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

First Revised Sheet No. 69-D First Revised Sheet No. 69-D : Effective

Superseding: Original Sheet No. 69-D

RATE SCHEDULE PAL

PARK AND LOAN SERVICES

(Continued)

2. APPLICABILITY Continued)

(c) Shipper will repay loaned Gas to the PAL Point by nominating

a Quantity, up to the total Quantity of Gas loaned, plus

fuel, for delivery to the PAL Point under a Transportation

Service Agreement.

(d) If Transporter is unable to schedule nominated Quantities of

Gas for delivery to Shipper's loaned Gas account in

accordance with the planned repayment schedule, Transporter

and Shipper will mutually agree to a revised repayment

schedule for the nominated Quantities.

3. RATE

3.1 The minimum and maximum rates for PAL service are set forth on

Sheet No. 8, the Statement of Rates. Unless Transporter and

Shipper agree otherwise, Shipper will pay the maximum rate.

Transporter reserves the right to discount at any time the rate

for any Shipper without discounting rates for other shippers.

Such discounts may apply to a specific Quantity of Gas, a certain

level or all Quantities if Quantities exceed a certain level,

Quantities of Gas parked or loaned during specific time periods,

or Quantities of Gas transported to the PAL Point from specific

receipt points and/or from the PAL Point to specific delivery

points. A PAL charge will apply only to the Quantity of Gas parked

and/or loaned on days when that Quantity of Gas is not transported

to or from the PAL Point.

3.2 Each month when PAL service is provided, Shipper will pay

Transporter a total amount equal to the sum of the daily products

of (1) the PAL Rate and (2) the Quantity of Gas parked or loaned

each day, as applicable.

3.3 ACA surcharges do not apply to service under this rate schedule.

4. SERVICE RESTRICTIONS

4.1 Regardless of the withdrawal or repayment schedule agreed to by

Transporter and Shipper, a Shipper may be required to withdraw

some or all of the parked Quantity or repay some or all of the

loaned Quantity on 24 hours' notice if Transporter, in its

reasonable judgment, determines that such action is necessary to

protect its system operations or to accommodate system balancing

requirements for firm or interruptible transportation services.

Transporter will notify Shipper of any such requirements by

telephone and also by either facsimile, e-mail, or posting on

Transporter's Designated Site. Transporter's notification will

indicate the parked Quantities to be withdrawn by Shipper and/or

the loaned Quantities to be repaid to Transporter, depending on

operating conditions.