November 6, 2003

Natural Gas Price Hike Hits Home Area Hardest

To reflect estimated changes in the cost of natural gas for the winter season as well as changes to the Companyís Actual Cost Adjustment (ACA) factor, Hannibal/Canton District natural gas customers of Atmos Energy Corporation will experience an increase in natural gas rates under a scheduled winter season filing reviewed and accepted by the Missouri Public Service Commission. This rate change, which will take effect on November 1, is interim subject to refund.

The ACA is a mechanism that tracks actual natural gas costs over a 12-month period. It ensures that what the natural gas company pays to its suppliers for natural gas is in fact what it recoups in rates from its customers. The ACA makes adjustments to rates if any over or under collections of natural gas costs occurred over the last 12-month period.

In the Hannibal/Canton District of ATMOS, a residential customer currently pays $0.7500 per Ccf (100 cubic feet of gas). Under this filing, the rate will increase to $0.8081 per Ccf, an increase of approximately 5.8 cents per Ccf. The effect on a typical residential heating customer for the winter season (November through March) is an increase of approximately $52 when compared to rates currently in effect.

The 5,900 customers in the Kirksville District of ATMOS received a 4.8-cent price hike to 77 cents per Ccf. The Butler District went up just 2.8 cents to 71 cents per Ccf. The Southeast Missouri District actually dropped 4.6 cents to 75 cents per Ccf and will mean an average savings of $41 for the more than 30,000 customers in the Cape Girardeua area.

Approximately 65% to 80% of a customerís natural gas bill reflects the cost of natural gas from wholesale suppliers. The wholesale cost of natural gas (the cost your local natural gas company must pay to its suppliers for natural gas) is not regulated by the Missouri Public Service Commission.

The wellhead cost of natural gas is unregulated and is primarily driven by supply and demand. The Missouri Public Service Commission does conduct an annual regulatory review to ensure that regulated gas companies make prudent decisions in securing natural gas supplies for their customers.

Atmos Energy Corporation serves approximately 12,150 customers in its Hannibal/Canton District which includes the counties of Scotland, Clark, Knox, Lewis, Marion, & Ralls.

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