Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 08/01/2004, Docket: RP04-339-000, Status: Effective

Second Revised Sheet No. 58 Second Revised Sheet No. 58 : Effective

Superseding: First Revised Sheet No. 58

RATE SCHEDULE KRI-1

KERN RIVER INTERRUPTIBLE TRANSPORTATION SERVICES

(Continued)

5. RATES AND CHARGES

5.1 Applicable Rates and Charges. The rates and charges for service

under this rate schedule will be the Transportation Charge, ACA

Surcharge, Incidental Charges, and any Imbalance Charge and/or

Scheduling Penalties, if applicable, all as specified in Sections

5.2, 5.3, 5.5 and 5.6 of this rate schedule.

5.2 Transportation Charge. An amount obtained by multiplying (a) the

Quantity of Gas in Dth received by Transporter from Shipper for

Transportation during the Month, exclusive of Quantities for fuel

used and lost and unaccounted-for gas, by (b) the Maximum

Interruptible Transportation Rate as shown on Sheet No. 6 of

Transporter's effective tariff. Transporter has the right to

negotiate the rate to a level not less than the Minimum

Interruptible Transportation Rate nor greater than the Maximum

Interruptible Transportation Rate, as shown on Sheet No. 6 of

Transporter's effective tariff.

5.3 ACA Surcharge. Amount obtained by multiplying (a) the Quantity of

Gas received by Transporter from Shipper for Transportation during

the Month, exclusive of Quantities for fuel used and lost and

unaccounted-for gas, by (b) the FERC Annual Charge Adjustment

(ACA) Surcharge as set forth on Sheet No. 6 of Transporter's

effective tariff, and/or any other such similar surcharges as may

be authorized in the future, to the extent such charges are

applicable to the service provided to Shipper.

5.4 Minimum Monthly Bill. None.

5.5 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. In addition, if service