Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Fifth Revised Sheet No. 110B Fifth Revised Sheet No. 110B

Superseding: Fourth Revised Sheet No. 110B

. .

GENERAL TERMS AND CONDITIONS

(Continued)

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

12.12 Electric Compressor Fuel Surcharge. (Continued)

(1) Transporter will determine the electric compressor

fuel surcharge for rolled-in rate service beginning

April 1, 2003, using the following formula:

W = (X + Y)/ Z, where:

W = Electric Compressor Fuel Surcharge for Rolled-In

Rate Service

X = Transporter's share of the electricity costs for

the Daggett compressor projected for the twelve

months beginning April 1 of the current year

attributable to rolled-in rate service

Y = The amount, positive or negative, remaining in

the Electric Compressor Fuel Deferral Account at

the end of the previous calendar year

attributable to rolled-in rate service.

Z = Quantities of gas projected to flow on

Transporter's system through the Daggett

interconnect for the twelve months beginning

April 1 of the current year attributable to

rolled-in rate service.

(2) Transporter will determine an electric compressor fuel

surcharge for incremental rate service using the same

method as used for the rolled-in rate service.

(3) The electric compressor fuel surcharge for

interruptible and authorized overrun service will be a

blended rate derived from the surcharges 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 rate will be derived from the

surcharges 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.