 52 9302 Miscellaneous General Expense 4,531,933.86 - 1,091,539.80 5,623,473.66 53 931 Rents 187,325.58 - 278,380.72 485,706.30 54 932 Maintenance of General Plant - - - 55 Total Administrative and General Expense $ 61,134,716.44 $ (836,429.40) $ 3,602,826.41 $ 63,901,113.45 56 57 Total Operation and Maintenance Expense S 172,330,527.00 $ (836.429.40) $ 4.925.07423 $176,419,171.83 Schedule G-3(D) Page 1of1 TXU GAS—DISTRIBUTION (1., LABOR EXPENSE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Labor No. Acct Description Total Adjustments As Adjusted (a) (b) (c) (d) (e) 1 Distribution Operation Expense 2 870 Operation Supervision and Engineering $ 385,326.26 $ - $ 385,326.26 3 874 Mains and Services Expenses 6,442,049.47 - 6,442,049.47 4 875 Measuring and Regulating Station Expenses-General 313,872.52 - 313,872.52 5 877 Measuring and Regulating Station Exp.-City Gate Chk.Sta. - - - 6 878 Meter and House Regulator Expenses 6,227,079.80 - 6,227,079.80 7 879 Customer Installations Expenses 1,170,511.30 - 1,170,511.30 8 880 Other Expenses 4,568,876.25 - 4,568,876.25 9 881 Rents 25.12 - 25.12 10 Total Distribution Operation Expense $ 19,107,740.72 $ - $ 19,107,740.72 11 12 Distribution Maintenance Expense 13 885 Maintenance Supervision and Engineering $ 33,391.75 $ - $ 33,391.75 14 886 Maintenance of Structures and Improvements - - 15 887 Maintenance of Mains 7,428,748.22 - 7,428,748.22 16 889 Maint.of Measuring and Regulating Station Equip.-General 1,005,863.54 - 1,005,863.54 17 890 Maint.of Measuring and Regulating Station Equip.-Industrial 240.69 - 240.69 18 892 Maintenance of Services 2,667,314.83 - 2,667,314.83 19 893 Maintenance of Meters and House Regulators 1,145,776.49 - 1,145,776.49 20 894 Maintenance of Other Equipment 1,229,630.61 - 1,229,630.61 21 Total Distribution Maintenance Expense $ 13,510,966.13 $ - $ 13,510,966.13 22 23 Customer Accounts'Expense 24 901 Supervision $ - $ $ - ( 25 902 Meter Reading Expense 5,777,929 42 - 5,777,929.42 26 903 Customer Records and Collection Expenses 5,061,738.34 5,061,738.34 27 904 Uncollectible Accounts 28 905 Miscellaneous Customer Accounts Expenses - - 29 Total Customer Accounts Expense $ 10,839,667.76 $ - $ 10,839,667.76 30 31 Customer Service Expense 32 910 Customer Assistance Expenses $ 2,710,009.23 $ - $ 2,710,009.23 33 911 Informational Advertising Expenses - - 34 Total Customer Service Expense $ 2,710,009.23 $ - $ 2,710,009.23 35 36 Sales Promotion Expense 37 915 Supervision $ 829.51 $ - $ 829.51 38 916 Demonstrating and Selling Expenses - - 39 917 Promotional Advertising Expenses 85,387.90 - 85,387.90 40 918 Miscellaneous Sales Promotion Expenses - - - 41 Total Sales Promotion Expense $ 86,217.41 $ - $ 86,217.41 42 43 Administrative and General Expense 44 920 Administrative and General Salaries $ 3,203,201.41 $ (836,429.40) $ 2,366,772.01 45 921 Office Supplies and Expenses - - 46 923 Outside Services Employed 151,585.88 - 151,585.88 47 924 Property Insurance - - 48 925 Injuries and Damages - - 49 926 Employee Pensions and Benefits - - - 50 928 Regulatory Commission Expenses - ' - 51 930.1 Institutional or Goodwill Advertising Expense - - - 52 930.2 Miscellaneous General Expense - ' 53 931 Rents - - - 54 932 Maintenance of General Plant - ' 55 Total Administrative and General Expense $ 3,354,78729 $ (836,429.40) $ 2,518,357.89 56 57 Total Labor Expense $ 49,609,388.54 $ (836,429.40) $ 48,772,959.14 C &\ § c § gl g, Ha IL a� ; ao $ �� ^ 2 _ a •sC5 CL -ER - - 44. - - c , E Bƒ �A� - - - - - 49 , ■ § a• io 2 §4� $ lig0 0 ■ Cc - - - - - - > U$ o § ICE z m ��fa §�§w • - - - - - - EIli o , ''LLI 0 • 7 = 04.1 } 4wie liwo k\ §E I - - - - - - 1- 0.7( )k �- CI UJ I ■ ■ _ « 0 ea< u. ° © - - - - ® - re OD Ci mkq , # §qRR ~AggpCDR ~# r _ - c0/ 0 22 0172$ §2 " k 12 k§k kk\ o $$~ §kA /§ u - « - © § coTo 0 k § 0 $ , O. 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F7# ` 06 16 (111000r 0I � co0a. s1- ■ooa_ Wcc _■z2e e 0 - �� � � o- n - 04000 � � - § .44 �� G ��a @§ § § @B@ § 2Gca la C')C') %XS $.74 a$$4s$SG@SMSS� Schedule G-4(D) Page 1 of 1 (ire TXU GAS—DISTRIBUTION NON-LABOR EXPENSE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R.K.PRUETT Line NARUC Non-Labor No. Acct Description Total Adjustments As Adjusted (a) (b) (c) (d) (e) 1 Distribution Operation Expense 2 870 Operation Supervision and Engineering $ 141,366.99 $ - $ 141,366.99 3 874 Mains and Services Expenses 9,524,152.54 672,855.00 10,197,007.54 4 875 Measuring and Regulating Station Expenses-General 348,107.82 - 348,107.82 5 877 Measuring and Regulating Station Exp.-City Gate Chk.Sta. 255.38 - 255.38 6 878 Meter and House Regulator Expenses 1,750,014.18 - 1,750,014.18 7 879 Customer Installations Expenses 256,346.34 - 256,346.34 8 880 Other Expenses 5,554,269.44 (4,105.55) 5,550,163.89 9 881 Rents 37,895.19 - 37,895.19 10 Total Distribution Operation Expense $ 17,612,407.88 $ 668,749.45 $ 18,281,157.33 11 12 Distribution Maintenance Expense 13 885 Maintenance Supervision and Engineering $ 12,874.95 $ - $ 12,874.95 14 886 Maintenance of Structures and Improvements 65.44 - 65.44 15 887 Maintenance of Mains 7,120,208.29 682,835.97 7,803,044.26 16 889 Maint.of Measuring and Regulating Station Equip.-General 293,935.44 - 293,935.44 17 890 Maint.of Measuring and Regulating Station Equip.-Industrial 4,718.12 - 4,718.12 18 892 Maintenance of Services 721,733.43 - 721,733.43 19 893 Maintenance of Meters and House Regulators 283,025.65 - 283,025.65 20 894 Maintenance of Other Equipment (592,182.56) - (592,182.56) 21 Total Distribution Maintenance Expense $ 7,844,378.76 $ 682,835.97 $ 8,527,214.73 22 23 Customer Accounts Expense 24 901 Supervision $ (300.00) $ - $ (300.00) 25 902 Meter Reading Expense 1,761,502.41 (192.29) 1,761,310.12 26 903 Customer Records and Collection Expenses 32,188,087.87 - 32,188,087.87 27 904 Uncollectible Accounts 4,019,755.41 - 4,019,755.41 28 905 Miscellaneous Customer Accounts Expenses - - 29 Total Customer Accounts Expense $ 37,969,045.69 $ (192.29) $ 37,968,853.40 30 31 Customer Service Expense 32 910 Customer Assistance Expenses $ 1,120,109.02 $ (9,451.86) $ 1,110,657.16 33 911 Informational Advertising Expenses 34,690.21 (99.28) 34,590.93 34 Total Customer Service Expense $ 1,154,799.23 $ (9,551.14) $ 1,145,248.09 35 36 Sales Promotion Expense 37 915 Supervision $ 396.13 $ - $ 396.13 38 916 Demonstrating and Selling Expenses 147,654.21 (13,103.85) 134,550.36 39 917 Promotional Advertising Expenses 148,022.74 (1,125.00) 146,897.74 40 918 Miscellaneous Sales Promotion Expenses 64,504.67 (5,365.32) 59,139.35 41 Total Sales Promotion Expense $ 360,577.75 $ (19,594.17) $ 340,983.58 42 43 Administrative and General Expense 44 920 Administrative and General Salaries $ - $ - $ 45 921 Office Supplies and Expenses 520,716.87 77,654.44 598,371.31 46 923 Outside Services Employed 28,316,671.83 (645,595.91) 27,671,075.92 47 924 Property insurance 175,803.95 61,555.98 237,359.93 48 925 Injuries and Damages 5,641,414.99 661,206.36 6,302,621.35 49 926 Employee Pensions and Benefits 15,643,649.18 4,739,114.43 20,382,763.61 50 928 Regulatory Commission Expenses 2,661,029.41 (2,661,029.41) - 51 930.1 Institutional or Goodwill Advertising Expense 101,383.48 - 101,383.48 (kw" 52 930.2 Miscellaneous General Expense 4,531,933.86 1,091,539.80 5,623,473.66 53 931 Rents 187,325.58 278,380.72 465,706.30 54 932 Maintenance of General Plant - - 55 Total Administrative and General Expense $ 57,779,929.15 $ 3,602,826.41 $ 61,382,755.56 56 57 Total Non-Labor Expense $122,721,138.46 $ 4,925,074.23 $ 127,646,212.69 a: _—o (11, ,f0 o a .. c 3a m°Co o -0<w_— Cl) c in'r C O I S. a1K W y H H M N w U g C A 7 E. 7▪i ? of yy p K 4, N 44 7 C g YCD CO V O N VI a a 7 _ 1`▪ iq O O Co e m 2¢ w N K N N W N G !.C N e N O e g pa1§ 2n y¢r 5 74° O W'm N N ' N N N F CAWW =zum P9 N N maca c rn • � � . 0 NW W Y a C r. 0¢0¢ 2$p m m M N.. 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X' Cn Cn co cn 0 2 n O Q n E W E c c c �o-) c ... a . � � v) c) c) = •- � v) 'v) p N CO X as _ -0 cn a) c c m m as O rnoOQoa` ma) » coa) cm 0 > c m 0 E- H H —a) 0 ®a v) 2 U =. co " c a) , . cc ry a ° °m ~' a a) � v) cn v) cO L '- NcaZZZ CO ¢ n i _ _ _ HUc _12 Ea a CO 4- N CO Nt O CD N. co o) p I-- N c') et J Schedule G-5.1 (D) Page 1 of 1 TXU GAS—DISTRIBUTION ADVERTISING EXPENSE ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 910 Customer Assistance Expenses WP/G-5.1 (D) $ 75,782.22 2 911 Informational Advertising Expenses G-2(D) 34,690.21 3 916 Demonstrating and Selling Expenses WP/G-5.1 (D) 8,235.10 4 917 Promotional Advertising Expenses G-2(D) 233,410.64 5 918 Miscellaneous Sales Promotion Expenses WP/G-5.1 (D) 169.50 6 930.1 Institutional or Goodwill Advertising Expense G-2(D) 101,383.48 7 Total System Advertising Expense $ 453,671.15 8 9 Total Operating Revenue F-1 (D) $ 905,034,147.65 10 Less: 904 Uncollectible Accounts G-2(D) 4,019,755.41 11 12 Total Gross Receipts $ 901,014,392.24 13 14 Allowable Percentage for Advertising per Substantive Rule 7.5414 0.500% 15 16 Calculated Allowable Advertising Expense $ 4,505,071.96 17 18 19 Total Advertising Expense Included in Rate Filing $ 453,671.15 20 - 21 Total Advertising Expense Adjustment $ 22 23 24 The above information is provided per Substantive Rule 7.5414. The advertising expense included in the rate filing is below the 25 allowable level,consequently,an adjustment to expense is not required. C Schedule G-5.2(D) Page 1 of 1 TXU GAS—DISTRIBUTION CONTRIBUTIONS AND DONATIONS EXPENSE ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Contributions and Donations Expense Adjustment 2 3 Total Contributions and Donations Expense WP/G-5.2(D) $ 224.211.02 4 5 Less: 6 426 Miscellaneous Income Deductions WP/G-5.2(D) 201.316.63 7 8 Var Non-Labor Expense WP/G-5.2(D) $ 22.894.39 9 10 Total Contributions and Donations Expense Adjustment $ (22.894.39) 11 12 13 Adjustment to expense to remove contribution and donations in accordance with Substantive Rule 7.5414. C L Schedule G-5.3(D) Page 1 of 1 TXU GAS—DISTRIBUTION SOCIAL CLUB DUES ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Social Club Dues Adiustment 2 3 Total Social Club Dues WP/G-5.3(D) $ 12,077.10 4 5 Less: 6 426 Miscellaneous Income Deductions WP/G-5.3(D) 5,871.69 7 8 9 Var Non-Labor Expense WP/G-5.3(D) $ 6,785.07 10 11 Total Social Club Dues Adjustment $ ,785.07)(6 12 13 14 Adjustment to expense to remove social club dues in accordance with Substantive Rule 7.5414. C Schedule G-5.4(D) Page 1 of 1 TXU GAS—DISTRIBUTION LEGISLATIVE ADVOCACY ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Legislative Advocacy Adjustment 2 3 930.2 Non-Labor Expense WP/G-5.4(D) $ 3.808.52 4 5 Total Legislative Advocacy Adjustment $ (3,808.52) 6 7 8 Adjustment to expense to remove legislative advocacy costs in accordance with Substantive Rule 7.501. 9 10 The last odd-year legislative advocacy expense(2001)is presented below per Substantive Rule 7.501 11 12 Total Legislative Advocacy for last odd year(2001) WP/G-5.4(D) $ 3,740.51 (INV L Schedule G-5.5(D) L.. Page 1 of 1 TXU GAS-DISTRIBUTION MISCELLANEOUS ACCOUNT REVISIONS ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Amount No. Acct Description Reference Labor Non-Labor Adjusted (a) (b) (c) (d) le) (I) 1 Distribution Operation Expense 2 870 Operation Supervision and Engineering WP/G-5.5(D) $ - $ - $ - 3 874 Mains and Services Expenses WP/G-5.5(D) - - - 4 875 Measuring and Regulating Station Expenses-General WP/G-5.5(D) - - - 5 877 Measuring and Regulating Station Exp.-City Gate Chk.Sta. WP/G-5.5(0) - - - 6 878 Meter and House Regulator Expenses WP/G-5.5(D) - - - 7 879 Customer Installations Expenses WP/G-5.5(D) - - - 8 880 Other Expenses WP/G-5.5(D) - (1,582.99) (1,582.99) 9 881 Rents WP/G-5.5(D) - - 10 Total Distribution Operation Expense $ - $ (1,582.99) $ (1.582.99) 11 12 Distribution Maintenance Expense 13 885 Maintenance Supervision and Engineering WP/G-5.5(D) $ - $ - $ • 14 886 Maintenance of Structures and Improvements WP/G-5.5(D) - - - 15 887 Maintenance of Mains WP/G-5.5(D) - - - 16 889 Maint.of Measuring and Regulating Station Equip.-General WP/G-5.5(D) - - - 17 890 Maint.of Measuring and Regulating Station Equip.-Industrial WP/G-5.5(D) - - - 18 892 Maintenance of Services WP/G-5.5(D) - - 19 893 Maintenance of Meters and House Regulators WP/G-5.5(D) - - - 20 894 Maintenance of Other Equipment WP/G-5.5(D) - - - 21 Total Distribution Maintenance Expense $ - $ - $ - 22 (100Pr 23 Customer Accounts Expense 24 901 Supervision WP/G-5.5(D) $ $ $ 25 902 Meter Reading Expense WP/G-5.5(D) - - 26 903 Customer Records and Collection Expenses WP/G-5.5(D) - - - 27 904 Uncollectible Accounts WP/G-5.5(D) - - - 28 905 Miscellaneous Customer Accounts Expenses WP/G-5.5(D) - - - 29 Total Customer Accounts Expense $ $ - $ - 30 31 Customer Service Expense 32 910 Customer Assistance Expenses WP/G-5.5(D) $ - $ (5,491.66) $ (5,491.66) 33 911 Infomrational Advertising Expenses WP/G-5.5(D) (9928) (9928) 34 Total Customer Service Expense $ - $ (5.590.94) $ (5,590.94) 35 36 Sales Promotion Expense 37 915 Supervision WP/G-5.5(D) $ - $ - $ - 38 916 Demonstrating and Selling Expenses WP/G-5.5(D) - (13,103.85) (13,103.85) 39 917 Promotional Advertising Expenses WP/G-5.5(D) - (1,125.00) (1,125.00) 40 918 Miscellaneous Sales Promotion Expenses WP/G-5.5(D) - - - 41 Total Sales Promotion Expense $ - $ (14,228.85) $ (14,228.85) 42 43 Administrative and General Expense 44 920 Administrative and General Salaries WP/G-5.5(D) $ 735,328.69 $ - $ 735,328.69 45 921 Office Supplies and Expenses WP/G-5.5(D) - (10,76727) (10,76727) 46 923 Outside Services Employed WP/G-5.5(D) - 303,477.38 303,477.38 47 924 Property Insurance WP/G-5.5(D) - - - 48 925 Injuries and Damages WP/G-5.5(D) - - - 49 926 Employee Pensions and Benefits WP/G-5.5(D) - - - 50 928 Regulatory Commission Expenses WP/G-5.5(D) - (2,661,029.41) (2,661,029.41) 51 930.1 Institutional or Goodwill Advertising Expense WP/G-5.5(D) - - • 52 9302 Miscellaneous General Expense WP/G-5.5(D) - (393.00) (393.00) 53 931 Rents WP/G-5.5(D) • - 54 932 Maintenance of General Plant WP/G-5.5(D) - - - 55 Total Administrative and General Expense $ 735.328.69 $(2,368,712.30) $(1,633.383.61) 56 57 58 Total Miscellaneous Account Revisions Adjustment $ 735,328.69 $(2,390,115.06) $(1.654.786.39) L.. 59 60 61 Adjustment to expense for aviation,entertainment,rate case expenses recovered through surcharges,non-recurring charges,tax-related 62 penalties and fees,deferred compensation incentive plan costs,and a compensation increase. For additional detail,reference WP/G-5.5. Schedule G-5.6(D) kW' Page 1 of 1 TXU GAS—DISTRIBUTION INSURANCE PREMIUMS ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS: R.K.PRUETT AND S.N.RAGLAND Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Insurance Premiums Adjustment 2 3 924 Labor WP/G-5.6(D) $ 4 924 Non-Labor WP/G-5.6(D) 61,555.98 5 925 Labor WP/G-5.6(D) 6 925 Non-Labor WP/G-5.6(D) 661,206.36 7 8 Total Insurance Premiums Adjustment $ 722,762.34 9 10 11 Adjustment to insurance premiums and claims expenses in the test year for known and measurable changes. The increase 12 in liability and property insurance premiums is due to higher policy limits which went into effect in mid 2002. The increase 13 in third party workers compensation is due to an increase in premiums. L Schedule G-5.7(D) (111W Page 1 of 1 TXU GAS—DISTRIBUTION PENSION&BENEFIT EXPENSE ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Pension&Benefit Expense Adjustment 2 3 926 Labor $ - 4 926 Non-Labor WP/G-5.7(D) 5,286,036.69 5 6 Total Pension&Benefit Expense Adjustment $ 5,286,036.69 7 8 9 Adjustment to pension and health-related employee benefit expenses due to increased medical costs,decreased values 10 in trusts used to fund retirement benefits,and reductions in expected returns on pension fund assets from 9%to 6.75%. Schedule G-5.8(D) kV' Page 1 of 1 TXU GAS—DISTRIBUTION PIPELINE INTEGRITY PROGRAM ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS: R.K.PRUETT AND J.A.GREER Line NARUC Amount No. Acct Description Reference Labor Non-Labor Adjusted (a) (b) (c) (d) (e) (f) 1 Pipeline Integrity Program Adjustment 2 3 874 Mains and Services Expenses WP/G-5.8(D) $ - $ 672,855.00 $ 672.855.00 4 5 Total Pipeline Integrity Program Adjustment $ - $ 672,855.00 $ 672,855.00 6 7 8 To include in the test year an amount of expense for the Pipeline Integrity Program. Refer to the direct testimony of Mr. 9 J.A.Greer. C C Schedule G-5.9(D) Page 1 of 1 TXU GAS—DISTRIBUTION WINS-TXU BUSINESS SERVICES COST REDUCTION ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS:M.D.MOSELEY,R.K.PRUETT,S.N.RAGLAND Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 WINS-TXU Business Services Cost Reduction Adjustment 2 3 923 Labor $ - 4 923 Non-Labor W P/G-5.9(D) (1,844,612.31) 5 6 Total WINS-TXU Business Services Cost Reduction Adjustment $ (1,844,612.31) 7 8 9 To include in the test year a reduction in expense for the WINS-TXU Business Services Cost Reduction Adjustment. 10 Refer to the direct testimony of Mr.M.D.Moseley and Mr.S.N.Ragland. (iv Schedule G-5.10(D) (11w, Page 1 of 1 TXU GAS—DISTRIBUTION WINS-TXU BUSINESS SERVICES REGULATORY ASSET ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS: M.D.MOSELEY,R.K.PRUETT,S.N.RAGLAND Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 WINS-TXU Business Services Reaulatory Asset Adiustment 2 3 930.2 Labor WP/G-5.10(D) $ - 4 930.2 Non-Labor WP/G-5.10(D) 175,629.16 5 6 Total WINS-TXU Business Services Regulatory Asset Adjustment $ 175,629.16 7 8 9 To adjust expense in the test year to include one year of amortization relative to the WINS-TXU Business Services 10 Regulatory Asset. Refer to the direct testimony of Mr.M.D.Moseley and Mr.S.N.Ragland. Schedule G-5.11 (D) Page 1 of 1 TXU GAS—DISTRIBUTION WINS RELATED(ONCOR)REDUCTION ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS: J.A.GREER,M.D.MOSELEY,AND R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 WINS Related(Oncor)Reduction Adjustment 2 3 920 Labor WP/G-5.11 (D) $ (2,845,730.00) 4 926 Non-Labor WP/G-5.11 (D) (1,039,773.00) 5 930.2 Non-Labor WP/G-5.11 (D) 936,467.00 6 7 Total WINS Related(Oncor)Reduction Adjustment $ (2,949.036.00) 8 9 10 To adjust expense in the test year for WINS Related(Oncor)reductions. Refer to the direct testimony 11 of Mr.J.A.Greer and Mr.M.D.Moseley. L0 C Schedule G-5.12(D) (6,„ Page iof1 TXU GAS—DISTRIBUTION ACCOUNT RECLASSIFICATIONS/ADJUSTMENTS FOR THE TEST YEAR ENDED DECEMBER 31.2002 SPONSOR:R.K.PRUETT Line NARUC Test Yser Amount No. Ace Description Reference Labor Non-Labor Amount Adjusted (a) (b) (c) (d) (e) (I) (9) 1 Account Reclassifications/Adjustments 2 3 887 Maintenance of Mains W P/G-5.12(0) $ - $ 682,835.97 $ 682.835.97 4 920 Administrative and General Salaries WP/G-5.12(D) 1273,971.91 - 1,273,971.91 5 921 Office Supplies and Expenses WP/G-5.12(D) - 89.705.96 89,705.96 6 923 Outside Services Employed WP/G-5.12(D) - 895,539.02 895.539.02 7 926 Employee Pensions and Benefits WP/G-5.12(D) - 492.850.74 492,850.74 8 931 Rents WP/G-5.12(D) - 278.380.72 278,380.72 9 Totals $ 1,273,971.91 $ 2,439,312.41 $ 3,713,284.32 10 11 Total Account Reclassifications/Adjustments $ 3,713,284.32 12 13 14 Reclassification of O&M expense recorded in the test year from NARUC Account 813 to NARUC Accounts 887,920,921.923,926,and 931. (mor. 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E 03 ° ° 2Qo E c • V 2 0 �. 6 - O H O . O c) is W 0O maO N 0 0 C to. N CO U . UC } OCmN N } la C LL O .. r 'C 0 m ID C C .. Z ONC w 0 0 • ❑ � •c° a m U E E 2 OQJ Ca m CQQCA SE O � md O CO COx C) CCOO � QQta F- Q 0 - < I- I- I- LL F- ❑ < C O TNCO � tnCONCD0) 0 - NC') et LC) CDI000) 0TNC.) V' 0 DNCO0) 0T Z N N N N N N N N N N C') CO J Schedule G-8(D) Page 1 of 1 TXU GAS—DISTRIBUTION EXCLUDED OPERATING EXPENSES FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line NARUC No. Acct. Description Total (a) (b) (c) 1 426.1 Donations $ 207,218.86 2 3 426.4 Lobbying 13,949.94 4 5 Total Excluded Operating Expenses $ 221,168.80 6 7 8 The amounts listed above are excluded from the cost of service filing. C L k( § � ■ ee in Lk � ■ 12 § t t .. .0 � . . . co 0e Q � k � e �( m a. -- - C ; /) - 00 q C. w / \.c §i I /7 §$ /5. rs. IN IN oc <6 E�Z£ƒ « I- c 0 -- - 497 - - 24 . c & « e - - 222ek 0 3 '3 3 E >eKE 0 — oEo0) / - i /_ 2 •= . 2 _ _ - $ _ @ «« • ) -- - »2b7 W 2 E6 IN IN N ° ek$ $ _ 60) CV ) { 2oa © . k# # f 10- �2p co key 22 - 2 . co co F� 4 = 077 « - - — 2 .\f0 �® -- ® e � � To -LIJ k © 2 0 {\ ct8 aK o \ k 4 E c o E ■ ; _ " kk.-- § uj ILI§ � 2 � H i \ /)• # P. coww § _ 2 ,� � (her 25w2 _j _ A� £ 25 1._ x O. . , , O = � � 222 � , cf) 03 . 50Z a 8 -2- = #uj <i §+ t0 '0 °- � § 0g § Ae 0z � a. « £ E-- t 22co __ _ § m [f2 E2 z - �k \ �� oE\ k �� p U. k� k f £%Z � § 10 SS G Q9992 0 __ _ »\CI § 2 — *- & E $ £�i 5 o 3• /) .j o� c2 £\a , • / kE� a okeo § % %k§ .to\ / / ( kk�22- §g ciAi 8o L § §/ § _f 5 «• J •( CO& E ■ 2 � s k# k6T �k/ / . 2ka)§ § `— ■wSc-% 2 LI-I.- & k.- w ak� 2 z • ca —N ) U)(0 IN COCOo — � n- Schedule H-1 (D) Page 1 of 8 (hor TXU GAS—DISTRIBUTION OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 1 OPERATING REVENUES 2 4569000 Oth Rev-Other $ - 3 Electric-trade $ - 4 Electric-affiliated companies $ - 5 4800000 Residential Sales $ 569,092,899.63 6 4800110 Over_Under Collection-Res 4,466,032.74 7 4810100 Gas Sales-Commercial (Small) 287,510,526.85 8 4810110 Over_Under Collection-Corn 4,820,793.81 9 4810200 Ind Gas Sales To Non-Assoc Co 19,285,065.13 10 4810210 Industrial Large Sales 1,414,462.38 11 4811200 Electric Generation Small Sale 1,618.71 12 4820000 Other Sales- Public Authority 1,288,313.03 13 4830000 Gas Sales for Resale 1,968,984.12 14 4860100 Unbilled Residential Gas Rev (10,268,230.39) 15 4860200 Unbilled Commercial Gas Rev (1,924,602.34) 16 4860300 Unbilled Industrial Gas Rev (74,000.00) (Irse 17 4870000 Forfeited Discount-Residential 11,220.00 18 Gas-trade $ 877,593,083.67 19 4830111 Sales For Resale-LUG Adj $ - 20 4831401 Sales For Resale Assoc R & C - 21 4831402 Sales For Resale Assoc Indstrl - 22 4831403 Sales For Resale Assoc-ElecGen - 23 Gas-affiliated companies $ - 24 Telecommunications-trade $ - 25 Telecommunications-affiliated companies $26 4570010 Service Revenues- Pipeline $ - 27 4580000 Service Revenues-Non Assoc Cos - 28 4587000 Other Revenues - 29 4600100 Over_(Under) Recvry Adj To Rev - 30 4880200 Connect Charge 8,324,014.85 31 4880300 Return Checks 215,940.75 32 4880400 Collection Charges 30,609.45 33 4890100 Industrial Transportation 13,008,459.80 34 4890103 Ind Trans-Tax Exempt 950,589.45 35 4890110 Transp for LSG Trans-R&C - 36 4890120 Transp for LSG Trans-Indust - 37 4890140 Transp for LSG Trans-LUG Acc - 38 4890500 Electric Generation 27,741.48 39 4890544 Electric Gen-311(A)(2)-Texas - 40 4890545 Transp- Swing Fees - 41 4890550 Electric Generation -Assoc 239,363.95 42 4890554 Electric Gen 311(A)(2) -Assoc 43 4890600 Parking Transportation Revenue - 44 4890644 Parking Transp Rev-311(A)(2) - 45 4890700 Lending Transportation Revenue - 46 4890800 Pipeline 76.54 Schedule H-1 (D) Page 2 of 8 TXU GAS—DISTRIBUTION OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account-Description Amount (a) (b) 47 4890844 Pipeline-311(A)(2)-Texas - 48 4890900 Imbalance Penalties - 49 4891100 Compress Rev-Transp Customers - 50 4891200 Other Transport Related Rev 412,110.71 51 4891900 HUB Transaction Revenue - 52 4891944 HUB Trans Rev-311(A)(2)Texas - 53 4910100 Rev-Natural Gas Proc by Others - 54 4920400 Revenue From Condensate Sales - 55 4930100 Rents Gas Props Non-Assoc Cos 900.00 56 4930200 Rent Gas Property-Assoc Cos 1,390,577.25 57 4930500 Rent Gas Property-Pipeline Fee - 58 4950000 Other Gas Oil Revenue - 59 4950100 Other Gas Revenues 9,361.82 60 4950400 Other Gas Revenues -Assoc - 61 4951100 Other O&M Services Fees - 62 4951300 Other Transp Rev- Swing Fees - (Ow 63 4951400 Nonassoc Dehydration &Oth Fee 64 4951500 Other Transp Rev-Pooling 65 4951550 Oth Transp Rev-Pooling Transf - 66 4952100 Customer 0/U Collection (1,022,858.57) 67 4953200 Other Gas Rev-Stand-By Fees 3,854,176.50 68 4960100 Rent Revenue-Building - 69 Other $ 27,441,063.98 70 Total operating revenues $ 905,034,147.65 71 72 OPERATING EXPENSES 73 Fuel-trade $ - 74 Fuel-affiliated companies $ - 75 Purchased power-trade $ - 76 Purchased power-affiliated companies $ - 77 7800000 Products Purchased For Resale $ - 78 8000000 Nat Gas Well Head Purchase 34,724,700.33 79 8000010 Gas Purchase Affiliated Cos - 80 8010000 Field Line Purchases 60,669,914.13 81 8020000 Plant Outlet Purchases (8,612,848.04) 82 8030000 Transmission Line Purchases 430,685,694.33 83 8040200 City Gate Purch-Company Use - 84 8040400 City Gate Purch-Residential - 85 8040401 City Gate Purch-Res Unbilled - 86 8040500 City Gate Purch-Commercial - 87 8040501 City Gate Purch-Com Unbilled 88 8040600 City Gate Purch-Industrial 89 8040601 City Gate Purch-Ind Unbilled - 90 8040700 City Gate Purch-Public Author - 91 8040800 City Gate Purch-Elect Generate - 92 8040900 City Gate Purch-Unaccounted - Schedule H-1 (D) Page 3 of 8 (111w TXU GAS—DISTRIBUTION OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 93 8040901 City Gate Pur-Unbilled Contra - 94 8040911 City Gate Purch-LUG Adjustment - 95 8050000 Gas Purchases-Third Party (250,317.86) 96 8050800 OGP-Retention-Distrib Credit - 97 8051111 OGP-LUG Adjustment (1,158,000.00) 98 8051500 OGP-LUG Memo 22,521,419.64 99 8051600 OGP-LUG Contra (22,521,419.64) 100 8051900 OGP-Line Pack - 101 8052000 OGP-Equalization Fees (1,228,030.90) 102 8060000 Exchange Gas - 103 8061500 Exchange Gas-Assoc (10,376,852.14) 104 8061510 Exchange Gas-Assoc-Retention - 105 8061520 Exchgas-Assoc-Retention Contra - 106 8063000 Exchange Gas-Nonassoc-GMR174 - 107 8063030 System gas imbalance exp - 108 8063500 Openaccess Ferc 500-Imbal Egtc - 109 8064000 Valuat Gain_Loss-EGT_EES Recov - 110 8080000 Gas Withdrawn From Storage(N) 111 8080010 Primary Stor Gas Withdrawn Exp 16,929,499.07 112 8080020 Secondary Stor Gas Withdrawn 28,662,264.23 113 8090000 Gas Delivered To Storage(N) - 114 8090010 Primary Stor Gas Inject Exp (16,743,381.77) 115 8090020 Secondary Stor Gas Inject Exp (28,829,634.53) 116 8120000 Gas Used For Other Util Ops-CR (161,766.03) 117 8230000 Gas Losses - 118 8589100 Gas Transportation-R&C-Assoc 54,507,177.96 119 8589200 Gas Transportation-Ind-Assoc 1,313,876.89 120 8589400 Gas Transportation-LUG-Assoc (376,650.00) 121 Energy purchase $ 559,755,645.67 122 Other power expenses $ - 123 8590000 Other Transmission System $ 124 TDSP and other electric transmission charges $ - 125 4261000 Donations $ 207,218.86 126 6010000 COGS-Operating Expense - 127 7500000 Oper-Super&Engineer-Compressor - 128 7520000 Gas Wells 129 7530000 Field Line Expenses - 130 7540000 Field Compressor Expense - 131 7560000 Field Measuring&Regulating Sta - 132 7570000 Purification Expense - 133 7590000 Other Gathering System 134 7760000 Operation Supplies& Expense 135 8053000 OGP-Co Used-Comp Sta Fuel-CR - 136 8053200 OGP-Co Used-Other Oper-CR - 137 8070000 Purchased Gas Expense - 138 8072000 Oper-Measuring Stations - Schedule H-1 (D) Page 4 of 8 TXU GAS—DISTRIBUTION OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 139 8130000 Other Gas Supply Expenses 3,273,283.13 140 8140000 Oper-Supervision & Engineering - 141 8160000 Storage Wells Expense - 142 8170000 Storage Lines - 143 8180000 Compressor Station Expense - 144 8190000 Compressor Fuel & Power - 145 8200000 Storage Measuring & Reg Statn - 146 8210000 Purification Expense - 147 8240000 Other Storage - 148 8251000 Storage Well Royalties-Gas - 149 8260000 Rents-Underground Storage - 150 8500000 Oper-Supervision& Engineering - 151 8510000 System Control & Load Dispatch - 152 8520000 Communication System - 153 8530000 Compressor Station Labor& Exp - 154 8540000 Gas For Compressor Statn Fueltbir - 155 8560000 Mains Exp-Transmission System 156 8569000 Mains Exp-Transmission Sys-Gas 157 8570000 Measuring & Regulating Station - 158 8580000 Trans& Compr Of Gas By Others - 159 8581000 Gas Transport Exp-Affiliates - 160 8600000 Rents-Transmission System - 161 8700000 Oper Supervision & Engineering 526,693.25 162 8740000 Mains&Services 15,966,202.01 163 8750000 Measuring & Reg Sta-General 661,980.34 164 8770000 Measuring& Reg Sta-City Gate 255.38 165 8780000 Meter&House Regulator 7,977,093.98 166 8790000 Customer Installations Expense 1,426,857.64 167 8800000 Other Expenses 10,123,145.69 168 8810000 Rents-Distribution 37,920.31 169 9010000 Supervision-Customer Accounts (300.00) 170 9020000 Meter Reading Expenses 7,539,431.83 171 9030000 Customer Records& Collections 6,770,756.00 172 9030001 Receivables Sale Fees 1,144,866.21 173 9030002 Customer Services-Affiliate 29,334,204.00 174 9040000 Uncollectible Accounts 3,711,645.49 175 9040001 Non-CIS Related Uncollectibles 308,109.92 176 9101000 Customer Assistance (N) 3,830,118.25 177 9111000 Informational Advertising (N) 34,690.21 178 9130000 Advertising Expense(hisr - 179 9151000 Supervision(N) 1,225.64 180 9161000 Demonstrating&Selling (N) 147,654.21 181 9171000 Promotional Advertising (N) 233,410.64 182 9181000 Miscellaneous (N) 64,504.67 183 9200000 Administrative&Gen Salaries 3,203,201.41 184 9210000 Office Supplies& Expenses 520,716.87 Schedule H-1 (D) Page 5 of 8 TXU GAS—DISTRIBUTION OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 185 9220000 Administrative Exp-Transferred - 186 9230000 Outside Services Employed 19,420,071.66 187 9230002 Out Sery Empl-Energy DeVTUFCO - 188 9231000 Outside Services -Assoc Cos 9,048,186.05 189 9240002 Property Ins- Energy Del 175,803.95 190 9250002 Injuries&Damages Ins-Enrgy Del 5,641,414.99 191 9260000 Employee Pensions& Benefits 4,605,729.18 192 9260002 Empl Pension&Benefit-Enrgy Del 11,037,920.00 193 9280000 Regulatory Commission Expense 2,661,029.41 194 9301000 General Advertising Expenses 101,383.48 195 9302000 Misc General Expenses 4,531,933.86 196 9302001 Credit Line Fees- Regulated - 197 9302100 Paid Losses - 198 9302200 Change in Loss Reserves - 199 9302301 Reinsurance Premium Expense - 200 9302302 Reinsurance Premium Income - 201 9302400 Commission Income - 202 9310000 Rents-Administrative & General 187,325.58 203 9311000 Rents-Admin &General-Assoc Co - 204 9429420 Ceded Premium Expense - 205 Operation $ 154,455,684.10 206 7640000 Maint-Field Lines $ - 207 7650000 Maint-Field Compressor Station - 208 7660000 Gath Sys Meas& Reg Equip-Maint - 209 7670000 Maint-Purification Equipment - 210 8310000 Maint-Structures&Improvements - 211 8320000 Maint-Resevoirs&Wells - 212 8330000 Maint-Lines - 213 8340000 Maint-Compr Station Equip - 214 8350000 Maint-Mearsuring& Reg Equip - 215 8360000 Maint-Purification Equipment - 216 8370000 Maint-Other Storage Equipment - 217 8610000 Maint-Supervision&Engineering - 218 8620000 Maint-Structures&Improvements - 219 8630000 Maint Of Mains-Transmission - 220 8633000 Pipe - 221 8640000 Maint-Compressor Station Equip - 222 8650000 Maint-Measuring& Reg Equip - 223 8660000 Maint-Communication Equipment - 224 8670000 Maint-Other Equipment - 225 8850000 Maint-Supervision&Engineering 46,266.70 226 8860000 Maint-Structures&Improvements 65.44 227 8870000 Maintenance Of Mains 14,548,956.51 228 8890000 Maint-Meas&Reg Sta-General 1,299,798.98 229 8900000 Maint-Meas&Reg Sta-Industrial 4,958.81 230 8920000 Maintenance Of Services 3,389,048.26 Schedule H-1 (D) Page 6 of 8 TXU GAS—DISTRIBUTION OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account-Description Amount (a) (b) 231 8930000 Maint-Meter& House Regulator 1,428,802.14 232 8940000 Maint Of Other Equipment 637,448.05 233 9320000 Maintenance Of General Plant - 234 Maintenance $ 21,355,344.89 235 4031200 Depr-Transmission Plant $ - 236 4031210 Depr-Customer Sales Stations - 237 4031220 Depr-Transm Compressor Statns - 238 4031300 Depr-Distribution System 46,457,743.72 239 4031500 Depr-Gathering System - 240 4031600 Depr-Underground Storage - 241 4031710 Depr-Gen Plt-Struc& Impry 320,233.03 242 4031720 Depr-Gen Pit-Off Fum & Equip 76,087.33 243 4031770 Gen PIt-Commun Equip - 244 4031781 Depr-Gen PIt-Non-Assoc Mainfr 374,219.44 245 4031790 Depr-Gen Plt-Misc Equip 886,067.61 • 246 4031798 Depr-General Plant - (111w 247 4031921 NON-OPER DEPR EXP OFFICE FURNI - 248 4040901 OPERATING AMORTIZATION EXPENSE 1,963,848.59 249 4041920 NON-OP AMORTIZATION EXPENSE 761,562.18 250 4071000 Amort of Other Reg Asset 127,156.61 251 Depreciation and amortization $ 50,966,918.51 252 4081000 FICA $ 3,182,918.31 253 4081100 Federal- Unemployment 50,538.65 254 4081500 DOT Pipeline User Fee 30,011.15 255 4081970 Allocated Taxes FICA- Credit (3,081,975.56) 256 4081980 Allocated Taxes FUTA-Credit (61,699.21) 257 4081990 Payroll Taxes Allocated 1,287,831.18 258 4081992 Payroll Taxes Alloc-Enrgy Del 2,453,278.00 259 4082100 State- Unemployment 109,774.34 260 4082200 State Regulat Assessment&Fees 422,363.10 261 4082400 State-Gross Receipts 14,832,199.74 262 4082410 State-Local Gross Receipts 33,771,791.83 263 4082419 LGR - Denton Settlement Recove 6,072.36 264 4082500 State- Franchise 234,005.83 265 4082602 Ad Valorem - EN Del Operating 14,583,399.54 266 4082650 State-Ad Valorem-Prior Year 417.63 267 4082980 Allocated Taxes SUTA-Credit (50,159.76) 268 Taxes,other than income $ 67,770,767.13 269 Total operating expenses $ 854,304,360.30 270 271 OPERATING INCOME(LOSS) $ 50,729,787.35 272 273 4150200 Merchandise Rev-Counter Sales $ 72.19 274 4201000 AFUDC-Equity(N) - 275 4210300 Other Misc Nonoperating Income 295,398.84 276 4212000 Written Premium - Schedule H-1 (D) Page 7 of 8 (1800 TXU GAS—DISTRIBUTION OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 277 4212100 Change in Unearned Premium - 278 4220100 Disposition Of Proprty-Gain(N) 1,428,957.40 279 OTHER INCOME $ 1,724,428.43 280 281 4210200 Disposition Of Property-Loss $ - 282 4210510 Inc_Loss from Unconsol Sub - 283 4210530 Uncons Sub Earn Loss- ERINC - 284 4220200 Disposition Of Proprty-Loss(N) 130,948.00 285 4250100 Misc Amortization - 286 4263500 Penalties - Non Operating - 287 4264500 Lobbying-Other-Non Operating 9,141.53 288 4264600 Lobbying- PAC- Non Operating 4,808.41 289 4264700 Lobbying -Transferred - 290 4265000 Other Deductions - Dues - 291 4265500 Other Deductions-Non Operating - 292 OTHER DEDUCTIONS $ 144,897.94 (how 293 294 4190100 Interest& Dividend Inc-Misc $ (1,248,627.48) 295 4190200 Interest Income-Associated Cos 11,011.63 296 INTEREST INCOME $ (1,237,615.85) 297 298 INTEREST EXPENSE AND OTHER CHARGES 299 4270000 Interest On Long Term Debt $ - 300 4310100 Other Interest Expense 582,964.02 301 4310300 Customer Deposits 1,452,937.76 302 4310400 Advance For Construction 24,969.91 303 4310800 Internal Revenue Service - 304 4313100 Other Financing Fees - 305 Interest expense-trade $ 2,060,871.69 306 4300000 Interest On Debt To Assoc Cos $ 41,059,766.93 307 Interest expense-affiliated companies $ 41,059,766.93 308 4202000 AFUDC-Debt(N) $ - 309 4322000 Capitalized Interest - 310 Allowance for borrowed funds used during construction $ - 311 4280000 Amort-Debt Discount& Expense $ - 312 4290000 Amort-Premium On Debt-Credit - 313 Amortization of debt expense and loss $ - 314 4379000 Distributions- Preferred $ - 315 4379100 Accretions-Preferred Security - 316 Preferred securities distributions $ - 317 Total interest expense and other charges $ 43,120,638.62 318 319 INCOME(LOSS) BEFORE INCOME TAXES 320 AND EXTRAORDINARY ITEMS $ 7,951,063.37 321 Schedule H-1 (D) Page 8 of 8 (law TXU GAS—DISTRIBUTION OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 322 INCOME TAX EXPENSE(BENEFIT): 323 Current: 324 4091000 Current FIT- Util Oper Income $ (15,567,038.19) 325 4092000 Current FIT-Other Income 4,872,728.53 326 Federal $ (10,694,309.66) 327 State $ - 328 Foreign $ - 329 Deferred: $ - 330 4101000 Def FIT- Utility Oper Income $ 48,727,210.08 331 4111000 Def FIT- Utility Oper Income (31,022,725.96) 332 4112000 Def FIT- Non Operating Income (4,200,000.00) 333 Federal $ 13,504,484.12 334 State $ - 335 Foreign $ - 336 4114000 Investment Tax Credit $ (106,372.68) 337 Investment tax credits $ (106,372.68) 338 Total income taxes $ 2,703,801.78 339 340 INCOME(LOSS) BEFORE EXTRAORDINARY ITEMS $ 5,247,261.59 341 342 4093000 Income Tax Extraordinary Item $ - 343 4350000 Extraordinary Deductions - 344 EXTRAORDINARY ITEMS, NET OF TAX EFFECT $ - 345 346 NET INCOME(LOSS) $ 5,247,261.59 347 348 4370000 Divs Decl-Pref Stock $ - 349 4370001 Allocated Preferred Stock 1,785,850.00 350 PREFERRED STOCK DIVIDENDS $ 1,785,850.00 351 352 NET INCOME(LOSS)AVAILABLE FOR COMMON STOCK $ 3,461,411.59 353 354 355 4181000 Equity-Subsidiary Earnings $ - 356 EQUITY EARNINGS OF SUBSIDIARIES $ - L Schedule H-2 (D) Page 1 of 10 (kw TXU GAS—DISTRIBUTION S RIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 1 1010020 IS-Franchises&Consents $ 18,896.42 2 1010300 IS-Distribution System 1,553,250,945.10 3 1010301 Distribution Fee Land 252,301.19 4 1010700 IS-Gen Plant-Fee Land 1,824,730.84 5 1010710 IS-Gen Pint-Struct& Improv 16,291,801.51 6 1010720 IS-Gen Plnt-Furn & Equip 6,789,628.43 7 1010730 IS-Transportation Equipment 13,180,344.47 8 1010760 IS-Gen Pint-Power Op Equip 7,060,208.13 9 1010770 IS-Gen Pint-Comm Equip 3,332,617.96 10 1010781 IS-Gen Pint-Computer Equip-PC 2,000,751.57 11 1010790 IS-Gen Pint-Misc Equipment 14,734,742.36 12 1010900 IS-Intangible Plant 25,331,191.13 kw' 13 1070000 Construction Work In Progress 650,382,250.83 14 1079000 Construction-Credit to Plant (626,912,830.27) 15 1080300 RWIP-Distribution System 3,266,242.15 16 1080301 Non Depr-Distribution 775.00 17 1080700 Non Depr- General Plant - 18 1081300 APFD-Distribution System (45,344,217.97) 19 1081710 APFD-Structures & Improvements (439,401.96) 20 1081720 APFD-Office Furniture & Equip (76,087.33) 21 1081781 APFD-Non Associate-Mainframe (374,219.44) 22 1081790 APFD-Miscellaneous Equipment (886,067.61) 23 1082300 Retir- Distribution System 3,433,290.01 24 1082301 Retir- Non Depr-Distribution 1.00 25 1082700 Retir-Non Depr- General Plant 1,314,082.32 26 1082710 Retir-Structures& Improvements 36,486.00 27 1082900 Retir- Intangible - 28 1083300 Salv- Distribution System - 29 1083700 Salv- Non Depr- General Plant - 30 1084300 Oth Rec- Distribution System (5,506,241.24) 31 1084301 Oth Rec- Non Depr-Distribution (776.00) 32 1084700 Oth Rec-Non Depr-General Plant (1,121,502.73) 33 1084730 Oth Rec-Transportation Equipme (87,609.75) 34 1086300 Distribution- Beg Bal (469,644,719.22) 35 1086710 Structr and Improvmnts-Beg Bal (6,074,259.76) 36 1086720 Office Fum and Equip-Beg Bal (6,085,943.41) 37 1086730 Transp Equip-Beg Bal (10,646,120.82) (asv 38 1086760 Power Operated Equip-Beg Bal (7,032,128.57) 39 1086770 Communication Equip- Beg Bal (3,177,040.98) 40 1086781 Non-assoc Mainframe- Beg Bal (1,093,024.83) 41 1086790 Miscellaneous Equip-Beg Bal (10,526,673.74) 42 1111000 Amortization- Plant (10,012,156.73) Schedule H-2 (D) Page 2 of 10 (h.„ TXU GAS—DIS TRIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 43 1113000 Amortization-Other (7,231.02) 44 UTILITY PLANT $ 1,097,453,033.04 45 1211000 Real Estate 9,768.22 46 1231000 Advances To Assoc Cos- MP 47 1240000 Other Investments 51,916.29 48 1241200 Other- Misc Investments 429,386.11 49 1245500 Salary Deferral-7Yr Foundation 144,851.54 50 1245600 Salary Defer-Retire Foundation 70,421.96 51 1247000 Prepaid-Gas - 52 INVESTMENTS $ 706,344.12 53 1310000 Cash-Chase Bank of TX-Pre FIM - 54 1317214 Cash-Chase-0991-3rd Party Coll 842,121.33 (ifiro 55 1317267 Cash- Bank of America 2668 533,428.06 56 1317511 Cash-BofA-0009-Common 57 1317512 Cash-Chase-9197-CIS Common 1,617,359.11 58 1410000 Notes Receivable-Current 18,052.87 59 1420000 Customer Accounts Receivable 76,674.76 60 1420500 Returned Checks - 61 1422000 Gas-CIS 69,992,916.04 62 1422010 Gas A_R-Gas Master 3,144,844.69 63 1422400 CIS AR Estimate 880,872.83 64 1423100 Sale of Gas Receivables (66,589,000.87) 65 1423200 Notes Receivable from ERINC 45,399,280.19 66 1428000 Customer AR Split to CIS (782,857.52) 67 1430100 Other Misc Accounts Receivable 1,341,889.84 68 1430200 Estimates 4,834,118.48 69 1431000 Payroll Deduction -Other 3,938.49 70 1431060 Energy Conservation 307,265.63 71 1431110 Appliances 315,615.16 72 1432500 Customer Refund Forgery 670.36 73 1438000 Customer AR Split from CIS (3,333.82) 74 1439000 Misc Rec AR Module Only 4,888,034.67 75 1439100 GCBS Only-Accounts Receivable 45,877.67 76 1440000 Uncollectible Accounts-Credit (2,046,277.52) 77 1440100 Uncollectible Accounts-Misc (1,235,877.92) 78 1440200 Sale Of Car-Credit 412,660.19 79 1460000 A_R -Associated Companies 226,799,826.81 80 1460220 LUG Deferral Asset-Affil 81 1469000 A_R-Associated Cos-Advances - 82 1545000 Materials & Supp-PMMS Normal 1,546,174.61 83 1550000 Merchandise 0.01 84 1631100 Purchasing &Stores 2,231,039.00 Schedule H-2 (D) Page 3 of 10 (we TXU GAS—DISTRIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 85 1632000 Purchasing &Stores-Kitting (99,462.73) 86 1634000 Stores Sales & Use Tax 222,858.51 87 1640010 Gas Stored Underground-Primary 46,735,524.53 88 1640020 Gas Stored Underground-Secndry 62,654,424.50 89 1652100 Insurance 874,920.51 90 1659000 Other Prepayments 1,412,510.58 91 1661100 Prepayments-Gas (N) - 92 1661110 Prepayments-Gas Reclassed (N) - 93 1710000 Other Interest& Div Receivble 383.26 94 1730100 Gas 26,955,022.14 95 1741230 Exchange Gas - 96 1746000 Home Purchase Plan - (kw 97 CURRENT ASSETS $ 433,331,494.45 98 1742100 Customer 0/U Col. - Principal 77,921,180.00 99 1742200 Customer 0/U Col. - Interest 435,362.00 100 1829900 Other Regulatory Assets 12,259,711.00 101 1842100 Variable Time - 102 1842400 Variable Time Loading 779,653.03 103 1842409 Variable Time Loading (Credit) (624,330.13) 104 1860100 Misc Deferred Debit-Other 1,507.48 105 1860700 Deferred Tax-City Gas Company - 106 1861101 Job Order-Rate Case-Gen Exp 12,079,570.74 107 1862300 Job Order-Insurance Recoveries 644,568.15 108 1862700 Job Orders 1,102.11 109 1864500 Misc Def DR-TUFCO Contract - 110 1866100 Subj To Amort-Rate Case Exp 223,543.81 111 1866300 1999 Severance Costs 3,138,782.19 112 1866310 1997 Enhanced Retirement Plan 16,175,827.02 113 1866320 WINS Project Cost 881,674.13 114 1866350 Polypipe Replacement 43,149,008.85 115 1868550 SDP Unamort Co Match-7Yr Found 34,969.79 116 1868560 SDP Unamort Co Match Retiree 50,612.35 117 1868900 Money Pool-Contrib To_From (0.33) 118 1869000 Miscellaneous Deferred Debits 2,470,877.28 119 1869900 Validation Fatals - 120 DEFERRED DEBITS $ 169,623,619.47 121 1900000 Accum Def Federal Income Tax 144,431.07 122 1900001 ADFIT-PEP 48,890.32 123 1900002 ADFIT-Bad Debt Reserve 526,058.15 124 1900004 ADFIT-Vacations 652,133.09 125 1902001 ADFIT-Property Insuranc Resery 781,483.59 126 1902002 ADFIT-DCIP Amortization - Schedule H-2 (D) Page 4 of 10 Lo` TXU GAS—DISTRIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 127 1902004 ADFIT-LESOP 115,958.83 128 1902013 ADFIT-Pension Plan 6,561,625.13 129 1902020 ADFIT-Salary Def Plan 7 Yr Opt 38,449.26 130 1902021 ADFIT-Salary Def Plan Ret Opt 50,479.31 131 1902023 ADFIT-OPEB and FAS 112 20,591,279.42 132 1902025 ADFIT-Provided For Misc Recv 298,337.73 133 1902033 ADFIT-Unamortized ITC 1,069,705.01 134 1902035 ADFIT-ALT Minimum Tax 193,495.28 135 1902040 ADFIT-Ins Claims IBNR Accrual 201,777.46 136 1902058 ADFIT- Restoration &COLA Plan 506,110.27 137 1903110 DFIT-Purchase Acctg Adjustment 581,639.06 138 1904013 ADFIT Regulatory Settlement 4,200,000.00 tie 139 ACCUMULATED DEFERRED TAX ASSETS $ 36,561,852.98 140 141 TOTAL ASSETS $ 1,737,676,344.06 142 143 2040801 Allocated Preferred Stock $ 37,500,000.00 144 2049101 Allocated Preferred Securities 55,251,000.00 145 2110000 Miscellaneous Paid-In Capital 50,046,434.96 146 2111000 Miscellaneous Paid-In Capital 47,685,000.00 147 2160000 Unappropriated Ret Earnings 359,383,478.30 148 2160200 Purchase Accounting Adjustment (43,829,217.35) 149 2230000 Advances from Assoc Cos - MP 326,617,424.79 150 2240009 Allocated Lng Term Debt fr ENS 207,742,000.00 151 2320200 A_P-Gas Purchased 105,199,111.91 152 2320220 AP-Gas Purchase-LUG Adjustmnt - 153 4393200 Other Compreh Income- Pensions (11,483,948.45) 154 CAPITAL $ 1,134,111,284.16 155 2320300 Other Accounts Payable 83,294.70 156 2321900 PED - Loans (65,516.38) 157 2321901 ENSAVE Loans - 158 2321902 PED- Bankruptcy 3,588.00 159 2321903 PED-Child Support 800.86 160 2321904 PED- Parking - 161 2321909 PED - Dependent Life Insurance (163.62) 162 2321911 Group Universal Life Ins 13,157.88 163 2321912 Vision Care (920.46) 164 2321914 PED- IRS Levy 525.25 165 2321916 PED-TU PAC 1,170.05 166 2321919 PED- Student Loans 1,230.24 167 2321920 PED-Thrift Plan Collections 165,478.56 168 2321921 PED- U.S. Savings Bonds 225.00 Schedule H-2 (D) Page 5 of 10 TXU GAS—DISTRIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 169 2321922 ENSAVE Plan Collections - 170 2321924 PED - United Way 2,220.50 171 2321925 Lifestyle Account 8,530.66 172 2321928 PED-Thrift Loan Fees - 173 2321930 Thrift Plan- Employer Match 57,019.74 174 2321931 Voluntary Benefits 571.92 175 2321932 Accidental D&D 2,800.08 176 2321933 LT Disability 11,306.92 177 2322401 Employee Group Life Insurance 3,508.84 178 2322402 Retiree Dental Insurance 316.46 179 2322403 Retiree Medical Insurance 82,357.43 180 2323000 Retentions 964,660.02 181 2324000 Trade Payables&Vouchers 3,428,214.37 182 2324100 CIS-Customer Refunds 845,897.36 183 2324199 Customer Refunds - Mellon - 184 2324600 Managers Fund - Refunds 8,805.77 185 2327600 Customer Assistance 184,744.47 186 2328900 O_S Checks-Money Pool 6,755,706.57 187 2328910 O_S Checks-Gas Purchase 47,264.40 188 2328950 EDI Payments Outstanding 745,563.65 189 2340000 A_P-Associated Companies 232,526,883.17 190 2340220 LUG Deferral Liab-Affil - 191 2351000 Customer Deposits -Active 24,466,145.95 192 2351100 Long-Term Contra (14,901,271.00) 193 2352000 Unclaimed 385,137.64 194 2353000 Billed 2,416,000.56 195 2361000 FICA- Employer 301,346.16 196 2361100 Accrd Federal Unemployment Tax 48.17 197 2361550 Accrued DOT Pipeline User Fee 4,784.50 198 2362100 Accrued State Unemployment Tax 99.49 199 2362200 State Regulat Assessment&Fees 128,369.19 200 2362400 State-Gross Receipts 166,063.32 201 2362410 Local-Gross Receipts 2,815,936.96 202 2362600 State-Ad Valorem-Current Year 12,377,269.24 203 2362610 State-Ad Valorem-Prior Year - 204 2362700 State-Other- Full Accrual 289,202.10 205 2362720 Local-Other-City Accrual - 206 2363800 FIT-Accrual (11,414,493.43) 207 2375000 Interest Accr-Customer Deposit 5,834,404.04 208 2376000 Accr Int-Advances for Construc 124,993.33 209 2411000 FICA Withheld 144,028.23 210 2411200 FIT-Withheld- Income Tax 250,386.30 Schedule H-2 (D) Page 6 of 10 (itee TXU GAS—DISTRIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31, 2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 211 2411450 3rd Party Transport Tax Estima 320,269.40 212 2412200 SIT Withheld - Income Tax 353.00 213 2412400 State-Gross Production 640.63 214 2412450 Local Gross Rec-Third Party 643,925.46 215 2412460 Local Gross Receipts -CIAC 158.30 216 2412500 Oil Field Clean Up Fee 1.43 217 2412700 State -Other-Accrual - 218 2412710 State-Other-Accrual -State - 219 2412720 State-Other-Accrual- City - 220 2412750 State-Other-Accrual - SPD - 221 2412800 Sales Tax Collected -CIS Only 2,827,676.88 222 2421160 Escheat-Customer Overpay(111W - 223 2421170 Escheat- Other 8,185.25 224 2421230 Exchange Gas 1,550,513.78 225 2421615 Exchange Gas-Imbalance-Affil - 226 2423400 Vacation 318,111.47 227 2423900 Other Accrued Payables 4,602,212.93 228 2424000 Payroll Accrual 707,338.95 229 2424100 Accrued Incentive Plans 1,360,200.00 230 2429300 Corporate Accruals 3,835,465.21 231 2429900 Other Accrued Liabilities 121,128.80 232 CURRENT LIABILITIES $ 285,563,874.65 233 2520100 Customer Advances For Construc 5,031,889.35 234 2520200 D I P Contracts 3,027,245.36 235 2530001 FAS 109-Unamortized ITC 1,069,705.01 236 2531000 IBNR - Medical & Dental Claims 878,864.00 237 2533300 Retirement Plan 36,844,499.49 238 2533500 FAS 112 1,779,528.00 239 2533900 OPEB-Other 57,697,452.98 240 2534000 Leveraged ESOP 331,311.06 241 2535500 Salary Deferral-7Yr Foundation 144,824.59 242 2535600 Salary Defer-Retire Foundation 194,838.95 243 2538010 Customer Deposits- Non Curr 14,901,271.00 244 2539000 Other Deferred Credits 1,678,888.38 245 2539050 Defer Cr-Cust Contributions 527,867.77 246 2539120 Restoration Plan 126,181.02 (mir 247 2539160 Enserch COLA Plan 1,319,884.19 248 2542100 Regulatory Liability 28,122,356.72 249 2551000 Accumulated Deferred ITC 3,935,789.00 250 2553000 Rate Base Amortization (1,949,194.04) 251 2620000 Injuries & Damages Reserve (N) 1,284,500.00 252 DEFFERRED CREDITS $ 156,947,702.83 Schedule H-2 (D) Page 7 of 10 TXU GAS—DISTRIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 253 2822001 ADFIT-Liberalized Depreciation 130,495,386.26 254 2822002 ADFIT-CWIP-Basis Difference 2,718,822.79 255 2822011 ADFIT-Oth Software DevelopCost 649,597.12 256 2822023 ADFIT-InterCo Transf Gain_Loss (476.40) 257 2822027 ADFIT-Polypipe Replacement 15,102,152.94 258 2832000 ADFIT-Other (6,183,664.55) 259 2832002 ADFIT-Other Regulatory Expense 4,202,265.16 260 2832031 ADFIT-1999 Enh Emp Separ Prog 312,082.31 261 2832039 ADFIT-WINS Costs 294,699.94 262 2835600 ADFIT on Reg Asset Bens-Mergr 10,001,205.26 263 ACCUMULATED DEFERRED TAX LIABILITIES $ 157,592,070.83 264 265 TOTAL LIABILITIES $ 1,734,214,932.47 266 267 4800000 Residential Sales $ 569,092,899.63 268 4800110 Over_Under Collection-Res 4,466,032.74 269 4810100 Gas Sales-Commercial (Small) 287,510,526.85 270 4810110 Over_Under Collection-Corn 4,820,793.81 271 4810200 Ind Gas Sales To Non-Assoc Co 19,285,065.13 272 4810210 Industrial Large Sales 1,414,462.38 273 4811200 Electric Generation Small Sale 1,618.71 274 4820000 Other Sales- Public Authority 1,288,313.03 275 4830000 Gas Sales for Resale 1,968,984.12 276 4860100 Unbilled Residential Gas Rev (10,268,230.39) 277 4860200 Unbilled Commercial Gas Rev (1,924,602.34) 278 4860300 Unbilled Industrial Gas Rev (74,000.00) 279 4870000 Forfeited Discount-Residential 11,220.00 280 4880200 Connect Charge 8,324,014.85 281 4880300 Return Checks 215,940.75 282 4880400 Collection Charges 30,609.45 283 4890100 Industrial Transportation 13,008,459.80 284 4890102 Ind Trans Billed for LSGTR - 285 4890103 Ind Trans-Tax Exempt 950,589.45 286 4890104 Ind Trans- LSP-Tax Exempt - 287 4890500 Electric Generation 27,741.48 288 4890550 Electric Generation-Assoc 239,363.95 289 4890800 Pipeline 76.54 290 4891200 Other Transport Related Rev 412,110.71 291 4930100 Rents Gas Props Non-Assoc Cos 900.00 292 4930200 Rent Gas Property-Assoc Cos 1,390,577.25 293 4950100 Other Gas Revenues 9,361.82 294 4952100 Customer 0/U Collection (1,022,858.57) Schedule H-2 (D) Page 8 of 10 Cr TXU GAS—DISTRIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31, 2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 295 4953200 Other Gas Rev-Stand-By Fees 3,854,176.50 296 REVENUES $ 905,034,147.65 297 4031300 Depr-Distribution System 46,457,743.72 298 4031710 Depr-Gen PIt-Struc& Impry 320,233.03 299 4031720 Depr-Gen Plt-Off Furn & Equip 76,087.33 300 4031781 Depr-Gen Plt-Non-Assoc Mainfr 374,219.44 301 4031790 Depr-Gen Plt-Misc Equip 886,067.61 302 4040901 OPERATING AMORTIZATION EXPENSE 1,963,848.59 303 4041920 NON-OP AMORTIZATION EXPENSE 761,562.18 304 4071000 Amort of Other Reg Asset 127,156.61 305 4081000 FICA 3,182,918.31 306 4081100 Federal - Unemployment 50,538.65 (kW 307 4081500 DOT Pipeline User Fee 30,011.15 308 4081970 Allocated Taxes FICA- Credit (3,081,975.56) 309 4081980 Allocated Taxes FUTA-Credit (61,699.21) 310 4081990 Payroll Taxes Allocated 1,287,831.18 311 4081992 Payroll Taxes Alloc-Enrgy Del 2,453,278.00 312 4082100 State- Unemployment 109,774.34 313 4082200 State Regulat Assessment&Fees 422,363.10 314 4082400 State-Gross Receipts 14,832,199.74 315 4082410 State- Local Gross Receipts 33,771,791.83 316 4082419 LGR - Denton Settlement Recove 6,072.36 317 4082500 State- Franchise 234,005.83 318 4082602 Ad Valorem - EN Del Operating 14,583,399.54 319 4082650 State-Ad Valorem-Prior Year 417.63 320 4082980 Allocated Taxes SUTA-Credit (50,159.76) 321 4261000 Donations 207,218.86 322 8000000 Nat Gas Well Head Purchase 34,724,700.33 323 8010000 Field Line Purchases 60,669,914.13 324 8020000 Plant Outlet Purchases (8,612,848.04) 325 8030000 Transmission Line Purchases 430,685,694.33 326 8050000 Gas Purchases-Third Party (250,317.86) 327 8051111 OGP-LUG Adjustment (1,158,000.00) 328 8051500 OGP-LUG Memo 22,521,419.64 329 8051600 OGP-LUG Contra (22,521,419.64) 330 8052000 OGP-Equalization Fees (1,228,030.90) (kw 331 8061500 Exchange Gas-Assoc (10,376,852.14) 332 8080010 Primary Stor Gas Withdrawn Exp 16,929,499.07 333 8080020 Secondary Stor Gas Withdrawn 28,662,264.23 334 8090010 Primary Stor Gas Inject Exp (16,743,381.77) 335 8090020 Secondary Stor Gas Inject Exp (28,829,634.53) 336 8120000 Gas Used For Other Util Ops-CR (161,766.03) Schedule H-2 (D) Page 9 of 10 (twr TXU GAS—DISTRIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 337 8130000 Other Gas Supply Expenses 3,273,283.13 338 8589100 Gas Transportation-R&C-Assoc 54,507,177.96 339 8589200 Gas Transportation-Ind-Assoc 1,313,876.89 340 8589400 Gas Transportation-LUG-Assoc (376,650.00) 341 8700000 Oper Supervision& Engineering 526,693.25 342 8740000 Mains &Services 15,966,202.01 343 8750000 Measuring & Reg Sta-General 661,980.34 344 8770000 Measuring& Reg Sta-City Gate 255.38 345 8780000 Meter& House Regulator 7,977,093.98 346 8790000 Customer Installations Expense 1,426,857.64 347 8800000 Other Expenses 10,123,145.69 348 8810000 Rents-Distribution 37,920.31 349 8850000 Maint-Supervision&Engineering 46,266.70 350 8860000 Maint-Structures&Improvements 65.44 351 8870000 Maintenance Of Mains 14,548,956.51 352 8890000 Maint-Meas&Reg Sta-General 1,299,798.98 353 8900000 Maint-Meas&Reg Sta-Industrial 4,958.81 354 8920000 Maintenance Of Services 3,389,048.26 355 8930000 Maint-Meter& House Regulator 1,428,802.14 356 8940000 Maint Of Other Equipment 637,448.05 357 9010000 Supervision-Customer Accounts (300.00) 358 9020000 Meter Reading Expenses 7,539,431.83 359 9030000 Customer Records &Collections 6,770,756.00 360 9030001 Receivables Sale Fees 1,144,866.21 361 9030002 Customer Services-Affiliate 29,334,204.00 362 9040000 Uncollectible Accounts 3,711,645.49 363 9040001 Non-CIS Related Uncollectibles 308,109.92 364 9101000 Customer Assistance (N) 3,830,118.25 365 9111000 Informational Advertising (N) 34,690.21 366 9151000 Supervision(N) 1,225.64 367 9161000 Demonstrating &Selling (N) 147,654.21 368 9171000 Promotional Advertising (N) 233,410.64 369 9181000 Miscellaneous (N) 64,504.67 370 9200000 Administrative&Gen Salaries 3,203,201.41 371 9210000 Office Supplies& Expenses 520,716.87 372 9230000 Outside Services Employed 19,420,071.66 (kw 373 9231000 Outside Services -Assoc Cos 9,048,186.05 374 9240002 Property Ins- Energy Del 175,803.95 375 9250002 Injuries&Damages Ins-Enrgy Del 5,641,414.99 376 9260000 Employee Pensions& Benefits 4,605,729.18 377 9260002 Empl Pension&Benefit-Enrgy Del 11,037,920.00 378 9280000 Regulatory Commission Expense 2,661,029.41 Schedule H-2 (D) Page 10 of 10 TXU GAS—DISTRIBUTION TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Twelve Months Line Ended No. Account/Description December 31,2002 (a) (b) 379 9301000 General Advertising Expenses 101,383.48 380 9302000 Misc General Expenses 4,531,933.86 381 9310000 Rents-Administrative& General 187,325.58 382 OPERATING EXPENSES $ 854,304,360.30 383 4190100 Interest& Dividend Inc-Misc (1,248,627.48) 384 4190200 Interest Income-Associated Cos 11,011.63 385 INTEREST INCOME $_ (1,237,615.85) 386 4150200 Merchandise Rev-Counter Sales 72.19 387 4210300 Other Misc Nonoperating Income 295,398.84 388 4220100 Disposition Of Proprty-Gain(N) 1,428,957.40 389 OTHER INCOME $ 1,724,428.43_ 390 4220200 Disposition Of Proprty-Loss(N) 130,948.00 391 4264500 Lobbying-Other-Non Operating 9,141.53 392 4264600 Lobbying - PAC- Non Operating 4,808.41 393 DEDUCTIONS $ 144,897.94 394 4300000 Interest On Debt To Assoc Cos 41,059,766.93 395 4310100 Other Interest Expense 582,964.02 396 4310300 Customer Deposits 1,452,937.76 397 4310400 Advance For Construction 24,969.91 398 INTEREST $ 43,120,638.62 399 4091000 Current FIT- Util Oper Income (15,567,038.19) 400 4092000 Current FIT-Other Income 4,872,728.53 401 4101000 Def FIT- Utility Oper Income 48,727,210.08 402 4111000 Def FIT- Utility Oper Income (31,022,725.96) 403 4112000 Def FIT- Non Operating Income (4,200,000.00) 404 4114000 Investment Tax Credit (106,372.68) 405 INCOME TAXES $ 2,703,801.78 406 DISCONTINUED OPS $ - 407 EXTRAORDINARY ITEMS $ - 408 409 NET INCOME BEFORE EQUITY EARNINGS $ 5,247,261.59 410 411 EQUITY EARNINGS - 412 413 NET INCOME $ 5,247,261.59 414 415 4370001 Allocated Preferred Stock 1,785,850.00 416 RETAINED EARNINGS $ 1,785,850.00 417 418 TOTAL DEBITS& CREDITS $ 0.00 Schedule I(D) Page 1ot1 TXU GAS—DISTRIBUTION (11Pv SUMMARY OF RETURN FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:B.H.FAIRCHILD Line Present Proposed Schedule No. Description Rates Rates Reference (a) (b) (c) (d) 1 Net Operating Income/Return 2 3 Cost of Debt 6.71% $ 34,861,725 $ 34,861,725 4 Cost of Preferred Stock 5.53% 619,689 619,689 5 Available or Required Return on 6 Book Value of Common Equity 23.765,589 56,116.364 7 8 Total Return on Invested Capital $ 59,247,003 $ 91,597,779 A-1 9 10 Rate Base-Capitalization Structure 11 12 Debt 51.00% $ 519,548,804 $ 519,548,804 13 Preferred Stock 1.10% 11,205,955 11,205,955 14 Common Equity at Book Value 47.90% 487.968,387 487,968,387 15 16 Total Invested Capital $ 1,018,723,146 $ 1,018,723,146 B 17 18 Percent Return-After Tax 19 20 Cost of Debt 6.71% 6.71% 21 Cost of Preferred Stock 5.53% 5.53% 22 Return on Book Value of Common Equity 4.87% 11.50% 23 Le 24 Percent Return-After Tax 5.82% 8.99% • CO N et N O O M CO 0) CD OD U) et CO et M 0 CD N 0) CD 'C LO CO U) Q: o O) N 0 to O N U) N N O O CO '� CD .- N et N C7 U) qt. t. .- ►. r- N O ^ O O co N 0 0) of N O Q 0 of 8 r- -. 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Jd2OO LL 52 WW z0»1 ov o O83o Off; ]Z W U W 2LLtq�JJ 1 O O 4 5giii _V . 2=0 f-O W< N 0 1 2 2 W~W W • W W �W W: i RW Q dl dl 0F0E- y0 hW U00 J` s0< < _Z 2ZS z2Z Z 2-EW F?F X 2Oa2Wt~/)Jy EN F' F lc d<W W J JJ- JJ J J J J o o2za 22IWLU U Z O Ypp11(¢��0 0 pp m� p��((yy((D� SO0��pp m�pp�� ten, {mom m ?_ -N{'1 .OfOn 0)ce O-Nl7♦Yl0 nm Ola\I NNR N N[NNly Rjl�ll�ll7l7{Al7l�MX5 f<f f 3V.4. (1111 Schedule L-1 (D) Page 1 of 3 TXU GAS—DISTRIBUTION RATE DESIGN CALCULATION FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G.L. GOBLE Line No. Description Total Reference (a) (b) (c) Residential 1 Residential Revenue Requirement 615,166.669 Schedule K(D) 2 Less Revenue Related Taxes CO 33,938,797 Schedule K(D) 3 Less Gas Cost 276,494,298 Schedule K(D) 4 Less Revenue From Customer Charge($12'Annual Customers) 193,540.320 WP/K-6/6,Schedule J-1 5 Revenue Required From Commodity Rate $ 111,193.253 6 7 Residential Block 1 MCF(0-3 Mcf) 33,535,700 WP/L-1/14(D) 8 Residential Block 2 MCF(Over 3 Mcf) 51,907,154 WP/L-1/14(D) 9 10 Total Residential MCF 85,442,854 Schedule J-1 (D) 11 12 Revenue Required From Commodity Rate $111,193,253 13 Plus(Block 2 MCF'0.25) $12,976,788 14 Total $124,170,042 15 16 Two Step Rate 17 Block 1 Commodity Rate(Mcf) 1.4533 line 14/line 10 18 Block 2 Commodity Rate(Mcf) 1.2032 line 17 minus$0.25 19 20 Customer Charge Revenue 193,540.320 line 4 21 Block 1 Commodity Rate Revenue 48,737,433 line 17 times line 7 (1110" 22 Block 2 Commodity Rate Revenue 62,454,688 line 18 times line 8 23 Revenue Related Taxes Revenue 33,938,797 line 2 24 Gas Cost Revenue 276,494,298 line 3 25 Total Revenue $615,165,536 26 27 28 C (1109 Schedule L-1 (D) Page 2 of 3 TXU GAS—DISTRIBUTION RATE DESIGN CALCULATION FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G.L. GOBLE Line No. Description Total Reference (a) (b) (c) Commercial 1 Commercial Revenue Requirement 289.846,989 Schedule K(D) 2 Less Revenue Related Taxes© 15,990,883 Schedule K(D) 3 Less Gas Cost 173,465.963 Schedule K(D) 4 Less Revenue From Customer Charge($20*Annual Customers) 30,144,720 WP/K-6/6,Schedule J-1 5 Revenue Required From Commodity Rate $ 70.245.423 6 7 Commercial Block 1 MCF(0-30 Mcf) 15,383,564 WP/L-1/15(D) 8 Commercial Block 2 MCF(30-350 Mcf) 28,777,471 WP/L-1/15(D) 9 Commercial Block 3 MCF(Over 350 Mcf) 9,443,784 WP/L-1/15(D) 10 11 Total Commercial MCF 53.604,820 12 13 Revenue Required From Commodity Rate $70,245,423 14 Plus(Block 2 MCF*0.25) $7,194,368 15 Plus(Block 3 MCF'0.5) $4,721,892 16 Total $82,161,683 17 Three Step Rate 18 Block 1 Commodity Rate(Mcf) 1.5327 line 16/line 11 19 Block 2 Commodity Rate(Mcf) 1.2827 line 20 minus 0.25 20 Block 3 Commodity Rate(Mcf) 1.0329 line 20 minus 0.50 21 (16., 22 Customer Charge Revenue 30,144,720 line 4 23 Block 1 Commodity Rate Revenue 23,578,389 line 18 times line 7 24 Block 2 Commodity Rate Revenue 36,912,863 line 19 times line 8 25 Block 3 Commodity Rate Revenue 9,754,485 line 20 times line 9 26 Revenue Related Taxes Revenue 15,990.883 line 2 27 Gas Cost Revenue 173,465,963 line 3 28 Total Revenue $289,847,301 29 30 Block 3 Commodity Rate(MMBTU) 1.0087 L tbe Schedule L-1 (D) Page 3 of 3 TXU GAS—DISTRIBUTION RATE DESIGN CALCULATION FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G.L. GOBLE Line No. Description Total Reference (a) (b) (c) Industrial Sales/Transportation 1 Revenue Requirement 48,237,172 Schedule K(D) 2 Less Revenue from Customer Charge($150*Annual Customers) 2,374,200 WP/K-6/6,Schedule J-1 3 Less Revenue Related Taxes 2,661,249 Schedule K(D) 4 Less Gas Cost 9,433,401 Schedule K(D) 5 Revenue Required From Commodity Rate $ 33,768.322 6 7 Industrial Block 1 MCF(0-1,500) 8,935,784 WP/L-1/17(D) 8 Industrial Block 2 MCF(Next 3,500) 12,905,297 WP/L-1/17(D) 9 Industrial Block 3 MCF(Next 45,000) 25,863,736 WP/L-1/17(D) 10 Industrial Block 4 MCF(Over 50,000) 13,936,083 WP/L-1/17(D) 11 Total Industrial/Transportation MCF 61,640,901 12 13 Revenue Required From Commodity Rate 33,768,322 14 Plus(Block 2 MCF*0.15) 1,935,795 15 Plus(Block 3 MCF*0.3) 7,759,121 16 Plus(Block 3 MCF*0.45) 6,271,237 17 Total $49,734,475 18 Lie 19 Block 1 Commodity Rate(Mcf) $0.8068 line 18/line 12 20 Block 2 Commodity Rate(Mcf) $0.6568 line 20-0.15 21 Block 3 Commodity Rate(Mcf) $0.5068 line 20-0.30 22 Block 4 Commodity Rate(Mcf) $0.3569 line 20-0.45 23 Customer Charge Revenue 2,374,200 line 2 24 Block 1 Commodity Rate Revenue 7,209,391 line 22 times line 8 25 Block 2 Commodity Rate Revenue 8,476,199 line 23 times line 9 26 Block 3 Commodity Rate Revenue 13,107,742 line 24 times line 10 27 Block 4 Commodity Rate Revenue 4,973,788 line 25 times line 11 28 GCA Revenue 9,433,401 line 4 29 Revenue Related Taxes 2,661,249 line 3 30 Total Revenue $48,235,969 31 32 Block 1 Commodity Rate(MMBtu) $0.7879 33 Block 2 Commodity Rate(MMBtu) $0.6414 34 Block 3 Commodity Rate(MMBtu) $0.4949 35 Block 4 Commodity Rate(MMBtu) $0.3485 C Q T —0 N r L. 2.1 a) a) ca -a a 'O a) L C.) 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CD N O.� c� 0 69 69 • hL. .- 0OJ C 9 Z ww O 0 CND N. aD N. N C)) N CO CC 0y) C7) CD N CD C7) 00 CO m l. 00 fl � N � H � N O W Q I- J w O O N 0 O 0J t!) O CD N O Q cc " Cfi 69 69 69 0 0U. m m, .� CO es in E Q a Ta 0 m col? a)mp) L 0 al rn 0 m m m o) m t 0-7C15 t o 0 0 0 .) o CO c m E Cr a m ✓• m C V m m co V) 0 Cl) ¢ iL l— c' iJ2 .- NCDeltotO � mO ° ,_ TXU GAS-DISTRIBUTION Schedule L-3 (D) (karr SUMMARY PROOF OF REVENUE AT PROPOSED RATES Page 1 of 3 FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G. L.GOBLE Line Description Total Reference (a) (b) (c) (d) 1 TOTAL RESIDENTIAL 2 3 4 Rate Characteristics: 5 Customer Charge $12.00 Schedule L-1 page 1 6 Block 1 $1.4533 Schedule L-1 page 1 7 Block 2 $1.2032 Schedule L-1 page 1 8 9 Gas Cost $3.1522 WP/L-1/13 10 Volume Factor 1.0266 WP/L-1/4 11 12 13 14 Consumption Characteristics: 15 Block 1 0.39249 16 Block 2 0.60751 17 18 Billing Units: 19 Bills 16,128,360 Schedule J-1 20 Block 1 33,535,700 line 22 times line 15 21 Block 2 51,907,154 line 22 times line 16 22 Total MCF 85,442,854 Schedule J-1 23 Base Rate Revenue: 24 Customer Charge Revenue $193,540,320 WP/L-3/1 (D) 25 Block 1 48,737,433 WP/L-3/1 (D) 26 Block 3 62,454,688 WP/L-3/1 (D) 27 Total Base Revenue $304,732,441 28 29 Gas Cost Adjustment 276,494,298 WP/L-3/1 (D) 30 Subtotal 581,226,739 31 Revenue Related Taxes 33,938,731 WP/L-3/1 (D) 32 Total Annual Gross Revenue $615,165,470 TXU GAS-DISTRIBUTION Schedule L-3 (D) (100. SUMMARY PROOF OF REVENUE AT PROPOSED RATES Page 2 of 3 FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G. L.GOBLE Line Description Total Reference (a) (b) (c) (d) 1 TOTAL COMMERCIAL 2 3 4 5 Rate Characteristics; 6 Customer Charge $20.00 Schedule L-1 page 2 7 Block 1 $1.5327 Schedule L-1 page 2 8 Block 2 $1.2827 Schedule L-1 page 2 9 Block 3 $1.0329 Schedule L-1 page 2 10 11 12 Gas Cost $3.1522 WP/L-1/13 13 Volume Factor 1.0266 WP/L-1/4 14 15 16 17 Consumption Characteristics: 18 Block 1 0.2870 19 Block 2 0.5368 20 Block 3 0.1762 21 22 Billing Units: 23 Bills 1,507,236 Schedule J-1 24 Block 1 15,383,564 line 27 times line 18 25 Block 2 28,777,471 line 27 times line 19 26 Block 3 9,443,784 line 27 times line 20 27 Total MCF 53,604,820 Schedule J-1 28 29 Base Rate Revenue: 30 Customer Charge Revenue 30,144,720 WP/L-3/2(D) 31 Block 1 23,578,389 WP/L-3/2 (D) 32 Block 2 36,912,863 WP/L-3/2(D) 33 Block 3 9,754,485 WP/L-3/2 (D) 34 Total Base Rate Revenue $100,390,456 35 36 Gas Cost 173,465,963 WP/L-3/2 (D) 37 Subtotal 273,856,418 38 Revenue Related Taxes 15,990,901 WP/L-3/2 (D) 39 Total Annual Gross Revenue $289,847,320 NOTE: Commercial includes Schools and Military TXU GAS-DISTRIBUTION Schedule L-3 (D) (Sr SUMMARY PROOF OF REVENUE AT PROPOSED RATES Page 3 of 3 FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G.L.GOBLE Line Description Total Reference (a) (b) (c) (d) 1 INDUSTRIAL&TRANSPORTATION 2 3 Rate Characteristics; 4 Customer Charge $150.00 Schedule L-1 page 3 5 Block 1 $0.8068 Schedule L-1 page 3 6 Block 2 $0.6568 Schedule L-1 page 3 7 Block 3 $0.5068 Schedule L-1 page 3 8 Block 4 $0.3569 Schedule L-1 page 3 9 10 Gas Cost $3.1522 WP/L-1/13 11 Volume Factor $1.0266 WP/L-1/4 12 13 14 Consumption Characteristics; 15 Block 1 0.1450 16 Block 2 0.2094 17 Block 3 0.4196 Le 18 Block 4 0.2261 19 20 Industrial Sales Volume 2,915,130 Schedule J-1 21 Transportation Volume 58,725,772 Schedule J-1 22 Adjusted Industrial Volume-MCF 61,640,901 23 24 Industrial MCF by Block 25 Bills 15,828 Schedule J-1 26 Industrial Block 1 MCF 8,935,784 line 30 times line 15 27 Industrial Block 2 MCF 12,905,297 line 30 times line 16 28 Industrial Block 3 MCF 25,863,736 line 30 times line 17 29 Industrial Block 4 MCF 13,936,083 line 30 times line 18 30 Total Industrial MCF 61,640,901 Schedule J-1 31 32 33 Jndustrial Revenue 34 Industrial Customer Charge Revenue $2,374,200 WP/L-3/3(D) 35 Industrial Block 1 Base Rate Revenue $7,209,391 WP/L-3/3(D) 36 Industrial Block 2 Base Rate Revenue $8,476,199 WP/L-3/3(D) 37 Industrial Block 3 Base Rate Revenue $13,107,742 WP/L-3/3(D) 38 Industrial Block 4 Base Rate Revenue $4,973,788 WP/L-3/3(D) 39 Total Industrial Base Rate Revenue $36,141,320 40 41 GCA Revenue 9,433,401 WP/L-3/3(D) 42 Subtotal $45,574,720 (1)11w 43 Revenue Related Taxes $2,661,179 WP/L-3/3(D) 44 Total Adjusted Revenue $48,235,899 Page 1 of 3 TXU GAS—PIPELINE FOR THE TEST YEAR ENDED DECEMBER 31,2002 TABLE OF CONTENTS SECTION I: OVERALL COST OF SERVICE SUMMARY Schedule A: Cost of Service A(P): Cost of Service Summary A-1 (P): Overall Cost of Service SECTION II: HISTORIC TEST YEAR DATA Schedule B: Rate Base B(P): Total Rate Base B-1 (P): Net Plant Investment B-1.1 (P): Pipeline Plant Investment B-1.2(P): General Plant Investment Schedule C: Original Cost of Plant C-1 (P): Original Cost of Pipeline Utility Plant C-2(P): Original Cost of General Plant C-3(P): Total Construction Work in Progress C-3.1 (P): Construction Work in Progress-Pipeline Plant C-3.2(P): Construction Work in Progress-General Plant fhire Schedule D: Depreciation D-1 (P): Accumulated Depreciation of Pipeline Utility Plant D-2(P): Accumulated Depreciation of General Plant D-3(P): Retirement Work in Progress D-4(P): Comparison of Current and Proposed Pro Forma Depreciation Expense D-5(P): Depreciation Study Rate Summary Schedule E: Other Rate Base Items E(P): Summary of Other Rate Base Items E-1 (P): Materials&Supplies E-2(P): Prepayments E-3(P): Customer Deposits and Associated Interest Expense E-4(P): Construction Advances E-5(P): Provision for Injuries and Damages E-6(P): Safety Compliance Program Costs E-7(P): Income Tax Adjustments E-7.1 (P): Accumulated Deferred Federal Income Taxes E-7.2(P): Investment Tax Credit C Page 2 of 3 TXU GAS—PIPELINE L, FOR THE TEST YEAR ENDED DECEMBER 31,2002 TABLE OF CONTENTS • E-8(P): Cash Working Capital E-9(P): Line Pack Gas E-10(P): Cushion Gas in Storage Schedule F: Revenue Data F-1 (P): Operating Revenues Schedule G: Expense Data G-1 (P): Other Gas Supply Expense G-2(P): Operations and Maintenance Expenses G-3(P): Labor Expense G-3.1 (P): Labor Expense G-4(P): Non-Labor Expense G-4.1 (P): Non-Labor Expense G-5(P): Operation and Maintenance Expense Adjustment Summary G-5.1 (P): Advertising Expense Adjustment G-5.2(P): Contributions and Donations Expense Adjustment G-5.3(P): Social Club Dues Adjustment G-5.4(P): Legislative Advocacy Adjustment G-5.5(P): Miscellaneous Account Revisions Adjustment G-5.6(P): Insurance Premiums Adjustment G-5.7(P): Pension&Benefit Expense Adjustment G-5.8(P): Pipeline Integrity Program Adjustment G-5.9(P): WINS-TXU Business Services Cost Reduction Adjustment G-5.10(P): WINS-TXU Business Services Regulatory Asset Adjustment G-5.11 (P): WINS Related(Oncor)Cost Reduction Adjustment G-5.12(P): Regulatory Asset Amortization Adjustment G-5.13(P): Account Reclassifications/Adjustments G-5.14(P): Fuel,Loss and Other Gas Related Expenses Adjustment G-6(P): Taxes Other Than Income Taxes G-7(P): Test Year FIT and Requested FIT G-8(P): Excluded Operating Expenses Schedule H: Financial Statements H-1 (P): Operating Income Statement H-2(P): Trial Balance Schedule I: Return on Invested Capital I (P): Summary of Return C Page 3 of 3 (liaor TXU GAS—PIPELINE FOR THE TEST YEAR ENDED DECEMBER 31,2002 TABLE OF CONTENTS SECTION III: RATE DESIGN Schedule J: Key Operating Statistics J-1 (P): Summary of Adjustments for Customers and Volumes Schedule K: Class Cost of Service Analysis K-1 (P): Summary K-2(P): Allocation of Rate Base K-3 (P): Allocation of Revenues K-4 (P): Allocation of Expenses K-5(P): Data Summary K-6(P): Development of Allocation Factors Schedule L: Rate Design L-1 (P): Rate Design Calculation Note:Totals may vary due to rounding. L Schedule A(P) Page 1 of 1 (1119" TXU GAS—PIPELINE COST OF SERVICE SUMMARY FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G.L GOBLE AND R.K.PRUETT • Une Present Proposed Proposed Percent No. Description Rates Rates Increase Increase (a) (b) (c) (d) (e) 1 Operating Revenues 2 City Gate $ 69,037,282 $ 76,073,306 $ 7,036,025 10.19 3 Pipeline Transportation 25,556,087 25.556,087 4 5 Total Gas Transport Revenues $ 94,593,368 $ 101,629,393 $ 7,036.025 7.44 6 7 Other Operating Revenues 32,983,412 32,983,412 8 Total Operating Revenues $ 127,576.780 $ 134.612.805 $ 7.036.025 5.52 9 10 11 12 13 Total Revenue Requirement 14 15 Operation and Maintenance Expenses $ 72,813,539 16 17 Taxes Other than Income Taxes 7,392,607 18 19 Depreciation and Amortization Expense 15,775,985 20 21 Federal Income Taxes 9,669,716 22 (11111e 23 Return on Rate Base 28.960,959 24 25 Total Revenue Requirement $ 134,612.805 L �\ } (0 L }� 0) � � e U' 0 0 k /§# i F- §' 0) 6 c § w o a o — & cokn co co co § § n f ® m m ° m� ; ® vs 49 - - - To' WI le) 0) er — CD CC o ee # _ CO n co a _ CO 0 c in - e E § a 0 § 0 m k1 e ; o a C -I a. 2 < 2 1 - - - ® ® -I ( _ - -_ - E � 3/ % - CC o o § a0 @ m st � L g CD R 0) n CD CD 2 O) in - F- cos - T - U) 2 § CO & U) E 8 F- § � F-- co ® a _ � 49 � 0 - 49 - - - ® CCCC wk1. C. 2 k V COD co co k § C. , - C o) U) o n & n o §Ituj/ § £ § f CD \ Cr) CD R 0 CD CD �_�� � a Ti - L .° � � at � � CD§§jz 0 ® - ® - - - 2 <w .• § _ £ Et' £ xal )- d o _ cY � � w 0..al C U 000 a ono CC LU Z @ § CV@ CO m § § i qC% 0 o �B - CO k G § � R .- # $ 0 4. I '13 # # /# vs k ® § _ 49 _ _ 49 _ §. IS' © E O.� s e } C � 0 ) ° � 2 aga) m ) � 032E @ . m = oa 0o . ■ g .. f2 - \ K ; . % § 0 ■ e 0 ; ■ � . s > 2s■ co§ a). % co > k 1. , § ■ CO k § o re o c 0 o b\§ �� Z § k 2 k ) � 2 0 k - § f E 0 o 0 &3 R $ $— I ) L. = d• — � � � � � � „ � o — Nn � � � � � � ON � z Schedule B(P) (11000 Page 1 of 1 TXU GAS—PIPELINE TOTAL RATE BASE AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line No. Description Reference Amount per Books Adjustment Total Requested (a) (b) (c) (d) (e) 1 Net Plant in Service 2 Pipeline Plant in Service B-1 (P) $ 357,986,589 $ 357,986,589 3 General Plant 14,019,776 14,019,776 4 Net Gas Pipeline Plant in Service $ 372,006,365 $ - $ 372,006,365 5 6 Investment Additions: 7 Working Capital 8 Working Cash Allowance $ (3,224,772) $ (3,224,772) 9 Materials&Supplies 3,141,829 3,141,829 10 Prepayments E(P) 760,368 760,368 11 Line Pack 2,506,634 2,506,634 12 Cushion Gas in Storage 18,021,864 18,021,864 13 Total Investment Additions $ 21,205,924 $ - $ 21,205,924 14 15 Investment Deductions 16 Injuries and Damages Reserve E(P) $ 272,500 $ 272,500 17 Income Tax Adjustments 70,844,655 70,844,655 (hw 18 Total Investment Deductions $ 71,117,155 $ $ 71,117,155 19 20 Total Rate Base $ 322,095,134 $ - $ 322,095,134 L. Schedule B-1 (P) Page 1 of 1 TXU GAS—PIPELINE (Me NET PLANT INVESTMENT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON NARUC Adjusted Plant Accumulated Line No. Acct. Description Reference Balance Depreciation Net Book Value (a) (b) (c) (d) (e) (f) 1 Pipeline Plant in Service-Net Investment 2 Gathering Plant $ 15,226,299 $ 2,119.337 $ 13,106.962 3 Transmission Plant B-1.1 (P) 564,830,212 269,679,705 295,150,507 4 Natural Gas Storage 78,244,913 28.515.793 49.729.120 5 Total Pipeline Plant in Service $ 658,301,424 $ 300.314,835 $ 357.986.589 6 7 General Plant-Net Investment 8 389 Land $ 82,110 $ - $ 82,110 9 390 Structures&Improvements 3,126,161 1,217,009 1,909,152 10 391 Office Furniture&Equipment 9,332,891 7,444,510 1,888,381 11 392 Transportation Equipment 4,927,385 4,996,177 (68,792) 12 393 Stores Equipment 28,648 28,648 - 13 395 Laboratory Equipment B-1.2(P) 29,349 29,349 - 14 396 Power Oper.Tool&Work Equipment 4,542,147 2.982,998 1,559,149 15 397 Radio Communication Equipment 999,033 853,473 145,560 16 398 Miscellaneous Equipment 11,554,768 6,879,587 4,675,181 17 399 Non-Mainframe Computer Equipment 2,403,487 1,732,909 670,578 18 303 Computer Software 3,975,409 816,952 3,158,457 19 Total General Plant $ 41.001.388 $ 26,981,612 $ 14,019,776 20 21 Total Net Plant ( Line 5.Line 19 I$ 699,302,812 $ 327.296,447 $ 372,006.365 aT 0 (OW T T T a) CD p) t, 0) N (') N. to Cr) CO N N. 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Y 0) O CO CO O O) r r O) 1- '7 CO 0) Cr) N 0 r 0) CO CD CO Cr) N st I- 7 p CO . f` CA Cr) O CO N Cr) Cr) O) CO W O Z r r � f\ O N N CO') T N CO') Z2Nw J N .-Q EA EA EA 69 EA EA a > Q d C rn 4. — m a = d a coc k I(lipf cn z W r C C y U o a C7 a' W O cc a) E W1:1 co c) x O Z n ~ aicCCO v F. o c m U o) as c) O Q N C U O O C) a C) a) co it a a •2 c o U r N C •U N C (n N CCC N -2 C CT. c on._ C c CT IT a- 0 (n c d O as (!) c d O a c C d P. N c as Cl)Cd c as CCDd ctt co cu) .5 c a N as c c a Q CO C m a NCO a m '� toL. a Cu .CDw a a (1, wa.. m C .0 C = a• C - C = a s C Mz t ca5caio t) cP2c5 LL 115E765 o.0 F- Z o a 0 F- Z o c 0 f- Z o a. I- a I- z F- a z 0 r N Cr) CO CON. CD d r N M � LC) CO N. CO 0) C J C Schedule B-1.2(P) Page 1 of 1 TXU GAS—PIPELINE (1110w GENERAL PLANT INVESTMENT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON NARUC Line No. Acct. Description Reference Amount Per Books Adjustments As Adjusted (a) (b) (c) (d) (e) (f) 1 Plant in Service 2 General Plant-Cost 3 389 Land $ 82,110 $ - $ 82,110 4 390 Structures&Improvements 3,058,382 67,779 3,126.161 5 391 Office Furniture&Equipment 9.332,891 - 9,332.891 6 392 Transportation Equipment 5,027,071 (99.686) 4.927,385 7 393 Stores Equipment 28.648 - 28.648 8 395 Laboratory Equipment C-2(P) 29,349 - 29.349 9 396 Power Oper.Tool&Work Equipment 4,551,697 (9,550) 4,542,147 10 397 Radio Communication Equipment 999,033 - 999,033 11 398 Miscellaneous Equipment 11,421,103 133.665 11,554,768 12 398 Non-Mainframe Computer Equipment 2,403,487 - 2,403,487 13 303 Computer Software 3,975.409 - 3,975,409 14 Total $ 40.909.181 $ 92,208 $ 41,001,388 15 16 General Plant- Accumulated Depreciation 17 389 Land $ - $ - $ - 18 390 Structures&Improvements 1,217,009 - 1,217.009 19 391 Office Furniture&Equipment 7,444,510 - 7,444,510 20 392 Transportation Equipment 3.215,599 1,780,578 4,996,177 21 393 Stores Equipment 28,648 - 28,648 22 395 Laboratory Equipment D-2(P) 29,349 - 29,349 23 396 Power Oper.Tool&Work Equipment 2,911,028 71,970 2,982,998 24 397 Radio Communication Equipment 853,473 - 853,473 25 398 Miscellaneous Equipment 6,879,587 - 6,879,587 26 398 Non-Mainframe Computer Equipment 1,732,909 - 1,732,909 (be 27 303 Computer Software 816.952 816,952 28 Total $ 25,129.063 $ 1,852,547 $ 26,981,612 29 30 General Plant-Net Investment 31 389 Land $ 82,110 $ - $ 82,110 32 390 Structures&Improvements 1,841,373 67,779 1,909,152 33 391 Office Furniture&Equipment 1,888,381 - 1,888,381 34 392 Transportation Equipment 1,811,472 (1,880,264) (68,792) 35 393 Stores Equipment Lines 3-13 - - - 36 395 Laboratory Equipment minus Lines - - - 37 396 Power Oper.Tool&Work Equipment 17-27 1,640,670 (81,520) 1,559,149 38 397 Radio Communication Equipment 145,561 - 145,560 39 398 Miscellaneous Equipment 4,541,516 133,665 4,675,181 40 398 Non-Mainframe Computer Equipment 670,578 - 670,578 41 303 Computer Software 3,158,457 - 3,158,457 42 Total $ 15,780,118 $ (1,760,340) $ 14,019,776 L Schedule C-1 (P) Page 1 of 1 Le TXU GAS—PIPELINE ORIGINAL COST OF PIPELINE UTILITY PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line NARUC Adjustments No. Acct. Description Per Books (Note 1) As Adjusted (a) (b) (c) (d) (e) 1 Gathering&Transmission Plant 2 Gathering Plant 3 32501 Land-Gathering $ - $ - $ - 4 32502 Land Rights-Gathering 459,144 (68,958) 390,185 5 327 Field Compressor Structures 96,260 - 96,260 6 328 Field M&R Structures 59,623 - 59,623 7 329 Other Structures 34,541 - 34,541 8 332 Field Lines 9,301,098 (1,191,214) 8,109,884 9 333 Field Compressor Equipment 982,617 - 982,617 10 334 Field M&R Equipment 3,064,373 (423,572) 2,640,802 11 336 Purification Equipment 2,605,394 - 2,605,394 12 337 Other Equipment 392,289 (85,297) 306,993 13 Total Gathering Plant $ 16,995,340 $ (1,769,041) $ 15,226,299 14 15 Transmission Plant 16 36501 Land-Transmission $ 567,364 $ - $ 567,364 L. 17 36502 Land Rights-Transmission 12,755,420 (51,386) 12,704,034 18 366 M&R Station Structures 4,374,846 480 4,375,326 19 367 Mains 454,772,651 674,944 455,447,594 20 368 Compressor Station Equipment 35,559,494 - 35,559,494 21 369 M&R Station Equipment 52,543,313 (94,425) 52,448,888 22 371 Other Equipment 3,735,924 (8,413) 3,727,511 23 Total Transmission Plant $ 564,309,013 $ 521,199 $ 564,830,212 24 Total Gathering&Transmission Plant $ 581,304,352 $ (1,247,841) $ 580,056,511 25 26 Natural Gas Storage 27 35001 Land-Gas Storage $ 236,367 $ - $ 236,367 28 35002 Land Rights-Gas Storage 33,459 - 33,459 29 351 Structures&Improvements 8,703,682 - 8,703,682 30 352 Wells&Reservoirs 31,196,086 127,307 31,323,392 31 353 Lines 3,397,147 - 3,397,147 32 354 Compressor Equipment 20,430,429 353,380 20,783,809 33 355 M&R Station Equipment 3,321,055 - 3,321,055 34 356 Purification Equipment 9,371,706 - 9,371,706 35 357 Other Equipment 1,074,295 - 1,074,295 36 Total Natural Gas Storage Plant $ 77,764,226 $ 480,687 $ 78,244,913 37 38 39 Total Pipeline Plant in Service $ 659,068,578 $ (767,155) $ 658,301,424 s 40 41 Note 1: Adjustments to Pipeline Plant in Service include the following: 42 43 Projects In Construction Work in Progress at December 31,2002 which 44 were placed in service as of March 31,2003. C-3(P) $ 2,600,248.39 (16.. 45 46 Sales of Pipeline Plant in March and April,2003 WP/C-1/1 (P) $ (3,367,402.95) 47 48 Total Adjustments $ (767,154.56) (NW Schedule C-2(P) Page 1 of 1 TXU GAS—PIPELINE ORIGINAL COST OF GENERAL PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line NARUC Amount per Adjustments Adjusted No. Acct Description Books (Note 1) Balance (a) (b) (c) (d) (e) 1 General Plant 2 389 Land $ 82,110 $ - $ 82,110 3 390 Structures&Improvements 3,058,382 67,779 3,126,161 4 391 Office Furniture&Equipment 9,332,891 - 9,332,891 5 392 Transportation Equipment 5,027,071 (99,686) 4,927,385 6 393 Stores Equipment 28,648 - 28,648 7 395 Laboratory Equipment 29,349 - 29,349 8 396 Power Oper.Tool&Work Equip. 4,551,697 (9,550) 4,542,147 9 397 Radio Communication Equipment 999,033 - 999,033 10 398 Miscellaneous Equipment 11,421,103 133,665 11,554,768 11 398 Non-Mainframe Computer Equip. 2,403,487 - 2,403,487 12 303 Computer Software 3,975,409 - 3,975,409 13 Total General Plant $ 40,909,181 $ 92,208 $41,001,389 14 15 Note 1: Adjustments to the Cost of General Plant include the following: 16 17 Projects in Construction Work in Progress at December 31,2002 which 18 were placed in service as of March 31,2003 C-3(P) $ 92,207.81 L Schedule C-3 (P) Page 1 of 1 TXU GAS—PIPELINE (ow TOTAL CONSTRUCTION WORK IN PROGRESS(CWIP) AS OF DECEMBER 31,2002 SPONSOR: D. A.WATSON Line No. Description Total (a) (b) 1 Total Pipeline System CWIP per Books $ 15,834,875 2 3 Less: 4 Adjustment for Completed Construction - Pipeline Plant (Note 1) 2,600,248 5 Adjustment for Completed Construction -General Plant (Note 1) 92,208 6 Adjustment for Retirement Jobs not closed to Reserve (1,764,910) 7 Adjusted Total CWIP $ 14,907,329 8 9 Adjusted CWIP Included in Rate Base (0%) - 10 11 Note 1: See the workpapers for Schedule C-3 (P)for detail of 12 Completed Construction by Account C L. Schedule C-3.1 (P) Page 1 of 1 (Ilise TXU GAS—PIPELINE CONSTRUCTION WORK IN PROGRESS-PIPELINE PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line NARUC Workpaper No. Acct. Description Reference Amount (a) (b) (c) (d) 1 Gathering Plant 2 32501 Land-Gathering $ - 3 32502 Land Rights-Gathering - 4 327 Field Compressor Structures - 5 328 Field M&R Structures - 6 329 Other Structures - 7 332 Field Lines 15,869 8 333 Field Compressor Equipment - 9 334 Field M&R Equipment - 10 336 Purification Equipment - 11 337 Other Equipment - 12 $ 15,869 13 Transmission Plant-City Gate(Customer Sales) 14 365 Land Rights $ - 15 366 M&R Station Structures - 16 367 Mains - 17 369 M&R Station Equipment - 18 371 Other Equipment L.- 19 $ 20 Transmission-Compressors(Compressor Stations) 21 36501 Land $ - 22 36502 Land Rights - 23 366 M&R Station Structures - 24 368 Compressor Station Equipment - 25 $ - 26 Transmission 27 36501 Land $ - 28 36502 Land Rights - 29 366 M&R Station Structures 4,585 30 367 Mains W P/C-3.1/1 P 1,728,177 31 369 M&R Station Equipment 366,346 32 371 Other Equipment 4,585 33 $ 2,103,692 34 Underground Storage 35 35001 Land $ - 36 35002 Land Rights - 37 351 Structures&Improvements - 38 352 Wells&Reservoirs 127,307 39 353 Lines - 40 354 Compressor Equipment 353,380 41 355 M&R Station Equipment - 42 356 Purification Equipment - 43 357 Other Equipment - 44 367 Mains - 45 368 Compressor Station Equipment - C., 46 $ 480,687 47 Total $ 2,600,248 48 Schedule C-3.2 (P) Page 1 of 1 TXU GAS—PIPELINE CONSTRUCTION WORK IN PROGRESS-GENERAL PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON NARUC Line No. Account Description Reference Amount (a) (b) (c) (d) 1 Costs of Construction as of December 31, 2002 Completed 2 Prior to April 1,2003 3 389 Land $ - 4 390 Structures&Improvements 67,779 5 391 Office Furniture&Equipment - 6 392 Transportation Equipment (99,686) 7 393 Stores Equipment - 8 395 Laboratory Equipment - 9 396 Power Oper.Tool&Work Equip. (9,550) 10 397 Radio Communication Equipment - 11 398 Miscellaneous Equipment 133,665 12 398 Non-Mainframe Computer Equip. - 13 303 Computer Software - 14 $ 92,208 15 16 Costs of Construction as of December 31, 2002 not Completed 17 Prior to April 1, 2003 18 389 Land $ - 19 390 Structures& Improvements - 20 391 Office Furniture& Equipment - 21 392 Transportation Equipment - 22 393 Stores Equipment - 23 395 Laboratory Equipment - 24 396 Power Oper.Tool &Work Equip. - 25 397 Radio Communication Equipment - 26 398 Miscellaneous Equipment - 27 398 Non-Mainframe Computer Equip. - 28 303 Computer Software - 29 $ - 30 Total General Plant Work in Progress $ 92,208 L Schedule D-1 (P) Page 1 of 1 TXU GAS—PIPELINE L. ACCUMULATED DEPRECIATION OF PIPELINE UTILITY PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line NARUC Adjustments No. Acct. Description Per Books (Note 1) As Adjusted (a) (b) (c) (d) (e) 1 Gathering&Transmission Plant 2 Gathering Plant 3 32501 Land-Gathering $ - $ - $ - 4 32502 Land Rights-Gathering 88,070 (31,497) 56,573 5 327 Field Compressor Structures 19,601 (3,859) 15,742 6 328 Field M&R Structures 7,810 (1,740) 6,070 7 329 Other Structures 6,195 (2,238) 3,957 8 332 Field Lines 1,695,128 (678,611) 1,016,518 9 333 Field Compressor Equipment 182,586 (35,948) 146,638 10 334 Field M&R Equipment 567,883 (198,426) 369,457 11 336 Purification Equipment 475,078 (6,683) 468,395 12 337 Other Equipment 61,793 (25,805) 35,989 13 Total Gathering Plant $ 3,104,144 $ (984,806) $ 2,119,337 14 15 Transmission Plant 16 36501 Land-Transmission $ 24,559 $ - $ 24,559 17 36502 Land Rights-Transmission 6,888,435 331,365 7,219,800 18 366 M&R Station Structures 2,137,931 (10,915) 2,127,016 L, 19 367 Mains 224,328,099 (1,464,917) 222,863,182 20 368 Compressor Station Equipment 12,426,914 12,426,914 21 369 M&R Station Equipment 22,750,797 (214,644) 22,536,153 22 371 Other Equipment 2,435,340 46,741 2,482,081 23 Total Transmission Plant $ 270,992,074 $ (1,312,369) $ 269,679,705 24 Total Gathering&Transmission Plant $ 274,096,218 $ (2,297,176) $ 271,799,042 25 26 Natural Gas Storage 27 35001 Land-Gas Storage $ - $ - $ - 28 35002 Land Rights-Gas Storage 13,826 - 13,826 29 351 Structures&Improvements 3,299,526 - 3,299,526 30 352 Wells&Reservoirs 10,711,065 - 10,711,065 31 353 Lines 1,299,214 - 1,299,214 32 354 Compressor Equipment 7,700,213 - 7,700,213 33 355 M&R Station Equipment 880,770 - 880,770 34 356 Purification Equipment 4,190,379 - 4,190,379 35 357 Other Equipment 420,800 - 420,800 36 Total Natural Gas Storage Plant $ 28,515,793 $ - $ 28,515,793 37 --_ -38 39 Total Pipeline Plant in Service $ 302,612,011 $ (2,297,176) $ 300,314,835 40 41 Note 1: Adjustments to Pipeline Plant in Service Accumulated Depreciation include the following: 42 43 Sales of Pipeline Plant in March and April,2003 WP/D-1/1 (P) $ (2,297,176) L Schedule D-2(P) Page 1 of 1 (111W TXU GAS—PIPELINE ACCUMULATED DEPRECIATION OF GENERAL PLANT AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line NARUC Adjustments No. Acct. Description Per Books (Note 1) As Adjusted (a) (b) (c) (d) (e) 1 General Plant 2 389 Land $ - $ - $ - 3 390 Structures&Improvements 1,217,009 1,217,009 4 391 Office Furniture&Equipment 7,444,510 7,444,510 5 392 Transportation Equipment 3,215,599 1,780,578 4,996,177 6 393 Stores Equipment 28,648 28,648 7 395 Laboratory Equipment 29,349 29,349 8 396 Power Oper.Tool&Work Equip. 2,911,028 71,970 2,982,998 9 397 Radio Communication Equipment 853,473 853,473 10 398 Miscellaneous Equipment 6,879,587 6,879,587 11 398 Non-Mainframe Computer Equip. 1,732,909 1,732,909 12 303 Computer Software 816,952 816,952 13 Total General Plant $ 25.129,063 $ 1,852,547 $ 26,981,610 14 15 16 Note 1: Adjustments to Accumulated Depreciation include the following. Please see 17 the related work paper for detail related to the adjustment. 18 19 Adjustment for RWIP not cleared from CWIP WP/D-2/1 (P) $ 1,852,547 L. (be Schedule D-3 (P) Page 1 of 1 TXU GAS—PIPELINE RETIREMENT WORK IN PROGRESS AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Line No. Description (a) 1 There is no separately booked Retirement Work in Progress 2 in the General Ledger. Retirement Work in Progress is 3 recorded in Construction Work in Progress and is adjusted 4 to Accumulated Depreciation when the related project 5 closes. C C EL:I- -Q d 0 CO . O ON) . CO N CCO VI Cr) A 0)) L d acn r N N � CO a) a C) o d9 69 d9 EA CO wn as � Q) r Cr) CO CO r 0 _ as r- ' u) CA O ' O LC) Cr) LCr R CA CO. Lf) O c‘i r v r Lo co co r LA CD W = r N N- r CO r Ln Cl) i r r a V Ffl E9 CA 69 w 0 r N N- N- O CO CO LO W Z d ct ' 0) OD ' ' ' N CON^ GO)^ Cr) LA CO O_ 0cri F— 0. WP N N. 0 r LO NNN- O Q r LC) V N a r r W 0 Ef3 EA w 69 CL CCN W r *6 cio Den a) da da cc, co uj Q• mZ a v � cl � t + 020 wv , O el ILI = w CI) �a d O CD a - aa � J aou° d N z G E (ilie as e a ¢ c¢ a O ¢ Q co c a W Z ~ zf- a a < W N Z W = a a) a W = a �QQ Q cc F- X C . W CC i � w N ' cEE NnCC v • w co c w a) ) o E5E oE °•w G C.) a> Q , gE ° n O cocw � EUQ xusZ a a) .OS wCTCa—0 w U m O C n E E°) 5oc o o co •c a) QH zco) E Q 0 ' o- . aw � CO Lo�cti56E8 - cA 4 -0 al o jcn. a °' LL wO C ct a a a � ` � — a) O cEa 'o2ccKgoa .° °' te°a 0 ✓ aU ( ° aioo° �' c - v c o o a) � c7OH ) � aCCZZU ° n. C7 H c.) V • 0) O r- N Cr) ill CO N- Co Co Cr) cc :3 CO 0) 0) 0) C) C) CA 0) 0) CA 0 Z < C9 C7 C9 CO C7 Cr) Cr) Cr) Cr) Cr) OD IZ rNM � LnCD1, CD0 O r N CO Tr Ln CD f.- CO CA N J C C Schedule D-5 (P) Page 1 of 1 TXU GAS-PIPELINE DEPRECIATION STUDY RATE SUMMARY WITH ANALYSIS OF DATA THROUGH DECEMBER 31,2002 SPONSOR: D.A.WATSON Study Date Line NARUC No. Acct. Description Reference 12/99 12/02 (a) (b) (c) (d) (e) 1 Pipeline Plant Depreciation Rates Current Proposed 2 Gathering Plant 10.66% 15.23% 3 Underground Storage 2.41% 2.31% 4 Transmission Note 1 1.61% 1.59% 5 Transmission Customer(Note 2) 12.86% 1.59% 6 Transmission Compressors 7.34% 4.80% 7 tor 9 10 General Plant Depreciation Rate 11 389 Land 0.00% 0.00% 12 390 Structures & Improvements 1.84% 2.45% 13 391 Office Furniture & Equipment 1.50% 1.83% 14 392 Transportation Equipment 0.00% 0.00% 15 393 Stores Equipment 0.00% 0.00% 16 394 Tools, Shop, and Garage Equipment Note 1 0.00% 0.00% 17 395 Laboratory Equipment 0.00% 0.00% 18 396 Power Oper.Tool &Work Equip. 0.00% 0.00% 19 397 Radio Communication Equipment 0.00% 1.33% 20 398 Miscellaneous Equipment 2.06% 2.24% 21 398 Non-Mainframe Computer Equip. 0.00% 10.90% 22 303 Computer Software WP/D-4/3 (P) 17.99% 17.99% 23 24 Note 1: Please see the testimony of D. A. Watson 25 for the complete study in which these rates were computed. 26 27 Note 2: The remaining investment in Transmission -Customer related 28 facilities ($49,894)was combined with Transmission and used in computing the 29 depreciation rate for Transmission. C Schedule E (P) Cie Page 1 of 1 TXU GAS—PIPELINE SUMMARY OF OTHER RATE BASE ITEMS AS OF DECEMBER 31,2002 SPONSORS: B. D. GRIFFIN, R. K. PRUETT,A. L.WARREN, D.A.WATSON Line No. Description Reference Amount (a) (b) (c) 1 Current Assets (13 month average) 2 Materials & Supplies E-1 (P) $ 3,141,829 3 Prepayments E-2 (P) 760,368 4 Line Pack E-9 (P) 2,506,634 5 Cushion Gas in Storage E-10(P) 18,021,864 6 7 Current Liabilities (Year-end Balance) 8 Customer Deposits and Associated Interest Expense E-3(P) N/A 9 Construction Advances E-4(P) N/A 10 Provision for Injuries and Damages E-5 (P) $ 272,500 11 Income Tax Adjustments E-7 (P) 70,844,655 12 13 Plant Adjustments 14 Safety Compliance Program Costs E-6 (P) N/A 15 16 Cash Working Capital E-8 (P) $ (3,224,772) C Schedule E-1 (P) (Ihr• Page 1 of 1 TXU GAS—PIPELINE MATERIALS&SUPPLIES FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: D.A.WATSON Stores Materials & Expense Line Account Balance Supplies Undistributed Total Materials No. As of Date (Acct. 154) (Acct. 163) & Supplies (a) (b) (c) (d) 1 January 1, 2002 $ 2,689,897 $ 55,600 $ 2,745,497 2 January 31, 2002 3,020,313 87,222 3,107,535 3 February 28, 2002 3,323,052 116,959 3,440,011 4 March 31, 2002 3,192,148 108,924 3,301,072 5 April 30, 2002 3,210,686 85,790 3,296,475 6 May 31, 2002 2,924,465 79,629 3,004,094 7 June 30, 2002 2,945,571 80,318 3,025,889 8 July 31, 2002 3,016,202 76,914 3,093,116 9 August 31, 2002 3,048,738 80,626 3,129,364 10 September 30, 2002 3,057,530 80,442 3,137,971 (11, 11 October 31, 2002 3,097,424 83,850 3,181,274 12 November 30, 2002 3,116,414 76,539 3,192,953 13 December 31, 2002 3,105,591 82,937 3,188,528 14 Totals $ 39,748,030 $ 1,095,749 $ 40,843,779 15 16 13 Month Average $ 3,057,541 $ 84,288 $ 3,141,829 L Schedule E-2 (P) Page 1 of 1 (OW TXU GAS-PIPELINE PREPAYMENTS FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Account Balance Insurance Other Prepayments Total No. As of Date (Acct. 165.2100) (Acct. 165.9000) Prepayments (a) (b) (c) (d) 1 January 1, 2002 $ 203,633 $ 40,244 $ 243,877 2 January 31, 2002 184,360 575,694 760,055 3 February 28,2002 557,011 546,601 1,103,612 4 March 31, 2002 469,537 484,329 953,867 5 April 30,2002 432,322 422,058 854,380 6 May 31,2002 789,218 359,787 1,149,005 7 June 30,2002 837,264 297,516 1,134,780 8 July 31, 2002 776,340 235,244 1,011,584 9 August 31, 2002 673,339 172,973 846,312 10 September 30,2002 570,435 110,702 681,137 11 October 31,2002 399,205 82,266 481,471 12 November 30, 2002 323,717 55,181 378,898 (1.1., 13 December 31, 2002 257,714 28,096 285,810 14 Total $ 6,474,094 $ 3,410,692 $ 9,884,786 15 16 13 Month Average $ 498,007 $ 262,361 $ 760,368 L L Schedule E-3 (P) Page 1 of 1 TXU GAS—PIPELINE CUSTOMER DEPOSITS AND ASSOCIATED INTEREST EXPENSE AS OF DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Description Amount (a) (b) 1 2 This schedule is not used by TXU Gas- Pipeline. (iv Schedule E-4 (P) (kw Page 1 of 1 TXU GAS—PIPELINE CONSTRUCTION ADVANCES AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Annual Line Initial Principal Remaining Interest No. Balance Refunded Balance Expense (a) (b) (c) (d) 1 2 This schedule is not used by TXU Gas - Pipeline. 3 L L Schedule E-5 (P) Page 1 of 1 L TXU GAS—PIPELINE PROVISION FOR INJURIES AND DAMAGES AS OF DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Account Balance No. NARUC Account As of Date: Amount (a) (b) (c) 1 262- Injuries and Damages Reserve December 31, 2002 $ 272,500 L L Schedule E-6(P) Page 1 of 1 TXU GAS—PIPELINE SAFETY COMPLIANCE PROGRAM COSTS AS OF DECEMBER 31,2002 SPONSOR: D.A.WATSON Known and Measurable Charged to Changes to Amortization Line Reg Asset as Reg Asset as of Total Reg No. Description Reference of 12/31/2002 Value 12/312002 Asset Value (a) (b) (c) (d) (e) (f) 1 2 This schedule is not used by TXU Gas-Pipeline. 3 4 L L Schedule E-7 (P) (tror Page 1 of 1 TXU GAS—PIPELINE INCOME TAX ADJUSTMENTS AS OF DECEMBER 31,2002 SPONSOR: B. D. GRIFFIN Line No. Item Reference Amount (a) (b) (c) 1 Income Tax Adjustments 2 Accumulated Deferred Federal Income Tax E-7.1 (P) $ 62,909,895 3 Unrestored Investment Tax Credits E-7.2 (P) 7,934,761 4 Total Income Tax Adjustments $ 70,844,655 L L a `o P.m r (1111, V a, O)- O O N 6 M OD f C,CO O)OD F v NMDh- OD ' CON NO N N Ng N OD -^CD 4-CD 03O7 O n N N O) B N•- 1D ^ ' • OIDN N n ' N In O ODODnf7TOO)n- • N • N ' m anti Q h T N n f� O N h n • N fD- N('I fC vi p O O A pf p f7 f , f{D N v R N Q m M N,-`m m n 0 O N f7 O 7 l'f O l0 l7 -W N O (7 m N f7 Of L O N n - O N < O 40 N 69 OA OA N O) OJ O RO p) . . . . O) O C m m m - 7 M OR OA OA N M N N CD O- m O O N N O(pp f O O CO O VI N U) n O N CO Q 8 )D CO n f7 N O N f ID P.CO O CO O l7 N P N N V.N n • ONN r ' Nto O -OD CO.OO NO N- • N ' N W CO O) n Oi N n O7 O N n O: O w N O7 OG N p O g ^ O i a DJ et V. f �l'1 N `O['f f�O83i N N C O) N O - CY OSN e 1 L CD ► `. 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N. $ t, § . 3 £ N o co co CD C9 \ m ' 7 ■ 2 > _ _ _ _ _ _ 69 § / X 8 ■ t w § c ; _ 03 e © § 4 o c x § \ } c / c © 2 _ Q e ` / ` 0 E § C2 c 2 E C 2 2 02 2 tu i T =0 6 $ E f 0 7 k ° ° 2 2 . e -6 3 L 0 I / 3 CC / < / o 3 � � - 0, co4L0 � � « a - n _ � 0 •- oNCDN- CO0 Schedule E-9 (P) (Ilipe Page 1 of 1 TXU GAS—PIPELINE LINE PACK GAS FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: D.A.WATSON Line Account Balance Line Pack Gas No. As of Date (Acct. 186.4400) (a) (b) 1 January 1, 2002 $ 2,391,239 2 January 31, 2002 2,438,081 3 February 28, 2002 2,944,024 4 March 31, 2002 2,178,344 5 April 30, 2002 2,419,425 6 May 31, 2002 2,695,691 7 June 30, 2002 2,783,408 8 July31, 2002 2,183,334 9 August 31, 2002 2,177,502 10 September 30, 2002 2,424,548 11 October 31, 2002 2,170,392 12 November 30, 2002 3,005,962 13 December 31, 2002 2,774,296 (No 14 Total $ 32,586,246 15 16 13 Month Average $ 2,506,634 L Schedule E-10 (P) (lior Page 1 of 1 TXU GAS—PIPELINE CUSHION GAS IN STORAGE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: D. A.WATSON Line Account Balance As of Cushion Gas in Storage No. Date (Acct. 117.3000) (a) (b) 1 January 1, 2002 $ 18,030,722 2 January 31, 2002 18,030,722 3 February28, 2002 18,181,531 4 March 31, 2002 18,181,531 5 April 30, 2002 18,181,531 6 May 31, 2002 18,181,531 7 June 30, 2002 18,181,531 8 July 31, 2002 18,181,531 9 August 31, 2002 18,181,531 10 September 30, 2002 18,181,531 11 October 31,2002 18,181,531 12 November 30, 2002 17,892,283 13 December 31, 2002 16,696,722 (Iirf 14 Totals $ 234,284,230 15 16 13 Month Average $ 18,021,864 L Schedule F-1(P) Page 1 of 1 L TXU GAS—PIPELINE OPERATING REVENUES FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC No. Acct Description Total Adjustments(1) As Adjusted (a) (b) (c) (d) (e) 1 Operatina Revenue Accounts 2 Sales of Gas 3 489 Revenues from Transportation of Gas of Others-City Gate $ 74,988,361.16 $ - $ 74,988,361.16 4 489 Revenues from Transportation of Gas of Others-Electnc Generation 26.078.534.77 - 26,078,534.77 5 489 Revenues from Transportation of Gas of Others-Other 22,487,905.00 - 22,487,905.00 6 491 Revenues from Natural Gas Processed by Others 108,786.00 - 108,786.00 7 492 Incidental Gasoline and Oil Sales 345,003.65 - 345,003.65 8 493 Rent from Gas Property 210,022.41 - 210,022.41 9 495 Other Gas Revenues 4,327,611.79 - 4,327,611.79 10 Total Revenues $ 128,546,224.78 $ - $ 128,546,224.78 11 12 Revenues for the Cost of Service Filing 13 Restated by Class of Service(Schedule A(P1l 14 15 489 Revenues from Transportation of Gas of Others-City Gate $ 74,988,361.16 $ (5.951.079.64) $ 69,037,281.52 16 Total City Gate $ 74,988,361.16 $ (5,951,079.64) $ 69,037,281.52 17 18 489 Revenues from Transportation of Gas of Others $ 26,078,534.77 $ (522.448.27) $ 25,556,086.50 19 Total Pipeline Transportation $ 26,078,534.77 $ (522,448.27) $ 25,556,086.50 20 21 489 Revenues from Transportation of Gas of Others-Other $ 22,487,905.00 $ 6,527,792.04 $ 29,015,697.04 22 491 Revenues from Natural Gas Processed by Others 108,786.00 - 108,786.00 23 492 Incidental Gasoline and Oil Sales 345,003.65 - 345,003.65 24 493 Rent from Gas Property 210,022.41 - 210.022.41 25 495 Other Gas Revenues 4,327,611.79 (1,023,708.57) 3.303.903.22 26 Total Other $ 27,479,328.85 $ 5,504,083.47 $ 32,983,412.32 L 27 28 Total Revenues by Class of Service $ 128,546,224.78 $ (969,444.44) $ 127,576,780.34 29 30 Notes: 31 1. All adjustments in Col.(d)are per WP/L-1/1(P),except Lines 15,21,and 25,which are from WP/F-1(P)and WP/L-1/1(P). L n T I T (11111.' 0 a) a) C) U d r N .a G% fA O N " C d CC7 `o, Z coH '� c CLUi J W W = ccd a aa • uOiY c� Z ¢ X QNGCO .-.ct >• = cD w Z I- "0 X ¢ } p a) I CI) Cl) 0 H c W ,m = a) ~ O Q a) U. V CO 0 L H U Q Q 0 Z d C c TNCf) v• u) CO Z L Schedule G-2(P) Page I of 1 TXU GAS—PIPEUNE OPERATION AND MAINTENANCE EXPENSES FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Labor Nor-Labor No. Acct Description Total Adjustments Adjustments As Adjusted (a) Its) (c) (0) (e) (I) 1 Natural Gas Production and fiatierno-Operation 2 750 Operation Supervision and Engineering $ 32.304.02 $ - $ - $ 32.304.02 3 752 Gas Weds Expenses 302.68 - - 302.68 4 753 Field L.ne Expenses 166,104.05 - - 166.104.05 5 754 Field Compressor Station Expenses 2,578.04 - - 2.578.04 6 756 Field Measuring and Regulating Station Expenses 127,230.15 - - 127230.15 7 757 Purification Expenses 43.362.51 - (41.660.02) 1.702.49 8 Total Natural Gas Production and Gathering•Operation Expenses $ 371,881.45 S - S (41,660.02) $ 330.221.43 9 10 Natural Gas Production and Gathering-Maintenance 11 764 Maintenance of Field Lnes $ 26,120.26 S - S $ 26.12026 12 765 Maintenance of Field Compressor Station Equipment 31,915.82 - - 31,915.82 13 766 Maintenance of Field Measuring and Regulating Station Equipment 17.114.86 - - 17.114.86 14 767 Maintenance of Purification Equipment 530.91 - - 530.91 15 Total Natural Gas Production and Gather rig-Maintenance Expenses S 75,681.85 $ • $ - S 75.681.85 16 17 Other Gaa SuocN Excemes 18 801 Natural Gas Feld Lie Purchases $ 149.54 $ - $ (149.54) $ - 19 802 Natural Gas Gasoline Plant Outlet Purchases 8.53 - (8.53) - 20 805 Other Gas Purchases (4.978.791.90) - 4,978,791.90 21 806 Exchange Gas 2,896,040.38 - (2,896.040.38) - 22 808 Gas Withdrawn from Storage-Debit 550.00 - (550.00) 23 809 Gas Delivered to Storage-Credit (263.902.10) - 263.902.10 - 24 813 Other Gas Supply Expenses (375.44) - 375.44 - 25 Total Other Gas Supply Expenses $ (2,346,320.99) S - $ 2,346,320.99 $ • 26 27 Underground Stories Expenses-Operation 28 814 Operation Supervision and Engineering $ 243.707.50 $ $ - $ 243.707.50 29 816 Wells Expenses 104,479.64 - 104,479.64 30 817 Lines Expenses 144.30 - -0,4 10.444.30 31 818 Compressor Station Expenses 1,931,500.32 - (26.46) 1,931,473.86 32 819 Compressor Station Fuel and Power 1.103.52128 - (1,103,52128) - 33 820 Measurng and Regulating Station Expenses 130.432.73 • 130.432.73 34 821 Purification Expenses 116,830.71 - (70.96226) 45,868.45 35 823 Gas Losses 105,716.68 - (105,716.68)36 824 Other Expenses 8,448.89 - (2,538.87) 5,910.02 37 825 Storage Wells Royalties 445.942.37 - (143.32) 445,799.05 38 826 Rents 13,113.7 13.113.31 (ow 39 Total Underground Storage Expenses-Operates $ 4214,137.3 S S (1282,906.87) S 2.931228.86 40 41 Underground Storage Expenses-Maintenance 42 831 Maintenance of Strictures and Improvements $ 14,136.72 $ - $ - $ 14,136.72 43 632 Maintenance of Reservoirs and Wells 109,748.88 - 109.748.88 44 833 Maintenance of Lines 58,506.93 - - 58.506.93 45 834 Maintenance of Compressor Station Equipment 862,580.77 - - 862,580.77 46 835 Maintenance of Measuring and Regulating Station Equipment 51,906.26 - 51,90626 47 836 Maintenance of Pu rfdcation Equipment nt 100,560.93 - - 100,560.93 48 837 Maintenance of Other Equipment 14.720.90 - - 14,720.90 49 Total Underground Storage Expenses-Maintenance S 1212.161.39 $ • $ - $ 1,212,161.39 50 51 Transmission Expenses-Operation 52 850 Operation Supervision and Engineering $ 2.296.992.98 $ • $ (349.00) $ 2296.643.90 53 851 System Control and Load Dispatching 3,073231.39 - 3.073.231.39 • 54 852 Communications System Expenses 1,461,406.80 - 1,461,406.80 55 853 Compressor Station Labor and Expenses 737254.62 - - 737254.62 56 854 Gas for Compressor Station Fuel 4,662,330.38 (4,660.806.38) 1,524.00 57 856 Mans Expenses 16,687,183.01 - 2,490,889.13 19,178,072.14 58 857 Measur anses g and Regulating Station Examen 6,366,314.02 - (233.00) 0366.081.02 59 858 Transmission and Compression of Gas by Others (288270.38) 640,12827 351,857.89 60 859 Other Expenses 1,620,803.11 1,620,803.11 61 860 Rents 92.733.26 (850.00) 91,88328 62 Total Transmission Expenses-Operation $ 36.709.979.19 S • S (1,531220.98) $ 35,178,75821 63 64 Transmission Expense,-Maintenance 65 861 Maintenance Supervision and Engineering S 5.485.00 $ - $ $ 5.485.00 66 862 Maintenance of Structures and Improvements 48.425.86 - 48.425.86 67 863 MaIntence of Mains 1,007,428.71 - ns842.64 1,038271.35 68 864 Maintenance of Compressor Station Equipment 283,386.41 - - 283,386.41 69 865 Maintenance of Measuring and Regulating Station Equipment 630,076.43 - 2729 830,103.72 70 866 MaM el enarce of Conaalcation Equipment 119,720.96 - - 119,720.96 71 867 Maintenance of Other Equipment 99,701.38 - - 99,701.38 72 Total Transmission Expenses-Maintenance S 2,194224.75 $ - $ 869.93 S 2,195,094.68 73 74 Customer Accounts Expenses 75 903 Customer Records end Collection Expenses $ 169.958.78 $ - S - $ 169,958.78 76 904 Uncadactlble Accounts 523.896.56 - - 523,896.56 77 Total Customer Accounts Expenses $ 693,855.34 $ - S - $ 893.855.34 78 79 Administrative and General Expenses 80 920 Administrative and General Salaries S 1,170,399.08 $ 777,964.37 $ - $ 1,948,383.45 81 921 Office Supplies and Expenses 609.098.34 - (17.375.90) 591,722.44 82 923 Outside Services Employed 23,890,779.27 (878.663.54) (6,185.63320) 16,826,482.53 83 924 Property lnhsnrarnce 416,427.40 64,052.71 480,480.11 84 925 Injuries and Damages 811,409.73 104,890.39 916.300.12 De 85 926 Employee Pensions and Benefits 1.615.246.12 6.368.39522 7,ti63.641 31 86 928 Regulatory ConrrnlesiorhExpenses 1,022,858.57 (1,022,858.57) 87 9302 Miscellaneous General Expense 443.554.65 - 659,123.97 1,102,678.62 88 931 Rents 346.708.15 - - 348,708.15 89 932 Maintenance of General Plant 140.22 - 14022 90 Total Administrative and General Expenses $ 30.326.621.53 $ (100,679.17) $ (29.405.38) $ 30,190536.98 91 92 Total Operation and Maintenance Expenses $ 73.452.222.24 S (100.679.17) $ (538,004.33) $ 72,813,538.74 Schedule G-3(P) Page 1 Of 1 TXU GAS—PIPELINE (iir, LABOR EXPENSE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Labor No. ACCt Description Tool Adjustments As Adjusted la) (b) Ic) (d) le) 1 Natural Gas Production and Gathering-Operation 2 750 Operation Supervision and Engineering $ 27,465.87 S - $ 27.465.87 3 752 Gas Welts Expenses 268.63 - 268.63 4 753 Field Lane Expenses 87,011.17 - 87.011.17 5 754 Field Compressor Station Expenses 2,185.66 - 2.185.66 6 756 Field Measuring and Regulating Station Expenses 105,434.04 - 105.434.04 7 757 Purification Expenses 367.90 - 367.90 8 Total Natural Gas Production and Gathering-Operation Expenses S 222.733.27 $ - $ 222.73327 9 10 Natural Gas Production and Gatherina-Maintenance 11 764 Maintenance o1 Field Lines $ 8209.97 $ - S 8209.97 12 765 Maintenance of Field Compressor Station Equipment 2258.94 2258.94 13 766 Maintenance of Fed Measuring and Regulating Station Equipment 11,018.25 - 11.01825 14 767 Maintenance of Purification Equipment 476.93 • 476.93 15 Total Natural Gas Production and Gathering-Maintenance Expenses $ 21,964.09 S • $ 21.964.09 16 17 Other Gas Supply Expenses 18 801 Natural Gas Field Line Purchases $ - $ - $ - 19 802 Natural Gas Gasoline Plant Outlet Purchases - - - 20 805 Other Gas Purchases - - - 21 806 Exchange Gas - - - 22 808 Gas Withdrawn from Storage-Debit - - - 23 809 Gas Delivered to Storage-Credit - • - 24 813 Other Gas Supply Expenses - - - 25 Total Other Gas Supply Expenses S - S • $ - 26 27 Underground Storage Expenses-Operation 28 814 Operation Supervision and Engineenng $ 208.687.94 $ - $ 206.587.94 29 816 Wets Expenses 66,769.66 • 66.769.66 30 817 Lines Expenses 9,440.63 - 9.440.63 31 818 Compressor Station Expenses 1,098,051.80 - 1,098,051.80 32 819 Compressor Station Fuel and Power - - - 33 820 Measuring and Regulating Station Expenses 100,971.15 - 100,971.15 34 821 Purification Expenses . 32.604.31 - 32.604.31 35 823 Gas Losses - - 36 824 Other Expenses • . - 37 825 Storage Wells Royalties - - • (1.we 38 826 Rents - - 39 Total Underground Storage Expenses•Operation $ 1,516,425 S S 1,516,425.49 40 41 Underground Storage Expenses-Maintenance 42 831 Maintenance of Structures and Improvements $ 118.64 S - $ 118.84 43 832 Maintenance of Reservoirs and Wells 36.466.93 38.466.93 44 833 Maintenance of Lines 3,661.56 • 3,661.56 45 834 Maintenance of Compressor Station Equipment 194,062.48 194,062.48 46 835 Maintenance of Measuring and Regulating Station Equipment 36,968.19 - 36,968.19 47 836 Maintenance of Purification Equipment 32,768.35 - 32,768.35 48 837 Maintenance of Other Equipment 10.556.95 - 10.556.95 49 Total Underground Storage Expenses-Maintenance $ 314,603.10 $ - $ 314.603.10 50 51 Transmission Expenses-Operation 52 850 Operation Supervision and Engineering $ 1,560,534.97 $ - $ 1,560,534.97 53 851 System Control and Load Dispatching 1.644.121.50 - 1,644,121.50 54 852 Communications System Expenses 526.430.13 - 528,430.13 55 853 Compressor Station Labor and Expenses 266,040.09 - 266,040.09 56 854 Gas for Compressor Station Fuel - - - 57 856 Mains Expenses 5,799,037.79 - 5,799,037.79 58 857 Measuring and Regulating Station Expenses 3,042,614.98 • 3,042,614.98 59 858 Transmission and Compression of Gas by Others - - 80 859 Other Expenses 11,587.71 11,587.71 61 860 Rents - - - 82 Total Transmission Expenses-Operation $ 12.850.367.17 $ - $ 12.850.367.17 63 64 Transmission Expenses-Maintenance 65 861 Maintenance Supervision and Engineering $ 4,709.58 S - $ 4,709.68 66 862 Maintenance of Structures and Improvements 10,129.09 - 10,129.09 67 863 Maintenance of Mans 322,979.12 - 322,979.12 68 864 Maintenance of Compressor Station Equipment 83.330.83 - 83,330.63 69 865 Maintenance of Measuring and Regulating Station Equipment 274,674.96 - 274,674.96 70 866 Maintenance o1 Communication Equipment 42.79324 - 42.79324 71 867 Maintenance of Other Equipment - - 72 Total Transmission Expenses-Maintenance $ 738,616.82 S • S 738.616.82 73 74 Customer Accounts Expenses 75 903 Customer Records and Collection Expenses $ - $ - $ - 76 904 U..coasefltle Accounts - - - 77 Total Customer Accounts Expenses $ • $ - $ - 78 79 AdrnMHtrativ and General Expenses 80 920 Administrative and General Saames $ 1,106,805.11 $ 777,984.37 $ 1,884,789.48 81 921 Office Supplies and Expenses - 82 923 Outside Services Employed 1,032.16226 (878,863.54) 153,498.72 83 924 Property Insurance(111Pe: - - 64 925 Injuries and Damages - 85 926 Employee Pensions and Benefits • 86 928 Regulatory CommissionExpenses - - 87 9302 Miscellaneous General Expense - - - 88 931 Rents - • - 89 932 Maintenance of General Pam - - 90 Total Administrative and General Expenses $ 2,138,967.37 $ (100,679.17) $ 2.03828820 91 92 Total Operation and Maintenance Expenses S 17,803,677.31 $ (100,879.17) $ 17,702,996.14 (Z LI 2 4\ Vs, )!ale I C' Z - 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(060, o�lQo I oa 2 ��2;22�2 �3! �k/I,�i..m!! o- 2a aaaaaaaa■§ _Q2a■■B §! !;©E§§EW II 8G84282 ■ss;■;;■■:58ERgPP/Ilee�Pe■;2;;■■6ssa;■ Schedule G-4(P) Page 1 Of 1 T%U GAS—PIPELINE (iii„ NON-LABOR EXPENSE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Non-Labor No. Acct Description Total Adjustments As Adjusted (a) (b) (c) (0) (e) 1 Natural Gas Production end Gathering-Operation 2 750 Operation Supervision and Engueenrg $ 4.638.15 $ - $ 4,636.15 3 752 Gas Wells Expenses 34.05 - 34.05 4 753 Field Line Expenses 79,092.88 - 79.092.88 5 754 Field Compressor Station Expenses 392.38 - 392.38 6 756 Field Measuring and Regulating Station Expenses 21,796.11 - 21,796.11 7 757 Purification Expenses 42.994.61 (41.660.02) 1,334.59 8 Total Natural Gas Production and Gathenng-Operation Expenses $ 149,148.18 $ (41.660.02) $ 107,488.16 9 10 Natural Gas Production and Gathering-Maintenance 11 764 Maintenance of Field Lines $ 17,91029 $ - $ 17,91029 12 765 Maintenance of Field Compressor Station Equipment 29,656.88 - 29.656.88 13 766 Maintenance of Field Measuring and Regulating Station Equipment 6,096.61 • 6,096.61 14 767 Maintenance of Purification Equipment 53.98 - 53.98 15 Total Natural Gas Production and Gathering-Maintenance Expenses $ 53,717.76 $ - $ 53,717.76 16 17 Other Gas Supply Expenses 18 801 Natural Gas Feld Line Purchases $ 149.54 $ (149.54) $ - 19 802 Natural Gas Gasoline Plant Outlet Purchases 8.53 (8.53) - 20 805 Other Gas Purchases (4,978.791.90) 4.978.791.90 21 806 Exchange Gas 2,896,040.38 (2.896.040.38) - 22 808 Gas Withdrawn from Storage-Debit 550.00 (550.00) - 23 809 Gas Delivered to Storage-Credit (263,902.10) 263,902.10 24 813 Other Gas Supply Expenses (375.44) 375.44 - 25 Total Other Gas Supply Expenses $ (2.346,320.99) $2.346.320.99 $ - 26 27 Underground Storage Expenses-Operation 28 814 Operation Supervision and Engineerg $ 35.119.56 $ - $ 35.119.56 29 816 Wells Expenses 37,709.98 - 37,709.98 30 817 Lines Expenses 1,003.67 1,003.67 31 818 Compressor Station Expenses 833.448.52 (26.46) 833,422.06 32 819 Compressor Station Fuel and Power 1,103,52126 (1,103.521.28) - 33 820 Measuring and Regulating Station Expenses 29,461.58 - 29.461.58 34 821 Purification Expenses 84226.40 (70,96226) 13264.14 35 823 Gas Losses 105,716.68 (105,716.68)36 824 Other Expenses 8,448.89 (2,538.67) 5,910.02 37 825 Storage Welts Royalties 445,942.37 (143.32) 445,799.05 tia,,, 38 826 Rents 13.113.31 - 13.113.31 39 Total Underground Storage Expenses-Operation rag $ 2.697,71224 $(1282.908.87) $ 1,414,603.37 40 41 Underground Stormier Expenses-Maintenance 42 831 Maintenance of Structures and Improvements $ 14,018.08 $ $ 14,018.08 43 832 Maintenance of Reservoirs and Wells 73,281.95 - 73281.95 44 833 Maintenance of Lines 54,845.37 - 54,845.37 45 834 Maintenance of Compressor Station Equipment 668,51829 - 668.51829 46 835 Maintenance of Measuring and Regulating Station Equipment 14,938.07 - 14,938.07 47 836 Maintenance of Purification Equipment 67,792.58 - 67,792.58 48 837 Maintenance of Other Equipment 4,163.95 - 4,163.95 49 Total Underground Storage Expenses-Maintenance $ 897.55829 $ - $ 897.55829 50 51 Transmission Expenses-Operation 52 850 Operation Supervision and Engineenng $ 736.458.01 $ (349.00) $ 736.109.01 53 851 System Control and Load Dispatching 1,429,109.89 1,429,109.69 54 852 Communications System Expenses 934,976.67 - 934,976.67 55 853 Compressor Station Labor and Expenses 471,214.53 - 471214.53 56 854 Gas for Compressor Station Fuel 4,662,330.38 (4.660.806.38) 1224.00 57 856 Mains Expenses 10,888,145.22 2,490,889.13 13.379.034.35 58 857 Measuring and Regulating Station Expenses 3,323,699.04 (233.00) 3.323.486.04 59 858 Transmission and Compression of Gas by Others (288270.36) 640,12827 351.857.89 60 859 Other Expenses 1,639215.40 - 1.609215.40 61 860 Rents 92.733.26 (850.00) 91,88326 62 Total Transmission Expenses-Operation $ 23,859,612.02 $(1,531220.98) $ 22,328,391.04 63 64 Transmission Expenses-Maintenance 65 861 Maintenance Supervision and Engineering $ 775.42 $ $ 775.42 66 862 Maintenance of Structures and Improvements 38,296.77 - 38,296.77 67 863 Maintenance of Mains 684,449.59 842.64 68529223 68 864 Maintenance of Compressor Station Equipment 200,055.58 - 200,055.58 69 865 Maintenance of Measuring and Regulating Station Equipment 355.401.47 2729 355,428.76 70 866 Maintenance of Communication Equipment 76.927.72 - 76,927.72 71 867 Maintenance of Other Equipment 99.701.38 - 99.701.38 72 Total Transmission Expenses-Maintenance $ 1,455,607.93 $ 869.93 $ 1,456,477.86 73 74 Customer Accounts bunnies 75 903 Customer Records and Collection Expenses $ 169.958.78 $ - $ 169,958.78 76 904 Uncolleetlble Accounts 523.896.56 - 523.896.58 77 Total Customer Accounts Expenses $ 693,855.34 $ $ 693.855.34 78 79 ?dminisbetive and General Expenses 80 920 Adnnstrative and General Salaries $ 63,593.97 $ - $ 63,593.97 81 921 Office Supplies and Expenses 609,098.34 (17.375.90) 591.722.44 82 923 Outside Services Employed 22,858,617.01 (6,185,633.20) 16.672.963.81 83 924 Property Insurance 416,427.40 64,052.71 480.480.11 (BPI 84 925 Injuries end Damages 811,409.73 104,890.39 918.30012 85 926 Employee Pensions and Benefits 1.615246.12 6,368,39522 7,963,641.34 86 928 tiepulatoryCommicsionExlpeuses 1,022,858.57 (1,022.858.57) 87 9302 Miscellaneous General Expense 443,554.65 659.123.97 1,102,678.92 88 931 Rents 346,708.15 - 346,708.15 89 932 Maintenance of Genera/Plant 14022 - 140.22 90 Total Administrative and General Expenses $ 28,187,654.16 $ (29.405.38) $ 28.158248.78 91 92 Total Operation and Maintenance Expenses $ 55.648.544.93 $ (538.004.33) $ 55,110,54020 /15 (� d . . . . . . . . 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F- C Z J r N CI) 'Cr ILO) CO N- A 0 I- N CD C Cr) It) CO Schedule G-5.1 (P) (111111, Page 1 of 1 TXU GAS—PIPELINE ADVERTISING EXPENSE ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 756 Field Measuring and Regulating Station Expenses WP/G-5.1 (P) $ 46.43 2 816 Wells Expenses WP/G-5.1 (P) 75.00 3 818 Compressor Station Expenses WP/G-5.1 (P) 125.28 4 856 Mains Expenses WP/G-5.1 (P) 1,648.76 5 857 Measuring and Regulating Station Expenses WP/G-5.1 (P) 100.41 6 Total System Advertising Expense $ 1,995.88 7 8 Total Operating Revenue F-1 (P) $ 128,546,224.78 9 Less: 904 Uncollectible Accounts G-2(P) 523,896.56 10 11 Total Gross Receipts $ 128,022,328.22 12 13 Allowable Percentage for Advertising per Substantive Rule 7.5414 0.500% 14 15 Calculated Allowable Advertising Expense $ 640,111.64 16 17 18 Total Advertising Expense Included in Rate Filing $ 1,995.88 19 20 Total Advertising Expense Adjustment $ 21 22 23 The above information is provided per Substantive Rule 7.5414. The advertising expense included in the rate filing is below the (air, 24 allowable level,consequently,an adjustment to expense is not required. Schedule G-5.2(P) (100 Page 1 of 1 TXU GAS—PIPELINE CONTRIBUTIONS AND DONATIONS EXPENSE ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Contributions and Donations Expense Adjustment 2 3 Total Contributions and Donations Expense WP/G-5.2(P) $ 1,050.00 4 5 Less: 6 426 Miscellaneous Income Deductions WP/G-5.2(P) 875.00 7 8 Var Non-Labor Expense WP/G-5.2(P) $ 175.00 9 10 Total Contributions and Donations Expense Adjustment $ (175.00) 11 12 13 Adjustment to expense to remove contribution and donations in accordance with Substantive Rule 7.5414. cry Schedule G-5.3(P) Page 1 of 1 (ibe TXU GAS—PIPELINE SOCIAL CLUB DUES ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Social Club Dues Adjustment 2 3 Total Social Club Dues WP/G-5.3(P) $ 2,145.92 4 5 Less: 6 186 Miscellaneous Deferred Debits WP/G-5.3(P) 80.58 7 8 9 921 Non-Labor WP/G-5.3(P) $ 2,065.34 10 11 Total Social Club Dues Adjustment $ (2,065.34) 12 13 14 Adjustment to expense to remove social club dues in accordance with Substantive Rule 7.5414. Schedule G-5.4(P) (111W Page 1 of • TXU GAS—PIPELINE LEGISLATIVE ADVOCACY ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Legislative Advocacy Adjustment 2 3 4 5 930.2 Non-Labor Expense WP/G-5.4/1 (P) $ 425.96 6 7 Total Legislative Advocacy Adjustment $ (425.96) 8 9 10 Adjustment to expense to remove legislative advocacy costs in accordance with Substantive Rule 7.501. 11 (NW 12 The last odd-year legislative advocacy expense(2001)is presented below per Substantive Rule 7.501 13 14 Total Legislative Advocacy for last odd year(2001) WP/G-5.4/2(P) $ 415.61 Schedule G-5.5(P) (be Page 1 of 2 TXU GAS-PIPELINE MISCELLANEOUS ACCOUNT REVISIONS ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Amount No. Acct Description Reference Labor Non-Labor Adjusted (a) (b) (c) (d) (e) (I) 1 Natural Gas Production and Gathering-Operation 2 750 Operation Supervision and Engineering WP/G-5.5(P) $ - S • $ • 3 752 Gas Wells Expenses WP/G-5.5(P) - - - 4 753 Field Line Expenses WP/G-5.5(P) - - - 5 754 Field Compressor Station Expenses WP/G-5.5(P) - - - 6 756 Field Measuring and Regulating Station Expenses WP/G-5.5(P) - - - 7 757 Purification Expenses WP/G-5.5(P) - - - 8 Total Natural Gas Production and Gathering-Operation Expenses S - S - S - 9 10 Natural Gas Production and Gathering-Maintenance 11 764 Maintenance of Field Lines WP/G-5.5(P) $ - $ - $ - 12 765 Maintenance of Field Compressor Station Equipment WP/G-5.5(P) - - - 13 766 Maintenance of Field Measuring and Regulating Station Equipment WP/G-5.5(P) - - - 14 767 Maintenance of Purification Equipment WP/G-5.5(P) - - • 15 Total Natural Gas Production and Gathering-Maintenance Expenses S - S - S - 16 17 Other Gas Supply Expenses 18 801 Natural Gas Field Line Purchases WP/G-5.5(P) $ - $ - $ - 19 802 Natural Gas Gasoline Plant Outlet Purchases WP/G-5.5(P) - - - 20 805 Other Gas Purchases WP/G-5.5(P) - - - 21 806 Exchange Gas WP/G-5.5(P) - - - 22 808 Gas Withdrawn from Storage-Debit WP/G-5.5(P) - - - 23 809 Gas Delivered to Storage-Credit WP/G-5.5(P) fhailor - 24 813 Other Gas Supply Expenses WP/G-5.5(P) - 25 Total Other Gas Supply Expenses S S S - 26 27 Underground Storage Expenses-Operation 28 814 Operation Supervision and Engineering WP/G-5.5(P) $ - $ - $ - 29 816 Wells Expenses WP/G-5.5(P) - - - 30 817 Lines Expenses WP/G-5.5(P) - - - 31 818 Compressor Station Expenses WP/G-5.5(P) - (26.46) (26.46) 32 819 Compressor Station Fuel and Power WP/G-5.5(P) - - - 33 820 Measuring and Regulating Station Expenses WP/G-5.5(P) - - - 34 821 Purification Expenses WP/G-5.5(P) - - - 35 823 Gas Losses WP/G-5.5(P) - (105,716.68) (105,716.68) 36 824 Other Expenses WP/G-5.5(P) - - - 37 825 Storage Wells Royalties WP/G-5.5(P) - (143.32) (143.32) 38 826 Rents WP/G-5.5(P) - - - 39 Total Underground Storage Expenses-Operation S - S (105.8116.46) S (105,886.46) 40 41 Underground Stomas Expenses-Maintenance 42 831 Maintenance of Structures and Improvements WP/G-5.5(P) $ - $ - $ - 43 832 Maintenance of Reservoirs and Wells WP/G-5.5(P) - - - 44 833 Maintenance of Lines WP/G-5.5(P) - - - 45 834 Maintenance of Compressor Station Equipment WP/G-5.5(P) - - - 46 835 Maintenance of Measuring and Regulating Station Equipment WP/G-5.5(P) - - - 47 836 Maintenance of Purification Equipment WP/G-5.5(P) - - 48 837 Maintenance of Other Equipment WP/G-5.5(P) - - - 49 Total Underground Storage Expenses-Maintenance S - S - S • 50 51 Transmission Expenses-Operation 52 850 Operation Supervision and Engineering WP/G-5.5(P) $ - $ (349.00) $ (349.00) 53 851 System Control and Load Dispatching WP/G-5.5(P) - • 54 852 Communications System Expenses WP/G-5.5(P) • - - 55 853 Compressor Station Labor and Expenses WP/G-5.5(P) - - - 56 854 Gas for Compressor Station Fuel WP/G-5.5(P) - - - 57 856 Mains Expenses WP/G-5.5(P) - (1,573.83) (1,573.83) 58 857 Measuring and Regulating Station Expenses WP/G-5.5(P) - (20.01) (20.01) 59 858 Transmission and Compression of Gas by Others WP/G-5.5(P) - 640,128.27 640,128.27 (Of 60 859 Other Expenses WP/G-5.5(P) - 61 860 Rents WP/G-5.5(P) (850.00) (850.00) 62 Total Transmission Expenses-Operation S S 637,335.43 S 637,335.43 63 Schedule G-5.5(P) Co, Page2of2 TXU GAS—PIPEUNE MISCELLANEOUS ACCOUNT REVISIONS ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Amount No. Acct Description Reference Labor Non-Labor Adjusted (a) (b) (C) (d) (e) (I) 64 Transmission Expenses-Maintenance 65 861 Maintenance Supervision and Engineering WP/G-5.5(P) $ - $ - $ - 66 862 Maintenance of Structures and Improvements WP/G-5.5(P) - - - 67 863 Maintenance of Mains WP/G-5.5(P) - - 68 864 Maintenance of Compressor Station Equipment WP/G-5.5(P) - - 69 865 Maintenance of Measuring and Regulating Station Equipment WP/G-5.5(P) - - 70 866 Maintenance of Communication Equipment WP/G-5.5(P) - - - 71 867 Maintenance of Other Equipment WP/G-5.5(P) - - - 72 Total Transmission Expenses-Maintenance $ - S - S - 73 74 Customer Accounts Expenses 75 903 Customer Records and Collection Expenses WP/G-5.5(P) $ - $ - $ - 76 904 Uncollectible Accounts WP/G-5.5(P) - - - 77 Total Customer Accounts Expenses S - S - S - 78 79 Administrative and General Expenses 80 920 Administrative and General Salaries WP/G-5.5(P) $ 877,360.83 $ - $ 877,360.83 81 921 Office Supplies and Expenses WP/G-5.5(P) - (15210.56) (15,210.56) 82 923 Outside Services Employed WP/G-5.5(P) - 185,781.86 185.781.86 83 924 Property Insurance WP/G-5.5(P) - - - 84 925 Injuries and Damages WP/G-5.5(P) - - 85 926 Employee Pensions and Benefits WP/G-5.5(P) - - 86 928 Regulatory Commission Expenses WP/G-5.5(P) - (1,022.858.57) (1,022.858.57) L. 87 9302 Miscellaneous General Expense WP/G-5.5(P) 153,009 00 153 009-00 88 931 Rents WP/G-5.5(P) - - - 89 932 Maintenance of General Plant WP/G-5.5(P) - 90 Total Administrative and General Expenses S 877.360.53 S (699,275.27) S 175,082.56 91 92 Total Miscellaneous Account Revisions Adjustment S 877,360.83 S (167,529.30) S 709,531.83 93 94 95 96 Adjustment to expense for aviation,entertainment,rate case expenses recovered through surcharges,non-recurring charges,tax-related 97 penalties and fees,deferred compensation incentive plan costs,and a compensation increase. For additional detail,reference WP/G-5.5. Schedule Pagege 1 1 of 1 TXU GAS—PIPELINE INSURANCE PREMIUMS ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT AND S.N.RAGLAND Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Insurance Premiums Adjustment 2 3 924 Labor WP/G-5.6(P) $ 4 924 Non-Labor WP/G-5.6(P) 64,052.71 5 925 Labor WP/G-5.6(P) - 6 925 Non-Labor WP/G-5.6(P) 104,890.39 7 8 Total Insurance Premiums Adjustment $ 168,943.10 9 10 11 Adjustment to insurance premiums and claims expenses in the test year for known and measurable changes. The increase 12 in liability and property insurance premiums is due to higher policy limits which went into effect in mid 2002. The increase 13 in third party workers compensation is due to an increase in premiums. L Schedule G-5.7(P) (1110° Page 1 of 1 TXU GAS—PIPELINE PENSION&BENEFIT EXPENSE ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Pension&Benefit Expense Adjustment 2 3 926 Labor $ - 4 926 Non-Labor WP/G-5.7(P) 2,580,097.75 5 6 Total Pension&Benefit Expense Adjustment $ 2,580,097.75 7 8 9 Adjustment to pension and health-related employee benefit expenses due to increased medical costs,decreased values 10 in trusts used to fund retirement benefits,and reductions in expected returns on pension fund assets from 9%to 6.75%. Schedule G•5.8(P) Page 1 of 1 TXU GAS—PIPELINE PIPELINE INTEGRITY PROGRAM ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS: R.K.PRUETT AND J.A.GREER Line NARUC Amount No. Aect Description Reference Labor Non-Labor Adjusted (a) (b) (c) (d) (e) (f) 1 Pipeline Integrity Program Adjustment 2 -.. 3 856 Mains Expenses WP/G-5.8(P) $ - $ 2,480,381.78 $ 2,480,381.78 4 863 Maintenance of Mains WP/G-5.8(P) - 842.64 842.64 5 865 Maintenance of Measuring and Regulating Station Equipment WP/G-5.8(P) - 27.29 27.29 6 923 Outside Services Employed WP/G-5.8(P) - 178.69 178.69 7 8 Total Pipeline Integrity Program Adjustment $ - $ 2,481,430.40 S 2,481,430.40 9 10 11 To include in the test year an amount of expense for the Pipeline Integrity Program. Refer to the direct testimony of Mr.J.A.Greer. L L Schedule G-5.9(P) Page 1 of 1 (00, TXU GAS—PIPELINE WINS-TXU BUSINESS SERVICES COST REDUCTION ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS:M.D.MOSELEY,R.K.PRUETT,S.N.RAGLAND Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 WINS-TXU Business Services Cost Reduction Adjustment 2 3 923 Labor WP/G-5.9(P) $ - 4 923 Non-Labor WP/G-5.9(P) (1,175,977.36) 5 6 Total WINS-TXU Business Services Cost Reduction Adjustment $ (1,175.977.36) 7 8 9 To include in the test year a reduction in expense for the WINS-TXU Business Services Cost Reduction. Refer to 10 the direct testimony of Mr.M.D.Moseley and Mr.S.N.Ragland. CP° Schedule G-5.10(P) (111rf Page 1 of 1 TXU GAS—PIPELINE WINS-TXU BUSINESS SERVICES REGULATORY ASSET ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS: M.D.MOSELEY,R.K.PRUETT,S.N.RAGLAND Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 WINS-TXU Business Services Regulatory Asset Adiustment 2 3 930.2 Labor WP/G-5.10(P) $ - 4 930.2 Non-Labor WP/G-5.10(P) 113,043.18 5 6 Total WINS-TXU Business Services Regulatory Asset Adjustment $ 113,043.18 7 8 9 To adjust expense in the test year to include one year of amortization relative to the WINS-TXU 10 Business Services Regulatory Asset. Refer to the direct testimony of Mr. M.D.Moseley and 11 Mr.S.N. Ragland. (111111W Schedule G-5.11 (P) Page 1 of 1 Le- TXU GAS—PIPELINE WINS RELATED(ONCOR)COST REDUCTION ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS: J.A.GREER,M.D.MOSELEY,AND R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 WINS Related(Oncor)Cost Reduction Adiustment 2 3 920 Labor WP/G-5.11 (P) $ (978,040.00) 4 926 Non-Labor WP/G-5.11 (P) (357,356.00) 5 930.2 Non-Labor WP/G-5.11 (P) 321,852.00 6 7 Total WINS Related(Oncor)Cost Reduction Adjustment $ (1,013,544.00) 8 9 10 To adjust expense in the test year for WINS Related(Oncor)reductions. Refer to the direct testimony of 11 Mr.J.A.Greer and Mr.M.D.Moseley. Schedule G-5.12(P) Page 1 of 1 TXU GAS—PIPELINE REGULATORY ASSET AMORTIZATION ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSORS: M. D. MOSELEY AND R. K. PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Regulatory Asset Amortization Adjustment 2 3 930.2 Labor WP/G-5.12(P) $ - 4 930.2 Non-Labor WP/G-5.12(P) 71,720.75 5 6 Total Regulatory Asset Amortization Adjustment $ 71,720.75 7 8 9 To include in expense one year of amortization expense related to the 1999 Enhanced Retirement and 10 Voluntary Severance Program. Refer to the direct testimony of Mr. M. D.Moseley. (ire Schedule G-5.13(Pj Page oil C TXU GAS—PIPELINE ACCOUNT RECLASSIFICATIONS/ADJUSTMENTS FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Labor Non-Labor Total Adjusted (a) (b) (c) (d) (e) (I) (g) 1 Account Reclassifications/Adjustments 2 3 920 Administrative and General Salaries WP/G-5.13(P) $ 878.663.54 $ - $ 878,663.54 4 923 Outside Services Employed WP/G-5.13(P) (878,663.54) (5,195.616.39) (6,074,279.93) 5 926 Employee Pensions and Benefits WP/G-5.13(P) - 4.145.653.47 4,145,653.47 6 Totals $ - S (1.049.962.92) $ (1.049.962.92) 7 8 Total Account Reclassifications/Adjustments $(1,049,962.92) 9 10 11 Reclassification of O&M expense recorded in the test year from NARUC Account 923 to NARUC Accounts 920 and 926. Schedule G-5.14(P) Page 1 of 1 (Me TXU GAS—PIPELINE FUEL,LOSS AND OTHER GAS RELATED EXPENSES ADJUSTMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR:R.K.PRUETT Line NARUC Test Year Amount No. Acct Description Reference Amount Adjusted (a) (b) (c) (d) (e) 1 Fuel,Loss and Other Gas Related Expenses Adjustment 2 3 Non-Labor 4 5 757 Purification Expenses WP/G-5.14/1 (P) $ 41,660.02 6 801 Natural Gas Field Line Purchases WP/G-5.14/1 (P) 149.54 7 802 Natural Gas Gasoline Plant Outlet Purchases WP/G-5.14/1 (P) 8.53 8 805 Other Gas Purchases WP/G-5.14/1 (P) (4,978,791.90) 9 806 Exchange Gas WP/G-5.14/1 (P) 2,896,040.38 10 808 Gas Withdrawn from Storage-Debit WP/G-5.14/1 (P) 550.00 11 809 Gas Delivered to Storage-Credit WP/G-5.14/1 (P) (263,902.10) 12 813 Other Gas Supply Expenses WP/G-5.14/1 (P) (375.44) 13 819 Compressor Station Fuel and Power WP/G-5.14/1 (P) 1,103,521.28 14 821 Purification Expenses WP/G-5.14/1 (P) 70,962.26 (ow 15 824 Other Expenses WP/G-5.14/1 (P) 2,538.87 16 854 Gas for Compressor Station Fuel WP/G-5.14/1 (P) 4,660,806.38 17 856 Mains Expenses WP/G-5.14/1 (P) (12,081.18) 18 857 Measuring and Regulating Station Expenses WP/G-5.14/1 (P) 212.99 19 20 Total Fuel,Loss and Other Gas Related Expenses Adjustment $ (3,521,299.63) 21 22 23 To adjust expense to remove the cost of the commodity,and other gas related expenses from O&M which are recovered 24 through retention. 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CO 0) 0 — N N CC9 J NNNNNNNNN CO O C) L Schedule G-8 (P) Page 1 of 1 TXU GAS—PIPELINE EXCLUDED OPERATING EXPENSES FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line NARUC Amount No. Acct. Description Per Book (a) (b) (c) 1 426.1 Donations $ 2,375.00 2 3 426.4 Lobbying 9,703.26 4 5 426.5 Other 5,018.00 6 7 Total Excluded Operating Expenses $ 17,096.26 8 9 10 The amounts listed above are excluded from the cost of service filing. Schedule H-1 (P) Page 1 of 8 TXU GAS—PIPELINE (law OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account-Description Amount (a) (b) 1 OPERATING REVENUES 2 4569000 Oth Rev-Other - 3 Electric-trade $ - 4 Electric-affiliated companies $ - 5 4800000 Residential Sales - 6 4800110 Over_Under Collection-Res - 7 4810100 Gas Sales-Commercial (Small) - 8 4810110 Over_Under Collection-Corn - 9 4810200 Ind Gas Sales To Non-Assoc Co - 10 4810210 Industrial Large Sales - 11 4811200 Electric Generation Small Sale - 12 4820000 Other Sales- Public Authority - 13 4830000 Gas Sales for Resale - 14 4860100 Unbilled Residential Gas Rev - 15 4860200 Unbilled Commercial Gas Rev - 16 4860300 Unbilled Industrial Gas Rev - 17 4870000 Forfeited Discount-Residential - (NW 18 Gas-trade $ 19 4830111 Sales For Resale-LUG Adj 20 4831401 Sales For Resale Assoc R & C - 21 4831402 Sales For Resale Assoc Indstrl - 22 4831403 Sales For Resale Assoc-ElecGen - 23 Gas-affiliated companies $ - 24 Telecommunications-trade $ - 25 Telecommunications-affiliated companies $ - 26 4570010 Service Revenues - Pipeline - 27 4580000 Service Revenues-Non Assoc Cos - 28 4587000 Other Revenues - 29 4600100 Over_(Under) Recvry Adj To Rev - 30 4880200 Connect Charge - 31 4880300 Return Checks - 32 4880400 Collection Charges - 33 4890100 Industrial Transportation 19,542,439.31 34 4890103 Ind Trans-Tax Exempt - 35 4890110 Transp for LSG Trans-R&C 54,508,694.96 36 4890120 Transp for LSG Trans-Indust 1,313,876.89 37 4890140 Transp for LSG Trans-LUG Acc (376,650.00) 38 4890500 Electric Generation 13,148,347.71 39 4890544 Electric Gen-311(A)(2)-Texas 595,554.11 40 4890545 Transp- Swing Fees 2,144,543.98 41 4890550 Electric Generation-Assoc 10,079,751.82 42 4890554 Electric Gen 311(A)(2) -Assoc 110,337.15 43 4890600 Parking Transportation Revenue 291,731.38 44 4890644 Parking Transp Rev-311(A)(2) 4,250.00 45 4890700 Lending Transportation Revenue 14,790.99 46 4890800 Pipeline 12,933,975.74 Schedule H-1 (P) Page 2 of 8 TXU GAS—PIPELINE (kw OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 47 4890844 Pipeline-311(A)(2)-Texas 2,790,951.30 48 4890900 Imbalance Penalties 224,185.55 49 4891100 Compress Rev-Transp Customers 2,002,632.08 50 4891200 Other Transport Related Rev 4,000,847.89 51 4891900 HUB Transaction Revenue 172,653.03 52 4891944 HUB Trans Rev-311(A)(2)Texas 51,887.04 53 4910100 Rev-Natural Gas Proc by Others 108,786.00 54 4920400 Revenue From Condensate Sales 345,003.65 55 4930100 Rents Gas Props Non-Assoc Cos 8,300.00 56 4930200 Rent Gas Property-Assoc Cos 199,461.25 57 4930500 Rent Gas Property-Pipeline Fee 2,261.16 58 4950000 Other Gas Oil Revenue - 59 4950100 Other Gas Revenues 2,423,328.57 60 4950400 Other Gas Revenues-Assoc 1,023,708.57 61 4951100 Other O&M Services Fees 21,350.00 62 4951300 Other Transp Rev- Swing Fees 3,472.60 63 4951400 Nonassoc Dehydration&Oth Fee 133,544.80 (111W 64 4951500 Other Transp Rev-Pooling 704,753.53 65 4951550 Oth Transp Rev-Pooling Transf 17,453.72 66 4952100 Customer 0/U Collection - 67 4953200 Other Gas Rev- Stand-By Fees - 68 4960100 Rent Revenue-Building - 69 Other $ 128,546,224.78 70 Total operating revenues $ 128,546,224.78 71 ` -- 72 OPERATING EXPENSES 73 Fuel-trade $ - 74 Fuel-affiliated companies $ - 75 Purchased power-trade $ - 76 Purchased power-affiliated companies $ - 77 7800000 Products Purchased For Resale - 78 8000000 Nat Gas Well Head Purchase - 79 8000010 Gas Purchase Affiliated Cos - 80 8010000 Field Line Purchases 149.54 81 8020000 Plant Outlet Purchases 8.53 82 8030000 Transmission Line Purchases - 83 8040200 City Gate Purch-Company Use - 84 8040400 City Gate Purch-Residential - 85 8040401 City Gate Purch-Res Unbilled - 86 8040500 City Gate Purch-Commercial - 87 8040501 City Gate Purch-Com Unbilled(me - 88 8040600 City Gate Purch-Industrial 89 8040601 City Gate Purch-Ind Unbilled 90 8040700 City Gate Purch-Public Author - 91 8040800 City Gate Purch-Elect Generate - 92 8040900 City Gate Purch-Unaccounted - Schedule H-1 (P) Page 3 of 8 TXU GAS—PIPELINE (law OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 93 8040901 City Gate Pur-Unbilled Contra - 94 8040911 City Gate Purch-LUG Adjustment - 95 8050000 Gas Purchases-Third Party - 96 8050800 OGP-Retention-Distrib Credit 12,023.14 97 8051111 OGP-LUG Adjustment 1,272,706.47 98 8051500 OGP-LUG Memo (442,000.00) 99 8051600 OGP-LUG Contra 442,000.00 100 8051900 OGP-Line Pack (383,057.14) 101 8052000 OGP-Equalization Fees - 102 8060000 Exchange Gas 7,212,552.72 103 8061500 Exchange Gas-Assoc 9,723,444.72 104 8061510 Exchange Gas-Assoc-Retention (18,503,438.23) 105 8061520 Exchgas-Assoc-Retention Contra 18,503,438.23 106 8063000 Exchange Gas-Nonassoc-GMR174 1,244,975.77 107 8063030 System gas imbalance exp (9,369,476.12) 108 8063500 Openaccess Ferc 500-Imbal Egtc (229,807.60) 109 8064000 Valuat Gain_Loss-EGT_EES Recov (5,685,649.11) 110 8080000 Gas Withdrawn From Storage (N) 550.00 111 8080010 Primary Stor Gas Withdrawn Exp - 112 8080020 Secondary Stor Gas Withdrawn - 113 8090000 Gas Delivered To Storage(N) (263,902.10) 114 8090010 Primary Stor Gas Inject Exp - 115 8090020 Secondary Stor Gas Inject Exp - 116 8120000 Gas Used For Other Util Ops-CR - 117 8230000 Gas Losses 105,716.68 118 8589100 Gas Transportation-R&C-Assoc - 119 8589200 Gas Transportation-Ind-Assoc - 120 8589400 Gas Transportation-LUG-Assoc - 121 Energy purchase $ 3,640,235.50 122 8590000 Other Transmission System 1,620,803.11 123 TDSP and other electric transmission charges $ 1,620,803.11 124 Energy purchased for resale and fuel consumed $ 5,261,038.61 125 4081500 DOT Pipeline User Fee 725,113.33 126 4081992 Payroll Taxes Alloc-Enrgy Del 53,861.36 127 4082602 Ad Valorem - EN Del Operating 4,825,060.31 128 7500000 Oper-Super&Engineer-Compressor 32,304.02 129 7520000 Gas Wells 302.68 130 7530000 Field Line Expenses 166,104.05 131 7540000 Field Compressor Expense 2,578.04 132 7560000 Field Measuring&Regulating Sta 127,230.15 133 7570000 Purification Expense 43,362.51 (iw 134 7590000 Other Gathering System - 135 7640000 Maint-Field Lines 26,120.26 136 7650000 Maint-Field Compressor Station 31,915.82 137 7660000 Gath Sys Meas& Reg Equip-Maint 17,114.86 138 7670000 Maint-Purification Equipment 530.91 Schedule H-1 (P) Page 4 of 8 TXU GAS—PIPELINE thre OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account-Description Amount (a) (b) 139 7760000 Operation Supplies& Expense - 140 8053000 OGP-Co Used-Comp Sta Fuel-CR (5,803,159.06) 141 8053200 OGP-Co Used-Other Oper-CR (77,305.31) 142 8070000 Purchased Gas Expense - 143 8072000 Oper-Measuring Stations - 144 8130000 Other Gas Supply Expenses (375.44) 145 8140000 Oper-Supervision & Engineering 243,707.50 146 8160000 Storage Wells Expense 104,479.64 147 8170000 Storage Lines 10,444.30 148 8180000 Compressor Station Expense 1,931,500.32 149 8190000 Compressor Fuel & Power 1,103,521.28 150 8200000 Storage Measuring & Reg Statn 130,432.73 151 8210000 Purification Expense 116,830.71 152 8240000 Other Storage 8,448.89 153 8251000 Storage Well Royalties-Gas 445,942.37 154 8260000 Rents-Underground Storage 13,113.31 155 8310000 Maint-Structures&Improvements 14,136.72 Le 156 8320000 Maint-Resevoirs &Wells 109,748.88 157 8330000 Maint-Lines 58,506.93 158 8340000 Maint-Compr Station Equip 862,580.77 159 8350000 Maint-Mearsuring & Reg Equip 51,906.26 160 8360000 Maint-Purification Equipment 100,560.93 161 8370000 Maint-Other Storage Equipment 14,720.90 162 8500000 Oper-Supervision & Engineering 2,296,992.98 163 8510000 System Control & Load Dispatch 3,073,231.39 164 8520000 Communication System 1,461,406.80 165 8530000 Compressor Station Labor& Exp 737,254.62 166 8540000 Gas For Compressor Statn Fuel 4,662,330.38 167 8560000 Mains Exp-Transmission System 16,719,695.80 168 8569000 Mains Exp-Transmission Sys-Gas (32,512.79) 169 8570000 Measuring& Regulating Station 6,366,314.02 170 8580000 Trans& Compr Of Gas By Others (347,732.72) 171 8581000 Gas Transport Exp-Affiliates 59,462.34 172 8600000 Rents-Transmission System 92,733.26 173 8610000 Maint-Supervision&Engineering 5,485.00 174 8620000 Maint-Structures&Improvements 48,425.86 175 8630000 Maint Of Mains-Transmission 1,007,363.50 176 8633000 Pipe 65.21 177 8640000 Maint-Compressor Station Equip 283,386.41 178 8650000 Maint-Measuring & Reg Equip 630,076.43 179 8660000 Maint-Communication Equipment 119,720.96 (me 180 8670000 Maint-Other Equipment 99,701-38 181 8700000 Oper Supervision& Engineering 182 8740000 Mains& Services - 183 8750000 Measuring& Reg Sta-General - 184 8770000 Measuring& Reg Sta-City Gate - Schedule H-1 (P) Page 5 of 8 TXU GAS—PIPELINE (Ire OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account-Description Amount (a) (b) 185 8780000 Meter& House Regulator - 186 8790000 Customer Installations Expense - 187 8800000 Other Expenses - 188 8810000 Rents-Distribution - 189 8850000 Maint-Supervision&Engineering - 190 8860000 Maint-Structures&Improvements - 191 8870000 Maintenance Of Mains - 192 8890000 Maint-Meas&Reg Sta-General - 193 8900000 Maint-Meas&Reg Sta-Industrial - 194 8920000 Maintenance Of Services - 195 8930000 Maint-Meter&House Regulator - 196 8940000 Maint Of Other Equipment - 197 9230002 Out Sery Empl-Energy DeI/TUFCO 4,934,615.56 198 9240002 Property Ins - Energy Del 416,427.40 199 9250002 Injuries&Damages lns-Enrgy Del 811,409.73 200 9260002 Empl Pension&Benefit-Enrgy Del 482,803.28 201 Operating Expenses $ 49,419,997.73 (110, 202 4031200 Depr-Transmission Plant 8,465,304.13 203 4031210 Depr-Customer Sales Stations 6,416.40 204 4031220 Depr-Transm Compressor Statns 2,717,084.80 205 4031300 Depr-Distribution System - 206 4031500 Depr-Gathering System 1,834,252.98 207 4031600 Depr-Underground Storage 1,822,763.56 208 4031710 Depr-Gen PIt-Struc& Impry 61,287.32 209 4031720 Depr-Gen Pit-Off Fum& Equip 149,157.67 210 4031770 Gen PIt-Commun Equip 16,651.46 211 4031781 Depr-Gen PIt-Non-Assoc Mainfr - 212 4031790 Depr-Gen Pit-Misc Equip 237,089.90 213 4031798 Depr-General Plant - 214 4031921 Non-Oper Depr Exp Office Furni - 215 4040901 Operating Amortization Expense 441,811.18 216 4041920 Non-Op Amortization Expense - 217 4071000 Amort of Other Reg Asset - 218 Depreciation and amortization $ 15,751,819.40 219 Total direct costs and expenses $ 70,432,855.74 220 Gross margin $ 58,113,369.04 221 Other costs and expenses 222 4081000 FICA 193,584.11 223 4081100 Federal- Unemployment 2,714.40 224 4081970 Allocated Taxes FICA-Credit (188,995.93) 225 4081980 Allocated Taxes FUTA-Credit (3,388.55) (kw 226 4081990 Payroll Taxes Allocated 93,701.91 227 4082100 State- Unemployment 5,042.54 228 4082650 State-Ad Valorem-Prior Year (1,604.13) 229 4082980 Allocated Taxes SUTA-Credit (3,127.80) 230 4261000 Donations 2,375.00 Schedule H-1 (P) Page 6 of 8 TXU GAS—PIPELINE (kw OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 231 4264600 Lobbying - PAC- Non Operating 9,703.26 232 4265000 Other Deductions - Dues 5,018.00 233 9010000 Supervision-Customer Accounts - 234 9020000 Meter Reading Expenses - 235 9030000 Customer Records & Collections 3,045.00 236 9030001 Receivables Sale Fees 166,913.78 237 9030002 Customer Services-Affiliate - 238 9040000 Uncollectible Accounts 523,896.56 239 9040001 Non-CIS Related Uncollectibles 240 9101000 Customer Assistance (N) - 241 9111000 Informational Advertising (N) - 242 9130000 Advertising Expense - 243 9151000 Supervision(N) - 244 9161000 Demonstrating & Selling (N) - 245 9171000 Promotional Advertising (N) - 246 9181000 Miscellaneous (N) - 247 9200000 Administrative&Gen Salaries 1,170,399.08 Cor 248 9210000 Office Supplies& Expenses 609,098.34 249 9220000 Administrative Exp-Transferred - 250 9230000 Outside Services Employed 18,956,163.71 251 9231000 Outside Services-Assoc Cos - 252 9260000 Employee Pensions & Benefits 1,132,442.84 253 9280000 Regulatory Commission Expense 1,022,858.57 254 9301000 General Advertising Expenses - 255 9302000 Misc General Expenses 443,554.65 256 9302001 Credit Line Fees- Regulated - 257 9302100 Paid Losses - 258 9302200 Change in Loss Reserves - 259 9302301 Reinsurance Premium Expense - 260 9302302 Reinsurance Premium Income - 261 9302400 Commission Income - 262 9310000 Rents-Administrative& General 346,708.15 263 9311000 Rents-Admin &General-Assoc Co - 264 9320000 Maintenance Of General Plant 140.22 265 9429420 Ceded Premium Expense - 266 Selling,general and administrative expense $ 24,490,243.71 267 4082200 State Regulat Assessment&Fees 242,090.86 268 4082400 State-Gross Receipts - 269 4082410 State- Local Gross Receipts - 270 4082419 LGR - Denton Settlement Recove - 271 4082500 State- Franchise 73,434.64 (460, 272 Franchise and revenue based taxes $ 315,525.50 273 4150200 Merchandise Rev-Counter Sales 274 4201000 AFUDC-Equity(N) 92,431.74 275 4210300 Other Misc Nonoperating Income 4,300.00 276 4220100 Disposition Of Proprty-Gain(N) 3,769,101.83 Schedule H-1 (P) Page 7 of 8 TXU GAS—PIPELINE (11, OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account- Description Amount (a) (b) 277 Other income $ 3,865,833.57 278 4220200 Disposition Of Proprty-Loss(N) - 279 4250100 Misc Amortization 222,070.00 280 Other deductions $ 222,070.00 281 4190100 Interest& Dividend Inc-Misc 73,903.23 282 4190200 Interest Income-Associated Cos 7,036,146.16 283 Interest income $ 7,110,049.39 284 4310100 Other Interest Expense (27,419.13) 285 Interest expense-trade $ (27,419.13) 286 4300000 Interest On Debt To Assoc Cos 22,497,761.43 287 Interest expense-affiliated companies $ 22,497,761.43 288 4202000 AFUDC-Debt (N) (216,324.23) 289 Allowance for borrowed funds used during construction $ (216,324.23) 290 4370001 Allocated Preferred Stock 1,785,850.00 291 Preferred stock dividends of-subsidiaries $ 1,785,850.00 292 Interest expense and other charges $ 24,039,868.07 293 Total other costs and expenses $ 38,091,824.32 294 295 INCOME(LOSS) BEFORE INCOME TAXES 296 AND EXTRAORDINARY ITEMS $ 20,021,544.72 297 298 INCOME TAX EXPENSE(BENEFIT): 299 Currrent 300 4091000 Current FIT- Util Oper Income (1,282,469.53) 301 4092000 Current FIT-Other Income 3,841,973.86 302 Federal $ 2,559,504.33 303 Deferred: 304 4101000 Def FIT- Utility Oper Income 17,743,617.09 305 4111000 Def FIT- Utility Oper Income (12,635,057.18) 306 4112000 Def FIT- Non Operating Income - 307 Federal $ 5,108,559.91 308 4114000 Investment tax credits (27,362.21) 309 Total income taxes $ 7,640,702.03 310 311 INCOME(LOSS) BEFORE DISCONTINUED OPERATIONS 312 AND EXTRAORDINARY ITEMS $ 12,380,842.69 313 314 DISCONTINUED OPERATIONS, NET OF TAX EFFECT 315 4093000 Income Tax Extraordinary Item - 316 4350000 Extraordinary Deductions - 317 EXTRAORDINARY ITEMS, NET OF TAX EFFECT $ - 318 319 NET INCOME(LOSS) $ 12,380,842.69 320 321 PREFERRED STOCK DIVIDENDS $ - Schedule H-1 (P) Page 8 of 8 TXU GAS—PIPELINE (lisr OPERATING INCOME STATEMENT FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line No. Account-Description Amount (a) (b) 322 323 NET INCOME (LOSS)AVAILABLE FOR COMMON STOCK $ 12,380,842.69 L C Schedule H-2 (P) Page 1 of 11 TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account- Description December 31,2002 (a) (b) 1 1010200-IS-Transmission $ 526,722,047.46 2 1010201-IS-Transmission Fee Land 502,022.18 3 1010210-IS-Trans-City Gate Station 49,894.23 4 1010220-IS-Transm Compressor Stations 36,969,707.06 5 1010221-Transmission Compress Fee Land 65,341.68 6 1010500-IS-Gath-Rights of Way 16,995,339.72 7 1010600-IS-Underground Storage 77,527,858.47 8 1010601-IS-Underground Storag Fee Land 236,367.49 9 1010700-IS-Gen Plant-Fee Land 82,110.29 10 1010710-IS-Gen Plnt-Struct& Improv 3,058,381.59 11 1010720-IS-Gen Pint-Furn& Equip 9,332,890.62 12 1010730-IS-Transportation Equipment 5,027,071.27 13 1010740-IS-Gen Pint-Stores Equipment 28,647.77 14 1010750-IS-Gen Pint-Lab Equipment 29,349.01 (lror 15 1010760-IS-Gen Pint-Power Op Equip 4,551,697.39 16 1010770-IS-Gen Pint-Comm Equip 999,033.36 17 1010781-IS-Gen Pint-Computer Equip-PC 2,403,487.42 18 1010790-IS-Gen Plnt-Misc Equipment 11,421,103.17 19 1010900-IS-Intangible Plant 3,975,409.32 20 1070000-Construction Work In Progress 156,280,558.32 21 1079000-Construction-Credit to Plant (140,358,272.67) 22 1080200-RW IP-Transmission (13,879.20) 23 1080201-Non Depr-Transmission 120.79 24 1080500-RWIP-Gathering System 946.78 25 1080710-RWIP-Structures & Improvements - 26 1081200-APFD-Transmission (9,634,639.08) 27 1081210-APFD-Customer Sales Stations (6,416.40) 28 1081220-APFD-Transm Compressor Statns (2,717,084.80) 29 1081500-APFD-Gathering System (1,845,778.05) 30 1081600-APFD-Underground Storage (1,756,036.06) 31 1081710-APFD-Structures & Improvements 58,428.42 32 1081720-APFD-Office Furniture& Equip (149,157.67) 33 1081770-APFD-Communication Equipment (16,651.46) 34 1081790-APFD-Miscellaneous Equipment (237,089.80) 35 1082200-Retir-Transmission 3,080,228.22 36 1082201-Retir- Non Depr-Transmission 13.28 37 1082220-Retir-Transm Compressor Statns 98,500.59 38 1082500-Retir- Gathering System 672,953.49 39 1082600-Retir- Underground Storage 438,117.36 40 1082700-Retir-Non Depr-General Plant 12,657.49 41 1082710-Retir-Structures& Improvements 119,494.00 42 1082720-Retir-Office Furniture& Equip 815,265.65 43 1082730-Retir-Transportation Equipment 2,218,817.62 Schedule H-2 (P) Page 2 of 11 TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account-Description December 31,2002 (a) (b) 44 1082750-Retir- Laboratory Equipment 466,607.73 45 1082760-Retir-Power Operated Equipmen 2,010,980.77 46 1082770-Retir-Communication Equipment 447,989.77 47 1082781-Retir- Non Associate-Mainframe 26,728.48 48 1082790-Retir- Miscellaneous Equipment 415,676.16 49 1082900-Retir- Intangible 266,290.98 50 1083200-Salv-Transmission 1,617,100.00 51 1083220-Salv-Transm Compressor Statns - 52 1083500-Salv-Gathering System 769,500.00 53 1083600-Salv- Underground Storage (90,231.00) 54 1084200-0th Rec-Transmission (3,445,342.06) 55 1084220-0th Rec-Transm Compressor Stat (29,760.00) 56 1084500-0th Rec-Gathering System (795,160.00) 57 1084700-0th Rec-Non Depr-General Plant (4,500.28) 58 1086200-Transmission - Beg Bal (249,656,497.99) 59 1086201-Nondepr Transmission- Beg Bat 56,357.65 60 1086210-Cust Sales Stations-Beg Bal (4,389.20) 61 1086220-Trans Comp Stat-Beg Bal (10,336,385.54) 62 1086500-Gathering Systems - Beg Bal (1,907,339.92) 63 1086501-Gathering System-Land-Beg Bal 734.14 64 1086520-Gathering Compress Sta-Beg Bal - 65 1086600-Underground Storage- Beg Bat (27,107,643.18) 66 1086710-Structr and Improvmnts-Beg Bal (1,394,931.19) 67 1086720-Office Furn and Equip-Beg Bal (8,110,617.55) 68 1086730-Transp Equip-Beg Bal (5,434,416.67) 69 1086740-Stores Equip- Beg Bal (28,647.77) 70 1086750-Laboratory Equip- Beg Bal (495,956.74) 71 1086760-Power Operated Equip-Beg Bal (4,922,008.62) 72 1086770-Communication Equip- Beg Bal (1,284,810.86) 73 1086781-Non-assoc Mainframe- Beg Bal (1,861,093.03) 74 1086790-Miscellaneous Equip-Beg Bal (6,956,717.80) 75 1111000-Amortization- Plant (1,083,242.96) 76 1112000-Amortization- Storage Rights (32,434.89) 77 1140000-Gas Plant Acquisitn Adjustment 1,356,313.76 78 1150000-APFA-Gas Plt Acquisitn Adjust (815,623.76) 79 1173000-Gas Stored Undrgnd-Noncurr Oth 16,696,722.29 80 UTILITY PLANT $ 405,372,107.04 81 1211000-Real Estate 102,446.15 82 1231000-Advances To Assoc Cos - MP 284,198,989.69 83 1240000-Other Investments 464,146.47 84 1240010-0th Inv-Contra Credit-LTNR (40,640.40) 85 1241200-Other- Misc Investments 24,632.55 86 1243200-Split$ Life Ins 450,580.00 Schedule H-2 (P) Page 3 of 11 TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account- Description December 31,2002 (a) (b) 87 1243300-Supplemental Retirement Plan 69,212.00 88 1245100-Salary Deferral-7 Year Option - 89 1245500-Salary Deferral-7Yr Foundation 249,951.83 90 1245600-Salary Defer-Retire Foundation 128,886.34 91 INVESTMENTS $ 285,648,204.63 92 1317215-Cash-Chase-6795-Concentration 1,287,660.61 93 1410000-Notes Receivable-Current 248,287.32 94 1410010-Notes Rec- Contra Credit (41,052.28) 95 1428000-Customer AR Split to CIS - 96 1429000-Customer Rec AR Module Only (81,105.23) 97 1430100-Other Misc Accounts Receivable 255,162.90 98 1430200-Estimates 2,198,355.97 99 1431000-Payroll Deduction-Other (139,480.25) 100 1431060-Energy Conservation 7,020.68 101 1431110-Appliances 8,104.05 102 1433000-Sale of Misc Receivables (9,081,000.00) 103 1433001-Notes Receivable from ERINC 6,244,432.84 104 1438000-Customer AR Split from CIS - 105 1439000-Misc Rec AR Module Only 755,784.99 106 1439100-GCBS Only-Accounts Receivable 5,087,156.45 107 1440100-Uncollectible Accounts-Misc (620,158.73) 108 1440200-Sale Of Car-Credit 341,366.76 109 1460000-A_R -Associated Companies 21,570,213.72 110 1469000-A_R-Associated Cos-Advances - 111 1530000-Residuals& Extracted Products 61,722.69 112 1545000-Materials & Supp-PMMS Normal 3,105,590.96 113 1631100-Purchasing &Stores 4,751.05 114 1634000-Stores Sales& Use Tax 78,185.99 115 1640000-Gas Stored Underground-Current 8,750,407.53 116 1652100-Insurance 257,713.65 117 1659000-Other Prepayments 28,095.87 118 1729000-Rent Rec-A_R Module 1,738.92 119 1741230-Exchange Gas 2,062,396.38 120 1741233-System gas receivable 6,244,198.99 121 1741615-Exchange Gas-Imbalance-Affil - 122 1741636-Recoverable Exchange Gas-Affil - 123 1746000-Home Purchase Plan 7,714.11 124 CURRENT ASSETS $ 48,643,265.94 125 1823001-FAS 109-EPIS-Basis Differences 6,464.13 126 1823002-FAS 109-CW IP-Flow Through 614,365.28 127 1829900-Other Regulatory Assets 2,706,514.47 128 1847120-Labor Clearing - 129 1860100-Misc Deferred Debit-Other - Schedule H-2 (P) Page 4 of 11 (Ispe TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account-Description December 31,2002 (a) (b) 130 1860300-Other Work In Progress - 131 1862700-Job Orders - 132 1864400-Line Pack 2,774,295.75 133 1866300-1999 Severance Costs 871,851.91 134 1866320-WINS Project Cost 567,277.12 135 1868200-DICP-Unamort-Employee Deferral 55,462.50 136 1868300-DICP-Unamort-Company Match 161,223.75 137 1868400-DICP-Unamort-Incentive Award 13,916.56 138 1868510-SDP-Company Match 7 Yr Option 0.03 139 1868520-SDP-Unamort Comatch Retirement - 140 1868550-SDP Unamort Co Match-7Yr Found 32,641.82 141 1868560-SDP Unamort Co Match Retiree 23,607.16 142 1868900-Money Pool-Contrib To_From 1,045.42 143 1869000-Miscellaneous Deferred Debits - (1101 144 1869900-Validation Fatals 11,571.52 145 DEFERRED DEBITS $ 7,840,237.42 146 1900001-ADFIT-PEP 40,766.33 147 1900004-ADFIT-Vacations 2,214.41 148 1902001-ADFIT-Property Insuranc Resery 337,569.86 149 1902004-ADFIT-LESOP 37,088.32 150 1902012-ADFIT-Supplemental Retirement 25,108.65 151 1902013-ADFIT-Pension Plan 2,118,618.34 152 1902014-ADFIT-Deferred Incentive Comp (31,682.85) 153 1902015-ADFIT-Long Term Incentive Plan 82,391.12 154 1902016-ADFIT-Capit Exp-Gas Inventory 3,333,332.39 155 1902020-ADFIT-Salary Def Plan 7 Yr Opt 76,914.83 156 1902021-ADFIT-Salary Def Plan Ret Opt 85,881.46 157 1902023-ADFIT-OPEB and FAS 112 800,516.55 158 1902025-ADFIT-Provided For Misc Recv 1,154,170.98 159 1902033-ADFIT-Unamortized ITC 277,340.26 160 1902040-ADFIT-Ins Claims IBNR Accrual 20,225.80 161 1902058-ADFIT- Restoration &COLA Plan 234,212.15 162 1903110-DFIT-Purchase Acctg Adjustment - 163 ACCUMULATED DEFERRED TAX ASSETS $ 8,594,668.60 164 165 TOTAL ASSETS $ 756,098,483.63 166 167 2040801-Allocated Preferred Stock $ 37,500,000.00 Citaw 168 2049101-Allocated Preferred Securities 28,065,000.00 169 2110000-Miscellaneous Paid-In Capital 96,501,273.95 170 2160000-Unappropriated Ret Earnings 127,374,676.14 171 2160200-Purchase Accounting Adjustment (23,625,973.11) 172 2230000-Advances from Assoc Cos-MP 242,717,191.98 Schedule H-2 (P) Page 5 of 11 TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account- Description December 31,2002 (a) (b) 173 2240009-Allocated Lng Term Debt fr ENS 105,523,000.00 174 4393200-Other Compreh Income- Pensions (658,798.40) 175 CAPITAL $ 613,396,370.56 176 2320200-A_P-Gas Purchased 316,105.89 177 2320220-A_P-Gas Purchase-LUG Adjustmnt 2,496,681.43 178 2320300-Other Accounts Payable 14,167.81 179 2321900-PED- Loans 1,649.55 180 2321901-ENSAVE Loans - 181 2321902-PED - Bankruptcy 361.00 182 2321904-PED- Parking - 183 2321909-PED- Dependent Life Insurance (6.14) 184 2321911-Group Universal Life Ins 676.33 185 2321912-Vision Care (105.82) 186 2321916-PED-TU PAC 91.79 187 2321919-PED-Student Loans 188 2321920-PED -Thrift Plan Collections 5,095.56 189 2321921-PED- U.S. Savings Bonds - 190 2321922-ENSAVE Plan Collections - 191 2321924-PED- United Way 152.08 192 2321925-Lifestyle Account 74.95 193 2321928-PED-Thrift Loan Fees - 194 2321930-Thrift Plan - Employer Match 3,481.05 195 2321931-Voluntary Benefits 8.00 196 2321932-Accidental D&D 151.72 197 2321933-LT Disability 644.60 198 2322401-Employee Group Life Insurance 2,136.69 199 2322402-Retiree Dental Insurance (50,058.97) 200 2322403-Retiree Medical Insurance 67,776.61 201 2324000-Trade Payables &Vouchers 821,839.33 202 2328900-O_S Checks-Money Pool 2,351,576.53 203 2328950-EDI Payments Outstanding 23,533.67 204 2340000-A_P-Associated Companies 21,189,424.98 205 2361000-FICA- Employer 28,987.52 206 2361100-Accrd Federal Unemployment Tax 20.34 207 2361550-Accrued DOT Pipeline User Fee 115,419.03 208 2362100-Accrued State Unemployment Tax 53.15 209 2362200-State Regulat Assessment&Fees 61,089.36 210 2362600-State-Ad Valorem-Current Year 4,207,212.36 (kwe 211 2362610-State-Ad Valorem-Prior Year - 212 2362700-State-Other- Full Accrual 192,809.89 213 2362800-State-Other-Gross Production 548.54 214 2363800-FIT-Accrual 3,149,872.22 215 2411000-FICA Withheld 4,719.32 Schedule H-2 (P) Page 6 of 11 (11a, TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account- Description December 31,2002 (a) (b) 216 2411200-FIT-Withheld- Income Tax 18,313.28 217 2412200-SIT Withheld- Income Tax - 218 2412400-State-Gross Production 6,759.38 219 2412410-Tax Coll-St Gross Prod-Condens 593.61 220 2412500-Oil Field Clean Up Fee 15.30 221 2421230-Exchange Gas 8,306,596.28 222 2421233-System gas payable (0.02) 223 2421238-Open Access FERC Ord 500-Imbal - 224 2421630-Exchange Gas-Affiliated - 225 2421636-Exchange Gas-Delivered-Affil - 226 2421709-Other Current Liabilities - 227 2423400-Vacation 6,326.88 228 2423900-Other Accrued Payables 1,275,595.78 229 2424000-Payroll Accrual 37,480.32 (lior 230 2424100-Accrued Incentive Plans 293,332.00 231 2429300-Corporate Accruals 341,366.76 232 2429900-Other Accrued Liabilities 583,198.49 233 CURRENT LIABILITIES $ 45,875,768.43 234 2530001-FAS 109-Unamortized ITC 277,340.26 235 2531000-IBNR - Medical& Dental Claims 57,788.01 236 2533060-Restrictive Stock Award - 237 2533300-Retirement Plan 7,091,363.80 238 2533400-Supplemental Retirement Plan 71,739.00 239 2533500-FAS 112 224,553.00 240 2533900-OPEB-Other 2,107,287.08 241 2534000-Leveraged ESOP 105,966.59 242 2535100-Salary Deferral-7 Year Option 1,333.34 243 2535200-Salary Deferral-Retirement 1,333.38 244 2535500-Salary Deferral-7Yr Foundation 251,065.17 245 2535600-Salary Defer-Retire Foundation 267,649.39 246 2539000-Other Deferred Credits 1,630.00 247 2539050-Defer Cr-Cust Contributions 395,743.44 248 2539120-Restoration Plan 54,892.32 249 2539160-Enserch COLA Plan 614,285.25 250 2551000-Accumulated Deferred ITC 1,012,400.00 251 2553000-Rate Base Amortization (497,339.53) 252 2620000-Injuries & Damages Reserve (N) 272,500.00 253 2650000-Misc. Operating Reserves 200,000.00 (rage 254 DEFFERRED CREDITS $ 12,511,530.50 255 2822001-ADFIT-Liberalized Depreciation 69,421,152.81 256 2822002-ADFIT-CWIP-Basis Difference (49,192.53) 257 2822011-ADFIT-Oth Software DevelopCost 1,044,758.78 258 2822015-ADFIT-F109-EPIS-Flow Through 6,464.13 Schedule H-2 (P) Page 7 of 11 TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account- Description December 31,2002 (a) (b) 259 2822016-ADFIT-F109-CWIP-Flow Through 614,365.28 260 2822023-ADFIT-InterCo Transf Gain_Loss (367,510.76) 261 2832000-ADFIT-Other (354,737.60) 262 2832002-ADFIT-Other Regulatory Expense 0.01 263 2832031-ADFIT-1999 Enh Emp Separ Prog 529,029.20 264 2832039-ADFIT-WINS Costs 142,362.07 265 2835600-ADFIT on Reg Asset Bens-Mergr 947,280.06 266 ACCUMULATED DEFERRED TAX LIABILITIES $ 71,933,971.45 267 268 TOTAL LIABILITIES $ 743,717,640.94 269 270 4890100-Industrial Transportation $ 19,542,439.31 271 4890110-Transp for LSG Trans-R&C 54,508,694.96 272 4890120-Transp for LSG Trans-Indust 1,313,876.89 (ivor 273 4890140-Transp for LSG Trans-LUG Acc (376,650.00) 274 4890500-Electric Generation 13,148,347.71 275 4890544-Electric Gen-311(A)(2)-Texas 595,554.11 276 4890545-Transp- Swing Fees 2,144,543.98 277 4890550-Electric Generation-Assoc 10,079,751.82 278 4890554-Electric Gen 311(A)(2) -Assoc 110,337.15 279 4890600-Parking Transportation Revenue 291,731.38 280 4890644-Parking Transp Rev- 311(A)(2) 4,250.00 281 4890700-Lending Transportation Revenue 14,790.99 282 4890800-Pipeline 12,933,975.74 283 4890844-Pipeline-311(A)(2)-Texas 2,790,951.30 284 4890900-Imbalance Penalties 224,185.55 285 4891100-Compress Rev-Transp Customers 2,002,632.08 286 4891200-Other Transport Related Rev 4,000,847.89 287 4891900-HUB Transaction Revenue 172,653.03 288 4891944-HUB Trans Rev-311(A)(2)Texas 51,887.04 289 4910100-Rev-Natural Gas Proc by Others 108,786.00 290 4920400-Revenue From Condensate Sales 345,003.65 291 4930100-Rents Gas Props Non-Assoc Cos 8,300.00 292 4930200-Rent Gas Property-Assoc Cos 199,461.25 293 4930500-Rent Gas Property-Pipeline Fee 2,261.16 294 4950100-Other Gas Revenues 2,423,328.57 295 4950400-Other Gas Revenues -Assoc 1,023,708.57 296 4951100-Other O&M Services Fees 21,350.00 (11.•• 297 4951300-Other Transp Rev-Swing Fees 3,472.60 298 4951400-Nonassoc Dehydration &Oth Fee 133,544.80 299 4951500-Other Transp Rev-Pooling 704,753.53 300 4951550-0th Transp Rev-Pooling Transf 17,453.72 301 REVENUES $ 128,546,224.78 Schedule H-2 (P) Page 8 of 11 (Ilwe TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account- Description December 31,2002 (a) (b) 302 4031200-Depr-Transmission Plant 8,465,304.13 303 4031210-Depr-Customer Sales Stations 6,416.40 304 4031220-Depr-Transm Compressor Statns 2,717,084.80 305 4031500-Depr-Gathering System 1,834,252.98 306 4031600-Depr-Underground Storage 1,822,763.56 307 4031710-Depr-Gen Plt-Struc& Imp/ 61,287.32 308 4031720-Depr-Gen Plt-Off Furn & Equip 149,157.67 309 4031770-Gen Plt-Commun Equip 16,651.46 310 4031790-Depr-Gen Plt-Misc Equip 237,089.90 311 4040901-Operating Amortization Expense 441,811.18 312 4081000-FICA 193,584.11 313 4081100-Federal- Unemployment 2,714.40 314 4081500-DOT Pipeline User Fee 725,113.33 315 4081970-Allocated Taxes FICA-Credit (188,995.93) 316 4081980-Allocated Taxes FUTA-Credit (3,388.55) 317 4081990-Payroll Taxes Allocated 93,701.91 318 4081992-Payroll Taxes Alloc-Enrgy Del 53,861.36 319 4082100-State- Unemployment 5,042.54 320 4082200-State Regulat Assessment&Fees 242,090.86 321 4082500-State- Franchise 73,434.64 322 4082602-Ad Valorem - EN Del Operating 4,825,060.31 323 4082650-State-Ad Valorem-Prior Year (1,604.13) 324 4082980-Allocated Taxes SUTA- Credit (3,127.80) 325 4261000-Donations 2,375.00 326 4265000-Other Deductions - Dues 5,018.00 327 7500000-Oper-Super&Engineer-Compressor 32,304.02 328 7520000-Gas Wells 302.68 329 7530000-Field Line Expenses 166,104.05 330 7540000-Field Compressor Expense 2,578.04 331 7560000-Field Measuring&Regulating Sta 127,230.15 332 7570000-Purification Expense 43,362.51 333 7640000-Maint-Field Lines 26,120.26 334 7650000-Maint-Field Compressor Station 31,915.82 335 7660000-Gath Sys Meas& Reg Equip-Maint 17,114.86 336 7670000-Maint-Purification Equipment 530.91 337 8010000-Field Line Purchases 149.54 338 8020000-Plant Outlet Purchases 8.53 339 8050800-OGP-Retention-Distrib Credit 12,023.14 340 8051111-OGP-LUG Adjustment 1,272,706.47 341 8051500-OGP-LUG Memo (442,000.00) 342 8051600-OGP-LUG Contra 442,000.00 343 8051900-OGP-Line Pack (383,057.14) 344 8053000-OGP-Co Used-Comp Sta Fuel-CR (5,803,159.06) Schedule H-2 (P) Page 9 of 11 (ire TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account-Description December 31,2002 (a) (b) 345 8053200-OGP-Co Used-Other Oper-CR (77,305.31) 346 8060000-Exchange Gas 7,212,552.72 347 8061500-Exchange Gas-Assoc 9,723,444.72 348 8061510-Exchange Gas-Assoc-Retention (18,503,438.23) 349 8061520-Exchgas-Assoc-Retention Contra 18,503,438.23 350 8063000-Exchange Gas-Nonassoc-GMR174 1,244,975.77 351 8063030-System gas imbalance exp (9,369,476.12) 352 8063500-Openaccess Ferc 500-Imbal Egtc (229,807.60) 353 8064000-Valuat Gain_Loss-EGT_EES Recov (5,685,649.11) 354 8080000-Gas Withdrawn From Storage (N) 550.00 355 8090000-Gas Delivered To Storage (N) (263,902.10) 356 8130000-Other Gas Supply Expenses (375.44) 357 8140000-Oper-Supervision & Engineering 243,707.50 358 8160000-Storage Wells Expense 104,479.64 359 8170000-Storage Lines 10,444.30 360 8180000-Compressor Station Expense 1,931,500.32 361 8190000-Compressor Fuel& Power 1,103,521.28 362 8200000-Storage Measuring& Reg Statn 130,432.73 363 8210000-Purification Expense 116,830.71 364 8230000-Gas Losses 105,716.68 365 8240000-Other Storage 8,448.89 366 8251000-Storage Well Royalties - Gas 445,942.37 367 8260000-Rents-Underground Storage 13,113.31 368 8310000-Maint-Structures&Improvements 14,136.72 369 8320000-Maint-Resevoirs&Wells 109,748.88 370 8330000-Maint-Lines 58,506.93 371 8340000-Maint-Compr Station Equip 862,580.77 372 8350000-Maint-Mearsuring& Reg Equip 51,906.26 373 8360000-Maint-Purification Equipment 100,560.93 374 8370000-Maint-Other Storage Equipment 14,720.90 375 8500000-Oper-Supervision& Engineering 2,296,992.98 376 8510000-System Control & Load Dispatch 3,073,231.39 377 8520000-Communication System 1,461,406.80 378 8530000-Compressor Station Labor& Exp 737,254.62 379 8540000-Gas For Compressor Statn Fuel 4,662,330.38 380 8560000-Mains Exp-Transmission System 16,719,695.80 381 8569000-Mains Exp-Transmission Sys-Gas (32,512.79) 382 8570000-Measuring & Regulating Station 6,366,314.02 383 8580000-Trans &Compr Of Gas By Others (347,732.72) 384 8581000-Gas Transport Exp-Affiliates 59,462.34 385 8590000-Other Transmission System 1,620,803.11 386 8600000-Rents-Transmission System 92,733.26 387 8610000-Maint-Supervision&Engineering 5,485.00 Schedule H-2 (P) Page 10 of 11 (OW TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account- Description December 31,2002 (a) (b) 388 8620000-Maint-Structures&Improvements 48,425.86 389 8630000-Maint Of Mains-Transmission 1,007,363.50 390 8633000-Pipe 65.21 391 8640000-Maint-Compressor Station Equip 283,386.41 392 8650000-Maint-Measuring & Reg Equip 630,076.43 393 8660000-Maint-Communication Equipment 119,720.96 394 8670000-Maint-Other Equipment 99,701.38 395 9030000-Customer Records&Collections 3,045.00 396 9030001-Receivables Sale Fees 166,913.78 397 9040000-Uncollectible Accounts 523,896.56 398 9200000-Administrative&Gen Salaries 1,170,399.08 399 9210000-Office Supplies& Expenses 609,098.34 400 9230000-Outside Services Employed 18,956,163.71 401 9230002-Out Sery Empl-Energy DeVTUFCO 4,934,615.56 402 9240002-Property Ins- Energy Del 416,427.40 403 9250002-Injuries&Damages Ins-Enrgy Del 811,409.73 404 9260000-Employee Pensions & Benefits 1,132,442.84 405 9260002-Empl Pension&Benefit-Enrgy Del 482,803.28 406 9280000-Regulatory Commission Expense 1,022,858.57 407 9302000-Misc General Expenses 443,554.65 408 9310000-Rents-Administrative&General 346,708.15 409 9320000-Maintenance Of General Plant 140.22 410 OPERATING EXPENSES $ 95,228,921.69 411 4190100-Interest& Dividend Inc-Misc 73,903.23 412 4190200-Interest Income-Associated Cos 7,036,146.16 413 4201000-AFUDC-Equity(N) 92,431.74 414 4210300-Other Misc Nonoperating Income 4,300.00 415 4220100-Disposition Of Proprty-Gain(N) 3,769,101.83 416 4250100-Misc Amortization (222,070.00) 417 4264500-Lobbying-Other-Non Operating - 418 4264600-Lobbying - PAC- Non Operating (9,703.26) 419 OTHER INCOME AND DEDUCTIONS $ 10,744,109.70 420 4202000-AFUDC-Debt(N) (216,324.23) 421 4300000-Interest On Debt To Assoc Cos 22,497,761.43 422 4310100-Other Interest Expense (27,419.13) 423 4322000-Capitalized Interest - 424 INTEREST $ 22,254,018.07 425 4091000-Current FIT- Util Oper Income (1,282,469.53) L. 426 4092000-Current FIT-Other Income 3,841,973.86 427 4101000-Def FIT- Utility Oper Income 17,743,617.09 428 4111000-Def FIT- Utility Oper Income (12,635,057.18) 429 4114000-Investment Tax Credit (27,362.21) 430 INCOME TAXES $ 7,640,702.03 Schedule H-2 (P) Page 11 of 11 TXU GAS—PIPELINE TRIAL BALANCE FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: R. K. PRUETT Line Twelve Months Ended No Account- Description December 31,2002 (a) (b) 431 DISCONTINUED OPS $ - 432 EXTRAORDINARY ITEMS $ - 433 434 NET INCOME BEFORE EQUITY EARNINGS $ 14,166,692.69 435 436 EQUITY EARNINGS - 437 438 NET INCOME $ 14,166,692.69 439 440 4370001-Allocated Preferred Stock 1,785,850.00 441 RETAINED EARNINGS $ 1,785,850.00 442 443 TOTAL DEBITS& CREDITS $ 0.00 C L Schedule I(P) Page 1 of 1 TXU GAS—PIPELINE (ibir, SUMMARY OF RETURN FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: B.H.FAIRCHILD Line Present Proposed Schedule No. Description Rates Rates Reference (a) (b) (c) (d) 1 Net Operating Income/Return 2 3 Cost of Debt 6.71% $ 11.022,418 $ 11,022,418 4 Cost of Preferred Stock 5.53% 195,930 195,930 5 Available or Required Return on 6 Book Value of Common Equity 13,375,026 17,742,610 7 8 Total Return on Invested Capital $ 24,593,374 $ 28,960.958 A-1(P) 9 10 Rate Base-Capitalization Structure 11 12 Debt 51.00% $ 164,268,518 $ 164,268.518 13 Preferred Stock 1.10% 3,543,046 3,543,046 14 Common Equity at Book Value 47.90% 154,283.569 154.283,569 15 16 Total Invested Capital $ 322.095,133 $ 322,095,133 B(P) 17 18 Percent Return-After Tax 19 20 Cost of Debt 6.71% 6.71% 21 Cost of Preferred Stock 5.53% 5.53% 22 Return on Book Value of Common Equity 8.67% 11.50% 23 24 Percent Return-After Tax 7.64% 8.99% CL �o _ Cr) 0) O CO N 0 v N 0 CO CO 0 er et CO N CO CO .- 0 CO CON CD CS) � 0 N v of N f` CO O � O) � N 0 f` O O w .- O CO It) CO CO O) .- CO N O CO . u O f` O COCo Q) tt) CO N CA CO CO O) L -8 d 2 NCO_ O Co Cr) If) C') Is. 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BK RK $$$§4 ,-k 4 4§ | § kk 2 � z i 11 §§ ���ER §k § K§ § § §k I2 § ,......... ■;�2;■■;■■R;■Rg■■R,■e SCHEDULE L-1 (P) PAGE 1 OF 2 Cof TXU LONE STAR PIPELINE PIPELINE CITY GATE RATE DESIGN FOR THE TEST YEAR ENDED DECEMBER 31,2002 SPONSOR: G.L.GOBLE --- Pipeline City Gate Revenue Requirement Line Description Bulk Transmission Network Transmission Total 1 Cost of Service Requirements $17,404,334 $58,668.972 $76,073,306 2 Proposed Meter Charge Revenue 112,800 1,742,400 1,855,200 3 Proposed Capacity Charge Revenue 443,991 28.884,177 29,328,168 4 Revenue Required from Commodity Charge $16,847,543 $28,042,394 $44,889,938 5 6 7 -- Pipeline City Gate Billing Determinants --- 8 Bulk Transmission Network Transmission Total 9 Year End Meters X 12 Months 564 8,712 9,276 10 Billing MDU 1,638,343 27,759,901 29,398,245 11 Quantity Transported(MMBtu)-First Block 12,066,683 201,331,626 213,398,310 12 Quantity Transported(MMBtu)-Second Block 0 0 0 13 Total Quantity Transported(MMBtu) 12,066,683 201,331,626 213,398,310 14 15 16 MDU Capacity Charge Formulation --- 17 Bulk Transmission Network Transmission 18 Proposed Capacity Cost Recovery $7,943,734 $21,384,455 19 Bulk Billing MDU 1,638,343 27,759,901 20 Supply Billing MDU - 24,988,045 21 Network Billing MDU 25,095,845 22 Interim Capacity Rate $0.2702 $0.4270 23 Bulk Cost Recovery $442,699 $7,501,035 24 SupplyCost Recovery - 10,669,214 25 Network Cost Recovery 10,715,241 26 Capacity Cost Recovery Requirements $442,699 $28,885,490 (INF 27 MDU Capacity Charge $0.2702 $1.0405 28 29 30 ------ Commodity Charge Formulation ----- 31 Bulk Transmission Network Transmission 32 Proposed Commodity Cost Recovery $16,844,738 $28,045,180 33 Less: Revenue Recovery in Second Block 0 0 34 Equals: Commodity Revenue Requirement in First Block $16,844,738 $28,045,180 35 Bulk MMBtu-First Block 12,066,683 201,331,626 36 Supply MMBtu-First Block - 183,272,141 37 Network MMBtu-First Block - 178,305,988 38 Interim Commodity Rate $0.0789 $0.0776 39 Bulk Cost Recovery $952,492 $15,892,246 40 Supply Cost Recovery - 14,215,185 41 Network Cost Recovery - 13,829.994 42 Commodity Cost Recovery Requirements $952,492 $43,937,426 43 MMBtu Commodity Charge-First Block $0.0789 $0.2182 44 45 46 — Pipeline Transportation Proposed Rate --- 47 Bulk Transmission Network Transmission 48 Proposed Meter Charge $200.00 $200.00 49 Proposed Capacity Charge $0.2710 $1.0405 50 Proposed Commodity Charge-First Block $0.0795 $0.2182 51 Proposed Commodity Charge-Second Block $0.0000 $0.0000 52 53 54 ----- Pipeline City Gate Proposed Revenue ---- 55 Bulk Transmission Network Transmission Total 56 Proposed Meter Charge Revenue $112,800 $1,742,400 $1,855,200 57 Proposed Capacity Charge Revenue 443,991 28,884,177 29,328,168 58 Proposed Commodity Charge Revenue-First Block 959,301 43,930,561 44,889,862 59 Proposed Commodity Charge Revenue-Second Block 0 0 0 60 Proposed Total Revenue from City Gate $1,516,092 $74,557,138 $76,073,231 61 62 Average Total Revenue per MMBtu $0.1256 $0.3703 SCHEDULE L-1 (P) PAGE 2 OF 2 (kW TXU LONE STAR PIPELINE PIPELINE TRANSPORTATION RATE DESIGN FOR THE TEST YEAR ENDED DECEMBER 31,2002 . SPONSOR: G.L.GOBLE ---- Pipeline Transportation Revenue Requirement Line Description Bulk Transmission Network Transmission Total 1 Cost of Service Requirements $12,405,295 $13,150,791 $25,556,087 2 Proposed Meter Charge Revenue 88.800 417.600 506.400 3 Proposed Capacity Charge Revenue 1,871,524 8,572.143 10.443,667 4 Revenue Required from Commodity Charge $10,444,972 $4,161,048 $14,606,019 5 6 7 -- Pipeline Transportation Billing Determinants --- 8 Bulk Transmission Network Transmission Total 9 Year End Meters X 12 Months 444 2,088 2,532 10 Billing MDU 4,786,506 9,358,235 14,144,741 11 Quantity Transported(MMBtu)-First Block 41,247,190 78,057,330 119,304,520 12 Quantity Transported(MMBtu)-Second Block 17,794,272 26,023,822 43,818,093 13 Total Quantity Transported(MMBtu) 59,041,462 104,081,151 163,122,613 14 15 16 MDU Capacity Charge Formulation ----- 17 Bulk Transmission Network Transmission 18 Proposed Capacity Cost Recovery $5,540,631 $4,906,230 19 Bulk Billing MDU 4,786,506 9,358,235 20 Supply Billing MDU - 6,929,132 21 Network Billing MDU 9,114,697 22 Interim Capacity Rate $0.3917 $0.3058 23 Bulk Cost Recovery $1,874,920 $3,665,710 24 Supply Cost Recovery - 2,118,940 25 Network Cost Recovery 2,787,290 26 Capacity Cost Recovery Requirements $1,874,920 $8,571,940 (IW 27 MDU Capacity Charge $0.3917 $0.9160 28 29 30 - Commodity Charge Formulation --- 31 Bulk Transmission Network Transmission 32 Proposed Commodity Cost Recovery $10,434,468 $4,168,359 33 Less: Revenue Recovery in Second Block 1,245.599 2,081,906 34 Equals: Commodity Revenue Requirement in First Block $9,188,869 $2,086,453 35 Bulk mmBtu-First Block 41,247,190 78,057,330 36 Supply mmBtu-First Block - 59,574,249 37 Network mmBtu-First Block - 75,720,482 38 Interim Commodity Rate $0.0770 $0.0154 39 Bulk Cost Recovery $3,176,871 $6,011,998 40 Supply Cost Recovery - 918,727 41 Network Cost Recovery - 1,167,726 42 Commodity Cost Recovery Requirements $3,176,871 $8,098,451 43 mmBtu Commodity Charge-First Block $0.0770 $0.1038 44 45 46 — Pipeline Transportation Proposed Rate -- 47 Bulk Transmission Network Transmission 48 Proposed Meter Charge $200.00 $200.00 49 Proposed Capacity Charge $0.3910 $0.9160 50 Proposed Commodity Charge-First Block $0.0770 $0.1038 51 Proposed Commodity Charge-Second Block $0.0700 $0.0800 52 53 54 ---- Pipeline Transportation Proposed Revenue ----- 55 Bulk Transmission Network Transmission Total 56 Proposed Meter Charge Revenue $88,800 $417,600 $506,400 57 Proposed Capacity Charge Revenue 1,871,524 8,572,143 10,443,667 58 Proposed Commodity Charge Revenue-First Block 3,176.034 8,102,351 11,278,384 59 Proposed Commodity Charge Revenue-Second Block 1,245.599 2,081,906 3,327,505 60 Proposed Total Revenue from Transportation $6,381,957 $19,174,000 $25,555,956 61 (kW 62 Average Total Revenue per mmBtu $0.1081 $0.1842 $0.1567