Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 09/01/2002, Docket: RP02-392-000, Status: Effective

Original Sheet No. 28 Original Sheet No. 28 : Effective

RATE SCHEDULE KRF-L1

HIGH DESERT LATERAL FIRM TRANSPORTATION SERVICES

(Continued)

3. QUALIFICATION FOR SERVICE (Continued)

3.2 Transporter will not be required to perform or to continue service

under this rate schedule on behalf of any Shipper who is or has

become insolvent or who, at Transporter's request, fails within a

reasonable period to demonstrate creditworthiness. Transporter

will seek appropriate FERC authorization, if necessary, prior to

termination of service when the Shipper, its Guarantor or any

parent entity fails to maintain creditworthiness or becomes

insolvent. For purposes herein, the insolvency of a Shipper will

be evidenced by the filing by or against any Shipper or Guarantor

(hereinafter collectively referred to as "the Shipper") of a

petition in bankruptcy or the entry of a decree or order by a

court having jurisdiction in the premises adjudging the Shipper

bankrupt or insolvent, or approving, as properly filed, a petition

seeking reorganization, arrangement, adjustment or composition of

or in respect of the Shipper under the Federal Bankruptcy Act or

any other applicable federal or state law, or appointing a

receiver, liquidator, assignee, trustee, sequestrator, (or other

similar official) of the Shipper or of any substantial part of its

property, or the ordering of the winding-up or liquidation of its

affairs, with said order or decree continuing unstayed and in

effect for a period of sixty (60) consecutive Days.

3.3 If Transporter cannot satisfy a request due to insufficient

capacity, such request will not be of a continuing nature but

rather will remain valid only until the date Transporter notifies

Shipper of insufficient capacity and will thereafter be deemed a

nullity for all purposes.

3.4 A Transportation Service Agreement (Sheet No. 326) will be

executed by Shipper and Transporter following Transporter's

approval in writing or electronically through Transporter's

Designated Site of Shipper's request for service and prior to

commencement of service. In the event the Transportation Service

Agreement is not executed and returned by Shipper at least 24

hours prior to the effective date of the Transportation Service

Agreement, Transporter may consider the request for service

invalid.