Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 08/01/2009, Docket: RP09-723-000, Status: Effective

Second Revised Sheet No. 95 Second Revised Sheet No. 95

Superseding: Sub First Revised Sheet No. 95

. GENERAL TERMS AND CONDITIONS .

(Continued)

5. INVOICING AND PAYMENT (Continued)

5.5 Failure to Pay Invoices. (Continued)

In such event, Transporter may demand and Shipper, within thirty

(30) days of such demand, will furnish good and sufficient surety

bond, guaranteeing payment to Transporter of all disputed amounts

for any invoices that are or will be affected by such dispute. If

Shipper fails to provide a bond to Transporter guaranteeing

payment, or if Shipper defaults in the conditions of such bond,

then Transporter will have the right, after any necessary

application to and authorization by the FERC, to terminate the

Transportation Service Agreement. NAESB WGQ 2.3.26: "The time

limitation for disputes of allocations should be 6 months from the

date of the initial month-end allocation with a 3-month rebuttal

period. This standard shall not apply in the case of deliberate

omission or misrepresentation or mutual mistake of fact. Parties'

other statutory or contractual rights shall not otherwise be

diminished by this standard."

5.6 Disputed Invoices. NAESB WGQ 3.3.19: "If invoice is in dispute,

pay portion not in dispute and provide documentation identifying

basis for the dispute."

5.7 Right to Set Off Unpaid Amounts. In the event that Shipper does

not pay the full amount due Transporter in accordance with Section

5.3 hereof, Transporter, without prejudice to any other rights or

remedies it may have, will have the right to withhold and set off

payment of any amounts of monies due or owing by Transporter to

Shipper, whether in connection with this Agreement or otherwise,

against any and all amounts or monies due or owing by Shipper to

Transporter for services performed under the Transportation

Service Agreement.

5.8 Right to Recover Collection Costs. Transporter is entitled to

recover and may recover only from a defaulting party any

reasonable expenses, costs or attorneys' fees incurred to recover

amounts owed by such defaulting party pursuant to a rate schedule,

service agreement, the General Terms and Conditions of this

tariff, or for transportation services rendered by Transporter.