Walton EMC Natural Gas Disclosure Statement Page 2 of 5

Most of the natural gas that we use in our homes and businesses comes from natural gas wells through interstate pipelines to the Atlanta Gas Light Company (AGLC) distribution system and on to your home or business. Within the distribution system, AGLC takes care of the pipes and meters and keeps the system safe. A gas marketer takes care of purchasing the gas, arranging the transportation to and through the AGLC system, and most importantly, the customer service to you the customer. Expenses are incurred that are recovered in the form of charges to you the customer. Charges normally include:

Commodity Price – the cost of the natural gas including contract costs and the cost of financial hedges to reduce price volatility. Natural gas is measured in volume, usually in units of one hundred cubic feet (CCF). It is usually sold by units of potential heat called Therms. One therm contains 100,000 BTUs of energy. A conversion factor (multiplier) is used to convert CCFs to BTUs.

Interstate Capacity Charge – the cost of having and using the pipeline capacity in transporting the gas from the wellhead to

the AGLC system, including building and maintaining the pipes and providing associated storage along the way AGLC Base Charges – the cost of AGLC delivering the natural gas from the end of the pipeline to your home or business.

Base rates are unique to each home or business and vary from month to month. This charge includes, but is not limited to intrastate delivery, AGLC meter reading, base customer charge, peaking charges, and Commission approved riders.

The Georgia Public Service Commission regulates the AGLC Base Charge. The AGLC Base Charge for any particular customer should be the same regardless of which marketer is providing the commodity and customer services. More information on this Base Charge can be found at www.aglc.com under “Guide to Charges: Calculate Your Rate”

Customer Service Charges – the cost of the marketer providing customer service including call centers, billing, remittance

processing and collections. Other Charges – these might be additional AGLC Charges or marketer charges and could include late fees, collection fees,

charges for turn-on or turn-off, and charges for other AGLC provided Services. Taxes – state and local taxes are not listed in published price comparisons because they vary by county, but they will be

included on your bill.

In most cases the commodity charge and the interstate pipeline charge are incorporated into a single price of gas on a per unit (Therm) basis. Some charges from the pipelines and parts of AGLC’s Base Charge are based on an estimation of the customer’s demand on the system on the coldest day of the year. A Dedicated Design Day Capacity (DDDC) has been determined by AGLC for each home and business. The DDDC factor is recalculated by AGLC each year and should appear on each of your monthly natural gas bills. Walton EMC Natural Gas may be offering both variable and fixed rate plans. In both plans the price per Therm of the natural gas includes both the Commodity Charge and the Interstate Capacity Charge but not the Walton EMC Natural Gas Customer Service Charge nor any AGLC charges. Variable Rate Plans On the variable rate plan the price per Therm of natural gas will change from month to month. The monthly price will be set for the first of each month and continue in effect for that month based on the market cost of natural gas, the cost of buying the gas and the transportation and storage costs. Your bill will be based on our published price of gas on the beginning day of your billing cycle which is the starting meter reading date. The advertised and listed price per Therm will include both Commodity Charges and Interstate Capacity Charges. The price will not include state and local taxes, AGLC Charges or Walton EMC Natural Gas’s Customer Service Charge. Your actual bill will vary based on the amount of gas used and the price per Therm during that monthly cycle. The AGLC Base Charge will also vary from month to month. Fixed Rate Plans A fixed rate plan sets the price per Therm at the time of the agreement and it will not change for an agreed upon period of time, usually twelve (12) billing cycles. The price per Therm is based on the market cost of natural gas, the cost of buying the gas, and the transportation and storage costs. In addition a fixed rate price may include the costs of various contracts as well as financial hedges to reduce the impact of price volatility in the market. The advertised and listed price per Therm will include both Commodity Charges and Interstate Capacity Charges. The price will not include state and local taxes, AGLC Charges or Walton EMC Natural Gas’s Customer Service Charge. An early termination fee will be charged if a customer exits a fixed price plan prior to the expiration of the plan. The fee will not be charged if the customer relocates or switches for the first time to the regulated provider. Your actual bill will vary based on the amount of gas used during that monthly cycle. The price per Therm will remain the same during the term of the agreement. The AGLC Base Charge also typically varies from month to month.

Walton EMC Natural Gas Disclosure Statement Page 3 of 5

Credit Worthiness and Deposits Walton EMC Natural Gas may establish and from time to time change, a minimum credit worthiness standard for signing up for service. Further, a credit rating score will be used to determine the need for a security deposit. Residential security deposits will not exceed $150.00 and will be kept in an interest bearing escrow account. A deposit may be required from existing customers if during a two-year period ending with the current month, the customer has had service disconnected for nonpayment or has had three or more delinquent payments during such two-year period. Residential deposits will be returned to customers maintaining six months good payment records and when service is terminated for whatever reason. Billing All consumers shall be billed monthly. Statements will be prepared and mailed as soon as possible after the reading of the customer’s meter. Walton EMC Natural Gas will depend on AGLC for meter reading services. Your billing cycle will be determined by when AGLC reads your meter. You will only receive an “estimated” bill when the required meter reading information has not been received in time to meet the billing cycle. You will not receive an “estimated” bill for more than two consecutive months. Walton EMC’s electric customers may choose to have their natural gas charges included on and billed with their Walton EMC electric bill. In this case, the billing date for natural gas and electricity may be up to, but not more than, thirty (30) days after the gas meter is read. AGLC imposes Base Charges on a monthly calendar basis and reads meters on a floating monthly meter reading cycle. AGLC Base Charges are passed through without modification to all customers who are Walton EMC Natural Gas customers as of 3AM on the 20th of the previous month (at the time AGLC determines market share). For customers that switch marketers the switch becomes effective on the first of a month. AGLC will read the meter on the next cycle and then determines what the reading should have been on the first of the month when the switch was effective. This reading is the new marketer’s starting meter reading. Because of the delay in receiving a starting meter reading from AGLC the first month’s bill from Walton EMC Natural Gas will most likely include only AGLC Base Charge and Walton EMC Natural Gas’s Customer Service Charge. It likely will not contain any charges for gas usage (Commodity Charge). The second month’s bill will contain the gas usage from the starting reading on the first day of the first month of service until the meter reading in the second month of service. Bills are due twenty-one (21) days from the date they are sent, provided such due date is a normal workday for Walton EMC Natural Gas. If it is not, then the bill shall be considered due on the next regular day of work. A customer may be offered the option with Walton EMC Natural Gas's approval to use a payment method that has the effect of a Levelized Bill. A security deposit may be required based on the customer's past payment history. The total deposit required of a residential customer will not exceed $150. Details of this billing method are available upon request. More information on Billing is available in our Terms of Service available online at www.waltonemcgas.com or by request to any of our offices. See the last page for information on how to contact us. Payment Options Customers may pay their bills in a variety of ways including:

Online: at www.waltonemcgas.com using a credit card or e-check. By telephone using a credit card or e-check. By bank draft or credit card draft By mail using a check or money order, or In person using cash, checks, credit cards or money orders at any of the Walton EMC offices in Snellville, Monroe or Watkinsville or at several local banks. Contact us for a complete list.

Walton EMC also accepts payments from assistance programs such as LIHEAP, DFACS, Salvation Army’s Project Share and others. Contact us for a list of available programs and their phone numbers. Penalty Fees Accounts that remain unpaid as of the due date will have a late fee of $10.00 or 1.5% of the past due balance, whichever is greater, added to the account balance. Late fees will not be assessed on past due amounts less than $30.00. Returned check fee is $30.00. Accounts that are disconnected due to non-payment will have a reconnection fee of $45.00 added to the bill, of which, $25 is charged by AGLC and $20 is charged by Walton EMC.

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Collection Procedures Walton EMC Natural Gas bills are due twenty-one (21) days after they are sent. After forty-five (45) days a request for disconnection for non-payment may be issued to AGLC. Walton EMC Natural Gas will attempt to collect past due amounts include sending a delinquent notice indicating a potential disconnect date at least fifteen (15) days before any request for disconnection and by attempting to make personal contact at least two (2) days prior to requesting disconnection. Reconnect Procedures The actual reconnection of disconnected meters is solely the responsibility of AGLC. Walton EMC Natural Gas will notify AGLC when payments have been made to reconnect the service. Such notice will usually be transmitted to AGLC the same day as the payment is posted, but in any case, not later than the next business. Walton EMC Natural Gas is not responsible for nor can it control the length of time AGLC takes to reconnect the meter. Contacting Others You have the right, if you are not satisfied with Walton EMC Natural Gas’s response to your complaint or dispute, to contact the following agencies: Georgia Public Service Commission 244 Washington Street, SW Atlanta, GA 30334 404-656-4501 Out of the Atlanta area – 800-282-5813 Fax = 404-656-2341 Consumers’ Utility Counsel Division of the Governor’s Office of Consumer Affairs 2 Martin Luther King, Jr. Drive Suite 356, East Tower Atlanta, GA 30308 404-651-8600 Out of the Atlanta area –800-869-1123 www2.state.ga.us/GaOCA/cuc.htm Heating Assistance Programs Georgia Department of Human Resources Community Services Section, Energy Assistance Program Two Peachtree St., NW; 19th Floor, Room 252 Atlanta, GA 30303-3142 404-657-9109 404-657-3377 Additional information for your protection A consumer shall have a three-day right of rescission following the receipt of this disclosure at the time of initiating service or when informed of a change in terms or conditions. You, the consumer, may cancel in writing or electronically by contacting the marketer. If you have a fixed term agreement with us and it is approaching the expiration date, or whenever we propose to change our terms of service in any type of agreement, you will receive written notification from us prior to the date of expiration of or change to the agreement. We will explain your options to you in this advanced notification. Deposits shall not exceed $150.00 for any consumer who primarily uses gas for personal family or household purposes. Deposits shall not exceed twenty (20) percent of the consumer’s annual estimated bill for any non-residential firm retail customer who meets the definition under Commission rule 515-7-9-.01(l). Walton EMC Natural Gas will not charge an early termination fee if the customer is a low-income residential consumer seeking service for the first time from the regulated provider. Walton EMC Natural Gas will not send estimated bills, except when the actual meter readings are not made available, and in that event, such estimated bills will be limited to no more than two consecutive months. Gas service will be disconnected for failure to pay for service to the marketer, only if the marketer is the current marketer, and it has been at least fifteen (15) days since the consumer was notified that service would be disconnected. Before a request is made to AGLC to disconnect gas service for failure to pay, Walton EMC Natural Gas must offer at least one reasonable pay arrangement in writing. Gas service will not be disconnected for nonpayment of a bill that was not sent to the consumer in a timely manner.

Walton EMC Natural Gas Disclosure Statement Page 5 of 5

Walton EMC Natural Gas will not prevent a consumer from obtaining distribution and commodity sales service from another marketer or provider. Contacting Walton EMC Natural Gas You can contact Walton EMC Natural Gas for any reason by all of the following ways: By mail : Walton EMC Natural Gas P.O. Box 260 Monroe, GA 30655-0260 By phone: 770-267-2505 Outside the Atlanta Area – toll-free 866-WEMCGAS (866-936-2427) By fax: 770-266-7565 attention Gas Service Online: www.waltonemcgas.com Custserv@waltonemcgas.com In person: Monroe Snellville Watkinsville 842 Hwy. 78 NW 3645 Lenora Church Rd. 2061-D Hog Mt. Rd. Monroe, GA Snellville, GA Watkinsville, GA