Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 11/01/2004, Docket: RP04-619-000, Status: Effective

Third Revised Sheet No. 157 Third Revised Sheet No. 157 : Effective

Superseding: Second Revised Sheet No. 157

GENERAL TERMS AND CONDITIONS

(Continued)

15. CAPACITY RELEASE PROGRAM (Continued)

15.10 Invoicing and Payment. (Continued)

to Replacement Shipper as consideration for accepting a

permanent release will not be considered to be a discount

from the maximum applicable tariff rate.) Releasing Shipper

also is responsible for payment obligations, payment

procedures and crediting mechanisms that vary from or are in

addition to those set forth herein when those provisions are

part of a Negotiated Rate service agreement. A Releasing

Shipper who is not a Base Shipper will likewise remain

responsible for payment to Transporter of, without

limitation, the Release Reservation Rate and the Release

Reservation Surcharges for service provided under its

Released Transportation Service Agreement prior to any

subsequent Release thereunder.

(b) The Releasing Shipper will initially be invoiced only for

the reservation and usage rates and any and all other

applicable charges and surcharges which are related to the

service provided by Transporter under the Releasing

Shipper's Service Agreement subsequent to any and all

Releases thereunder; and, for temporary releases, for any

additional amount by which the Releasing Shipper's combined

reservation rate and reservation surcharges for any Day may

exceed the Total Release Reservation Charge for any

corresponding Day during the term of any Release by the

Releasing Shipper. Transporter will invoice the Replacement

Shipper and the Replacement Shipper will pay Transporter in

accordance with Section 5 of the General Terms and

Conditions of this Tariff based upon the Total Release

Reservation Charge, usage charge and any and all other

applicable charges and surcharges incorporated in the

Released Transportation Service Agreement.