Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 02/01/2006, Docket: RP06-160-000, Status: Effective

Fourth Revised Sheet No. 17 Fourth Revised Sheet No. 17 : Effective

Superseding: Third Revised Sheet No. 17

RATE SCHEDULE KRF-1

KERN RIVER FIRM TRANSPORTATION SERVICES

(Continued)

5. RATES AND CHARGES (Continued)

5.7 Incidental Charges. Where applicable, Transporter will charge

Shipper an amount to reimburse Transporter for 100% for any

facilities, filing costs or similar fees which have not been

previously paid by Shipper which Transporter incurs in

establishing or rendering service. If service requires

construction of new delivery facilities, Transporter may collect a

contribution in aid of construction or incremental facility charge

as provided in Section 20 of the General Terms and Conditions.

5.8 Imbalance Charge and Scheduling Penalty. Transporter will charge

Shipper an Imbalance Charge and Scheduling Penalty as provided in

Section 10 of the General Terms and Conditions.

5.9 Discounted Rates.

(a) Transporter reserves the right to discount at any time the

Recourse Rates for any individual Shipper under any service

agreement without discounting any other Recourse Rates for

that or any other Shipper; provided, however, that such

discounted Recourse Rates will not be less than any

applicable Minimum Rates set forth on Sheet Nos. 5 and 5-A

of Transporter's effective tariff, or any superseding

tariff.

(1) Such discounted Recourse Rates may apply to specific

quantities of Gas (such as quantities above or below a

certain level or all quantities if quantities exceed a

certain level), quantities of Gas transported during

specific time periods, and quantities of Gas

transported from specific receipt points and/or to

specific delivery points, or within other defined

geographical areas.

(2) Discounted Rates also may be calculated using a

formula based on index prices for specific receipt

and/or delivery points or other agreed-upon published

pricing reference points. Index-based, discounted

rates will be no lower than the Minimum and no higher

than the Maximum Base Tariff Reservation/ Demand Rates

set forth on Sheet Nos. 5 and 5-A of Transporter's

Tariff.

(3) If Transporter discounts any Recourse Rates to any

Shipper, Transporter will post such transaction on its

designated site on the Internet, pursuant to Section

284.12 of the Commission's regulations.