Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 07/30/2008, Docket: RP09-306-000, Status: Effective

Eighth Revised Sheet No. 140 Eighth Revised Sheet No. 140

Superseding: Seventh Revised Sheet No. 140

. GENERAL TERMS AND CONDITIONS .

(Continued)

15. CAPACITY RELEASE PROGRAM (Continued)

15.2 Releasing Shipper's Release Request. (Continued)

(4) The Replacement Shipper will be entitled to utilize

any Secondary Receipt Point or Secondary Delivery

Point on Transporter's System in connection with any

Release, subject to all applicable terms and

conditions contained in Transporter's tariff.

(e) the daily reservation rate in dollars and cents or percent

of maximum tariff rate for the service to be released

("Release Reservation Rate"), and any and all other

applicable reservation charges and surcharges for the

service to be released (collectively, the "Release

Reservation Surcharges"), including any minimum acceptable

Release Reservation Rate and Release Reservation Surcharges;

provided, however, that for permanent releases, the Release

Reservation Rate and Release Reservation Surcharges must be

equal to or higher than the rate and surcharges that the

Releasing Shipper is obligated to pay to Transporter for the

released capacity. The Release Reservation Rate and the

Release Reservation Surcharges will be collectively referred

to at times in this Section 15 as the "Total Release

Reservation Charge." The Release Request should indicate if

the Releasing Shipper wishes to release its capacity at a

rate that is calculated using a formula based on index

prices for specific receipt and/or delivery points or upon

other published pricing reference points. Index-based rates

will be no higher than the Maximum Base Tariff Reservation/

Demand Rates set forth on Sheet Nos. 5 and 5-A of

Transporter's Tariff, unless the Release is exempt from the

rate ceiling under Section 15.11(d). In either case, such

rates shall be no lower than the Minimum Base Tariff

Reservation/Demand Rates set forth on Sheet Nos. 5 and 5-A

of Transporter's Tariff. The Release Request must also

specify whether the Releasing Shipper will accept bids

designed on a one-part volumetric basis for all or any

portion of the Total Release Reservation Charge and, if so,

the corresponding objective, nondiscriminatory economic

standard which the Releasing Shipper desires Transporter to

utilize to determine the award of the Release if any or all

bids are submitted on a one-part volumetric basis;