Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Original Sheet No. 39 Original Sheet No. 39 : Effective

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RATE SCHEDULE KRF-L1

HIGH DESERT LATERAL FIRM TRANSPORTATION SERVICES

(Continued)

7. ESTABLISHMENT AND MAINTENANCE OF CREDIT (Continued)

7.2 Short Term. (Continued)

(3) to provide a security interest in collateral

provided by the Shipper found to be satisfactory

to Transporter; or

(4) to provide a guarantee by a person or another

entity which satisfies the credit appraisal.

Transporter's credit appraisal procedures involve the

establishment of dollar credit limits on a

standardized nondiscriminatory basis. To the extent

that a Shipper's accounts with Transporter do not

exceed such limit, no new credit appraisal will be

conducted when an existing contract is amended or a

request for a new contract is made; provided that the

Shipper's payment history with Transporter has been

satisfactory and there is no bona fide basis for

questioning a Shipper's creditworthiness.

8. GENERAL TERMS AND CONDITIONS

The General Terms and Conditions contained in this FERC Gas Tariff

are applicable to this rate schedule and are hereby made a part

hereof. Any terms and conditions contained in Shipper's executed

Transportation Service Agreement which are not inconsistent with

the terms and conditions of this rate schedule, including the

General Terms and Conditions contained in this FERC Gas Tariff,

will also be applicable to service provided under this rate

schedule. Shipper will provide Transporter with such information

as is needed to meet the requirements placed on Transporter by

regulation, rule, and/or order.