Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 01/01/2010, Docket: RP10-210-000, Status: Effective

Sixth Revised Sheet No. 110 Sixth Revised Sheet No. 110

Superseding: Fifth Revised Sheet No. 110

GENERAL TERMS AND CONDITIONS

(Continued)

12. REIMBURSEMENT OF FUEL USED AND LOST AND UNACCOUNTED-FOR GAS (Continued)

12.3 For rolled-in rate service, the compressor fuel factors will be

determined monthly as follows: for each compressor station, the

historical fuel usage at that site will be adjusted for known and

expected operational changes to determine projected fuel usage

attributable to rolled-in rate service for the month in which the

factor is to be effective. The sum of the projected fuel usage

and any required true-up adjustment will be divided by projected

receipt quantities attributable to rolled-in rate service at that

compressor that month. (The true-up adjustment for each

compressor is the difference between total fuel used by rolled-in

rate shippers at that compressor and net fuel reimbursed by rolled-

in rate Shippers at that compressor two months earlier.)

12.4 For incremental rate service on the 2003/2010 Expansions,

Transporter will determine compressor fuel factors for incremental

rate service using the same method used for rolled-in rate

service.

12.5 For interruptible and authorized overrun service, the compressor

fuel factors will be determined monthly. Each factor will be a

blended rate derived from the monthly fuel factors applicable to

rolled-in rate service and incremental rate service on the 2003

Expansion, calculated on the basis of 48% for rolled-in service

and 52% for incremental service. Effective on the in-service date

of the 2010 Expansion, the blended rates will be derived from the

monthly fuel factors applicable to rolled-in rate service and

incremental rate service on the 2003/2010 Expansions, calculated

on the basis of 45% for rolled-in service and 55% for incremental

service.

12.6 Total fuel used at each compressor each month will be allocated

between rolled-in and incremental rate groups on a pro rata basis

using actual receipt quantities at each compressor, with the

receipt quantities attributable to the incremental rate group

adjusted by the following weighting factors: Muddy Creek - 1.56;

Painter - 1.00; Anschutz - 1.00; Coyote Creek - 2.00; Salt Lake -

2.00; Elberta - 1.89; Fillmore - 2.13; Veyo - 2.00; Dry Lake -

2.00; Goodsprings - 2.12. Effective on the in-service date of the

2010 Expansion, the receipt quantities attributable to the

incremental rate group will be adjusted by the following weighting

factors: Muddy Creek - 1.40; Painter - 1.00; Anschutz - 1.00;

Coyote Creek - 1.90; Salt Lake - 1.90; Elberta - 1.87; Fillmore -

1.87; Veyo - 1.87; Dry Lake - 1.88; Goodsprings - 2.10.

12.7 The system-wide lost and unaccounted-for gas factor applies to

rolled-in rate service, incremental rate service on the 2003/2010

Expansions, and all overrun and interruptible service, but does

not apply to service on the High Desert Lateral. The system-wide

lost and unaccounted-for gas factor will be determined monthly as

follows: the historical system-wide lost and unaccounted-for gas

will be adjusted for known and expected operational changes to