Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 07/01/2000, Docket: RP00-288-000, Status: Effective

Original Sheet No. 102 Original Sheet No. 102 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

9. STATUTORY REGULATION

Transporter's rates, charges, classifications and services as set forth

in this tariff, including these General Terms and Conditions are subject

to regulation by the FERC under the Natural Gas Act. Transporter will

have the right to file from time to time with the FERC under Section 4

of the Natural Gas Act and to place into effect such new Rate Schedules

and changes in its existing effective tariff as Transporter may find

necessary from time to time to assure Transporter just and reasonable

rates and charges as well as a rate of return sufficient, inter alia, to

service the debt, attract capital, permit facilities expansion and

provide adequate Natural Gas Transportation service to all of

Transporter's customers. Without in any way limiting the generality of

the foregoing, Transporter will have the right to file and to place into

effect new Rate Schedules and/or new tariff sheets fairly and

appropriately reflecting changes in the rates paid by Shipper for

Natural Gas Transportation services or changes in the conditions of

service attributable to such Transportation service. Shipper will have

the right to protest any such new Rate Schedules or changes in rates or

conditions of service before the FERC. Notwithstanding any other

provision hereof, these provisions are subject to all valid legislation

and all valid present or future orders, rules and regulations of duly

constituted authorities now or hereafter having jurisdiction.