NOTICE FOR OBJECTIONS

APPLICATION NO. 1319201

TOWN OF HINTON

ATCO GAS AND PIPELINES LTD.

APPLICATION NO. 1319195

Take Notice that the Alberta Energy and Utilities Board (the EUB) may continue to process these applications without further notice if no bona fide objections are received on or before January 8, 2004.

Nature of the Application

An application has been filed with the EUB by the Town of Hinton (the Town) for approval to renew its natural gas distribution franchise agreement (the Agreement) with ATCO Gas and Pipelines Ltd. (ATCO Gas). The Agreement gives ATCO Gas the exclusive right to deliver natural gas to the residents of the Town for 10 years.

The Agreement has been based on a standard natural gas franchise agreement negotiated by the Alberta Urban Municipalities Association for use by all municipalities in the province. The standard natural gas franchise agreement has been reviewed by the EUB.

The terms of the Agreement have changed substantially from previously approved franchise agreements. Some of the noteworthy changes include a change in responsibility for utility relocation costs caused by municipal purposes, provision of extra services, options for purchase of the distribution system by the municipality, and provisions respecting third party use of the distribution system.

The Agreement also requires ATCO Gas to pay the Town property and linear taxes as well as a franchise fee for use of municipal rights of way. Previously ATCO Gas only paid a franchise fee in lieu of linear taxes. The current franchise fee is identified as the municipal franchise fee on customer billings. The revised franchise fee and the linear taxes paid to the Town would also be recovered as a separate utility charge on customer billings within the Town of Hinton. Between the years 1999 and 2002 the fee, on average, has accounted for about $45.08 of the yearly bill of an average residential sales customer, and in 2003 the fee will account for about $62.56 of the yearly bill.

The franchise fee provided in the proposed agreement would initially be set at 8 per cent of the non-gas components of customers' bills, which are the fixed charge and variable charge on residential bills. The change would also decrease the yearly billing of an average residential customer in the Town by about $26.68 from the amount paid in 2003. An average residential customer uses about 135 GJ annually. Customers should contact ATCO Gas if they would like more specific details regarding how this change will affect their bill.

The Agreement further allows the Town to increase the level of the franchise fee at its own discretion on an annual basis, without any further review by the EUB. However the Agreement does not allow the Town to impose a franchise fee above 35 per cent. Therefore, if the Town implemented the maximum franchise fee at current rates for distribution, yearly billings would increase by about $52.20 for an average residential customer in the Town.

ATCO Gas has applied to the EUB for approval to revise its rates so that the franchise fee and linear tax clauses included in the Agreement can be recovered from customers within the Town.

Additional Information

To obtain additional information or a copy of the applications, contact:

The Town of Hinton

2nd Floor, 131 Civic Centre Road

Hinton, Alberta  T7V 2E5

Attention:  Ms. Bernie Kreiner, Town Manager

Telephone:  (780) 865-6000,  Fax:  (780) 865-5706

                    - or -

ATCO Gas and Pipelines Ltd.

10035 - 105 Street

          Edmonton, Alberta  T5J 2V6

          Attention:  Mr. Charles Teeuwsen, Manager, Yellowhead Region

          Telephone:  (780) 420-8935,  Fax:  (780) 420-3839

For information about EUB procedures, contact:

Utilities Branch, EUB

Attention:  Maria Pohl

Telephone:  (780) 422-5211

Copies of the applications are available for viewing at the EUB's Edmonton office.

To File a Submission

If you have a bona fide interest and want to make a submission, intervention or objection please state in writing your reasons for objection to the applications. Send one copy of your objection to the Town at the address above. Send the original to the EUB to the attention of:

Maria Pohl, Utilities Branch

Alberta Energy and Utilities Board

10th Floor, 10055 - 106 Street

Edmonton, Alberta  T5J 2Y2

         Telephone (780) 422-5211,  Fax: (780) 427-6970

Issued at Calgary, Alberta on December 15, 2003.

ALBERTA ENERGY AND UTILITIES BOARD

Michael J. Bruni, Q.C., General Counsel