Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 10/01/2003, Docket: RP00-337-007, Status: Effective

Sub Original Sheet No. 69-E Sub Original Sheet No. 69-E : Effective

RATE SCHEDULE PAL

PARK AND LOAN SERVICES

(Continued)

4. SERVICE RESTRICTIONS (Continued)

4.2 Except as provided in Section 4.4 below, if Shipper fails to

withdraw parked Quantities in accordance with the agreed upon

withdrawal schedule, or upon 24 hours' notice as provided in

Section 4.1 above (if applicable), Transporter has the right to

take title to that Quantity of Gas, free and clear of any adverse

claims and without reimbursement to Shipper. All Gas that becomes

the property of Transporter under this provision will be sold

pursuant to Section 28 of the General Terms and Conditions, and

proceeds will subject to revenue sharing as set forth therein.

4.3 Except as provided in Section 4.4 below, if Shipper fails to repay

loaned Quantities of Gas in accordance with the agreed upon

repayment schedule, or upon 24 hours' notice as provided in

Section 4.1 above (if applicable), Transporter will purchase

equivalent Quantities of Gas to restore its line pack, and Shipper

will be subject to a PAL penalty. The PAL penalty will be a charge

equal to the sum of 150% of the daily spot price for flowing Gas

for the day Gas is purchased, as reflected in Gas Daily for the

higher of SoCal Gas at Topock or Kern River at Opal, plus

Transporter's maximum interruptible transportation rate, times the

Quantity of Gas that is not repaid. Net PAL penalties (PAL

penalty minus the sum of the cost of purchased Gas and the

transportation rate) will be credited to other Shippers in

accordance with Section 10.11 of the General Terms and Conditions.

4.4 If, on any day, Shipper submits a valid nomination to withdraw

parked Gas or to repay loaned Gas and Transporter fails to accept

and schedule such nomination, then Section 4.2 or 4.3 (as

appropriate) will not apply for that day. A nomination is

considered valid for the purposes of this section when it contains

all required information, is submitted in accordance with the

NAESB nomination timelines set forth in Section 13.1 of this FERC

Gas Tariff, and the following conditions are met:

a. For withdrawal of parked Gas, the nominated Quantity has

been confirmed and scheduled by the Delivery Point operator;

or

b. For repayment of loaned Gas, the nominated Quantity has been

confirmed and scheduled by the Receipt Point operator.