Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 12/01/2007, Docket: RP08- 01-000, Status: Effective

Third Revised Sheet No. 127 Third Revised Sheet No. 127 : Effective

Superseding: Second Revised Sheet No. 127

GENERAL TERMS AND CONDITIONS

(Continued)

13. SCHEDULING OF RECEIPTS AND DELIVERIES (Continued)

13.2 Scheduling Process. (Continued)

c) Third, pro rata based on nominated

Quantities when two or more Shippers

are paying the same rate, have the

same Priority of Service Date, and

available mainline capacity is

insufficient to accommodate all

nominations at the same rate with

the same Priority of Service Date.

(2) Receipt Point and Delivery Point Capacity:

After mainline capacity has been allocated,

Receipt Point and Delivery Point capacity will

be allocated in the priority and sequence

described below:

(i) To Shippers nominating Firm Transportation

Service with primary entitlements at the

Receipt Points and Delivery Points.

If Receipt Point or Delivery Point

capacity is constrained, then available

capacity will be allocated pro rata, based

on each Shipper's primary entitlements at

the constrained point.

(ii) To Shippers nominating Firm Transportation

Service without primary entitlements at

the Receipt Points and Delivery Points.

If Receipt Point or Delivery Point

capacity is constrained, then available

capacity will be allocated pro rata, based

on each Shipper's confirmed nominations at

the constrained point.

(iii) To Shippers nominating Interruptible

Transportation Service and Authorized

Overrun Service.

If Receipt Point or Delivery Point

capacity is insufficient to accommodate

the total Quantities nominated, then

available capacity will be allocated as

follows: first, based on rate paid as set

forth in Section 13.2(a)(1)(ii)a); second,

based on Priority of Service Date; and

third, pro rata, based on nominated

Quantities.