Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 05/01/2002, Docket: RP01-190-002, Status: Effective

First Revised Sheet No. 104 First Revised Sheet No. 104 : Effective

Superseding: Original Sheet No. 104

GENERAL TERMS AND CONDITIONS

(Continued)

10. OPERATING AND BALANCING PROCEDURES (Continued)

10.6 Balancing of Transportation Quantities.

(a) Uniform Receipts and Deliveries. Transporter and Shipper

will undertake to maintain receipts and deliveries on a

uniform hourly basis to the maximum extent practicable,

subject to the provisions of the General Terms and

Conditions of this tariff.

(b) Departures from Scheduled Receipts and Deliveries. Shipper

and Transporter will attempt to keep departures from

scheduled receipts and deliveries to a minimum and will

reconcile any imbalances, including required fuel for the

Month, within thirty (30) days. Any adjustment to receipts

and deliveries by Shipper, whether or not pursuant to

notification from Transporter, will be coordinated with

Transporter and accomplished in accordance with the

scheduling procedures set forth in Section 13.

If on any Day Shipper delivers to Transporter quantities at

the Receipt Point(s) which are in excess of or deficient by

the greater of 2,000 Dth or two (2) percent of the

quantities tendered for delivery to Shipper at the Delivery

Point(s), Shipper will initiate corrective action

immediately after notification by Transporter.

Shipper has requested and Transporter has scheduled to

deliver exceeds the Quantity delivered at the Delivery

Point(s) or the Quantity received at the Receipt Point(s) by

the greater of five percent or 2,000 Dth, then Shipper will

pay Transporter a penalty equal to the rate prescribed by

this paragraph times the amount by which the Quantity

scheduled for delivery, less the greater of five percent or

2,000 Dth exceeds the lesser of the Quantity delivered at

the Delivery Point(s) or the Quantity received at the

Receipt Point(s). For customers receiving