WHEREAS, in an effort to simplify the rate structure for the Customers of the District per its gas rates for such items as PGA, Btu & MMBTu and,

            WHEREAS, the present rate structures of the District gas rates are not consistent in structure as the Main System (Clarke-Washington Service Area) does not have a tiered rate and the Orange Beach System does and,

            WHEREAS, upon review of the Districts rates by A.C.T. Energy Management,  Inc. there is no economic benefit to the district nor its customers in continuing the rate structure the District is presently operating under and,

            WHEREAS, the present practice of calculating rates based on heating value (Btu) to arrive at MMBtu's for customer billing can be changed by converting present adopted rates into a price per hundred cubic foot plus cost of gas rate with no substantive change to a customer's net gas bill, the Board hereby adopts and approves the rate structure change as set forth in this resolution.

            BE IT RESOLVED, that the district's rate tariffs for residential, commercial, special governmental and industrial classes, be revised as detailed herein, and,

            BE IT FURTHER RESOLVED, that the PGAF (Purchased Gas Adjustment Factor), be replaced by converting to a Cost of Gas Plus rate such that all rate codes will be calculated using the Weighted Average Cost of Gas (WACOG) to the District PLUS any net margin added by the District under current rates. The District will show the all in cost of gas per unit on customer bill monthly, and,

            BE IT FURTHER RESOLVED, that the all customer availability charges remain unchanged. 

            BE IT FURTHER RESOLVED, that the Rate Stabilization Adjustment Factor be reworded to provide a workable calculation as intended upon initial approval of the Board, and,

            BE IT FURTHER RESOLVED, that all charges, rates and fees not addressed under this Resolution remain as approved by Board.

CMC GAS MAIN SYSTEM 

RESIDENTIAL SERVICE

AVAILABILITY
Available to residential customers at locations on the District's gas distribution system where an adequate supply of gas currently exists.  Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable to permanent residential dwellings such as homes, apartments, manufactured (mobile) homes at locations on the District's gas distribution facilities.  Service under this schedule is limited to residential dwellings and may not be shared or resold. 

RATE
Availability charge                                                 $7.50 per month 

Gas Service (Consumption charge)                    WACOG + $0.515 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date.  Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees.  Past due accounts are subject to disconnection without further notice.                     

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law.  Franchise fees may also be added in municipal jurisdictions which levy franchise fees.

SMALL COMMERCIAL

AVAILABILITY
Available to non-residential customers at locations on the District's gas distribution system where an adequate supply of gas currently exists. Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable at locations on the District's existing gas distribution system to permanent non-residential buildings such as restaurants, service stations, beauty parlors, and other locations where the projected gas consumption does not exceed 50 MMBTU per month. Service under this schedule is limited to non-residential usage and shall not be combined, nor resold or shared with others, but service shall be for the exclusive use of the customer contracting for service under this rate schedule.

RATE
Availability charge                                                 $10.00 per month 

Gas Service (Consumption charge)                    WACOG + $0.515 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date. Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees. Past due accounts are subject to disconnection without further notice.

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law. Franchise fees may also be added in those municipal jurisdictions which levy franchise fees.

LARGE COMMERCIAL RATE

AVAILABILITY
Available to non-residential customers at locations on the District's gas distribution system where an adequate supply of gas currently exists. Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable at locations on the District's existing gas distribution system to permanent non-residential buildings such as restaurants, service stations, beauty parlors, and other locations where the projected gas consumption exceeds 50 MMBTU per month. Service under this schedule is limited to non-residential usage and shall not be combined, nor resold or shared with others, but service shall be for the exclusive use of the customer contracting for service under this rate schedule.

RATE
Availability charge                                                 $25.00 per month 

Gas Service (Consumption charge)                    WACOG + $0.515 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date. Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees. Past due accounts are subject to disconnection without further notice.

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law. Franchise fees may also be added in those municipal jurisdictions which levy franchise fees.

SPECIAL GOVERNMENTAL RAT

AVAILABILITY
Available to non-residential customers at locations on the District's gas distribution system where an adequate supply of gas currently exists. Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable at locations on the District's existing gas distribution system to local, state, and federal governmental agencies where the projected gas consumption exceeds 50 MMBTU per month. Service under this schedule is limited to non-residential usage and shall not be combined, nor resold or shared with others, but service shall be for the exclusive use of the customer contracting for service under this rate schedule.

RATE
Availability charge                                                 $25.00 per month 

Gas Service (Consumption charge)                    WACOG + $0.515 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date. Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees. Past due accounts are subject to disconnection without further notice.

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law. Franchise fees may also be added in those municipal jurisdictions which levy franchise fees.

INDUSTRIAL - SPECIAL FIXED RATE SCHEDULE

AVAILABILITY
Available to industrial customers at locations on the District's gas distribution system where an adequate supply of gas currently exists. Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable at locations on the District's existing gas distribution system to industrial customers whose operations are classified by SIC codes related to the timber industry. Service under this schedule is limited to industrial and manufacturing usage and shall not be combined, nor resold or shared with others, but service shall be for the exclusive use of the customer contracting for service under this rate schedule.

RATE
Availability charge                                                 $0.00 per month 

Gas Service (Consumption charge)                    WACOG + $0.106 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date. Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees. Past due accounts are subject to disconnection without further notice.

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law. Franchise fees may also be added in those municipal jurisdictions which levy franchise fees.

ORANGE BEACH SYSTEM

RESIDENTIAL SERVICE

AVAILABILITY
Available to residential customers at locations on the District's gas distribution system where an adequate supply of gas currently exists. Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable to permanent residential dwellings such as homes, apartments, manufactured (mobile) homes at locations on the District's gas distribution facilities. Service under this schedule is limited to residential dwellings and may not be shared or resold.

RATE
Availability charge                                                 $7.50 per month 

Gas Service (Consumption charge)                    WACOG + $0.6427 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date. Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees. Past due accounts are subject to disconnection without further notice.

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law. Franchise fees may also be added in those municipal jurisdictions which levy franchise fees.

SMALL COMMERCIAL

AVAILABILITY
Available to non-residential customers at locations on the District's gas distribution system where an adequate supply of gas currently exists. Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable at locations on the District's existing gas distribution system to permanent non-residential buildings such as restaurants, service stations, beauty parlors, and other locations where the projected gas consumption does not exceed 50 MMBTU per month. Service under this schedule is limited to non-residential usage and shall not be combined, nor resold or shared with others, but service shall be for the exclusive use of the customer contracting for service under this rate schedule.

RATE
Availability charge                                                 $25.00 per month 

Gas Service (Consumption charge)                    WACOG + $0.6261 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date. Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees. Past due accounts are subject to disconnection without further notice.

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law. Franchise fees may also be added in those municipal jurisdictions which levy franchise fees.

LARGE COMMERCIAL

AVAILABILITY
Available to non-residential customers at locations on the District's gas distribution system where an adequate supply of gas currently exists. Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable at locations on the District's existing gas distribution system to permanent non-residential buildings such as restaurants, service stations, beauty parlors, and other locations where the projected gas consumption exceeds 50 MMBTU per month. Service under this schedule is limited to non-residential usage and shall not be combined, nor resold or shared with others, but service shall be for the exclusive use of the customer contracting for service under this rate schedule.

RATE
Availability charge                                                 $50.00 per month 

Gas Service (Consumption charge)                    WACOG + $0.6094 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date. Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees. Past due accounts are subject to disconnection without further notice.

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law. Franchise fees may also be added in those municipal jurisdictions which levy franchise fees.

SPECIAL & WATER HEATING

AVAILABILITY
Available to non-residential customers at locations on the District's gas distribution system where an adequate supply of gas currently exists. Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable at locations on the District's existing gas distribution system to local, state, and federal governmental agencies where the projected gas consumption exceeds 50 MMBTU per month. Service under this schedule is limited to non-residential usage and shall not be combined, nor resold or shared with others, but service shall be for the exclusive use of the customer contracting for service under this rate schedule.

RATE
Availability charge                                                 $25.00 per month 

Gas Service (Consumption charge)                    WACOG + $0.5470 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date. Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees. Past due accounts are subject to disconnection without further notice.

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law. Franchise fees may also be added in those municipal jurisdictions which levy franchise fees.

AIR CONDITIONING

AVAILABILITY
Available to non-residential customers at locations on the District's gas distribution system where an adequate supply of gas currently exists. Service under this schedule is subject to curtailment in accordance with the District's most current curtailment plan.

APPLICABILITY
Applicable at locations on the District's existing gas distribution system to industrial customers whose operations are classified by SIC codes related to the timber industry. Service under this schedule is limited to industrial and manufacturing usage and shall not be combined, nor resold or shared with others, but service shall be for the exclusive use of the customer contracting for service under this rate schedule.

RATE
Availability charge                                                 $25.00 per month 

Gas Service (Consumption charge)                    WACOG + $0.5470 per Ccf (Hundred Cubic Feet)

PAYMENT
Bills for service rendered hereunder are due and payable upon receipt and considered past due after the delinquent date. Failure to pay a bill by the delinquent date will subject the customer to additional service charges and fees. Past due accounts are subject to disconnection without further notice.

TAX AND FRANCHISE FEE ADJUSTMENTS
Applicable state and local taxes will be added to the bill as prescribed by law. Franchise fees may also be added in those municipal jurisdictions which levy franchise fees.

RATE STABILIZATION ADJUSTMENT FACTOR (RSAF) CLAUSE

APPLICABILITY
The Rate Stabilization Adjustment Factor (RSAF) is applicable to and may be applied to the following rates including all Orange Beach System rates:
                                            Residential
                                            Small Commercial
                                            Large Commercial
                                            Special Governmental
                                            Industrial
                                            Industrial Special Fixed Rate

 CALCULATION
The RSAF shall be calculated quarterly based on the following formulations: 

Step 1. Calculate the variance between the actual reserve amounts as reported during quarterly review as compared to required reserve under all covenents which District are obligated to at time of audit 

Example:
Cash Available at time of review = $1,200,000.00 

Debt Covenant requirements = $1,250,000.00 

Financial review of cash reserves shows that District reserves do not meet debt coverage requirements under covenants by 50,000.00 

Step 2. Calculate the factor per Ccf by Dividing net shortfall by annual average throughput of all non-negotiated rate customers.

Example:
Shortfall = $50,000.00

Average Annual Sales Volumes per Applicable Rate Codes = 3,000,000 Ccf

RSAF = $50,000.00 ÷ 3,000,000 OR $0.0167 per Ccf 

Step 3  Beginning with the first billing cycle of the month following the Districts quarterly Financial report is completed and presented to Board, $0.0167 per Ccf would then be added to each hundred cubic foot of gas sold for a period of 12 months. There will be no over/under recovery calculations used for calculation.

ECONOMIC DEVELOPMENT RATE RIDER

APPLICABILITY
The Economic Development Rate Rider is applicable to and may be applied to the following rates:
                                            Small Commercial
                                            Large Commercial
                                            Governmental
                                            Industrial
                                            Industrial Special Fixed Rate 

CALCULATION
The Economic Development Rate Rider (EDRR) is calculated using the present-value (PV) of the projected five-year margins of any applicable commercial or industrial rate customer.  The amount of incentives or rate discounts that may be offered to any particular customer may not exceed one-fourth of this amount.  

CONTRACT TERM
The district may require a five-year contract, or a term commensurate with the period utilized in the PV calculations described above.  

Done this the __ day of Dec, 2006.

                                                                        __________________________________________

                                                                                        Sheldon Day, President
                                                                          CLARKE MOBILE COUNTIES GAS DISTRICT

ATTEST: 

    _______________________________

                   Vice President
CLARKE MOBILE COUNTIES GAS DISTRICT