Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 02/01/2006, Docket: RP06-160-000, Status: Effective

First Revised Sheet No. 174 First Revised Sheet No. 174 : Effective

Superseding: Original Sheet No. 174

GENERAL TERMS AND CONDITIONS

(Continued)

20. FACILITIES

20.1 Definitions. For purposes of this Section, Facilities are defined

as the facilities that are necessary for the receipt of Gas from,

or the delivery of Gas to, one or more Shippers. Facilities

include, but are not limited to, receipt and delivery laterals,

and Receipt and Delivery Point measurement equipment. They do not

include any facilities that increase the system capacity, such as

additional mainline compression or looping facilities.

For purposes of this Section, Shipper is defined as any entity

with whom Transporter has entered into a Transportation Service

Agreement or a separate facilities agreement to reimburse

Transporter for the cost of facilities constructed, modified or

rearranged pursuant to this section.

20.2 Installation and Reimbursement. Except as otherwise provided in

agreements executed by Transporter prior to June 3, 1996,

Transporter is not obligated or required to construct, modify, or

rearrange any facilities in order to perform any service,

including any facilities necessary to receive Gas from, deliver

Gas to, or measure any Gas received from or delivered to any

Shipper. In the event Transporter agrees to construct, modify, or

rearrange facilities for receipt or delivery of a Shipper's Gas,

Transporter will have the right to condition its agreement to so

construct, modify or rearrange its facilities by requiring that

Shipper pay Transporter for the costs associated with the

installation, construction, modification, operation, maintenance

and/or rearrangement of such facilities. In so conditioning its

agreement to require Shipper to pay such costs, Transporter and

Shipper will mutually agree to one of the following:

(a) a contribution in aid of construction ("CIAC") associated

with such construction, modification and/or rearrangement of

facilities, including a gross-up for applicable state and

federal income tax expense; or

(b) a CIAC associated with such construction, modification,

and/or rearrangement of facilities, including a gross-up for

applicable state and federal income tax expense and the

associated costs of operation and maintenance; or