Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 05/01/2002, Docket: RP01-190-002, Status: Effective

Original Sheet No. 190 Original Sheet No. 190 : Effective

GENERAL TERMS AND CONDITIONS

(Continued)

25. MCF TO DTH CONVERSION METHODOLOGY (Continued)

d. TMDQ for Expiring Capacity Releases and Capacity Recalls.

When a capacity release expires, or when a Releasing Shipper

elects to recall all or a portion of its released capacity,

Transporter will determine the associated TMDQ to be

restored to the releasing Shipper by dividing the DMDQ being

restored by the weighted average, system-wide Btu factor

that was used to convert releasing Shipper's MDQ to a DMDQ

and multiplying the result by the releasing Shipper's base

average Btu factor.

25.5 Receipt and Delivery Point Entitlements. For the purpose of

determining rights to capacity at Receipt and Delivery Points, the

Receipt and Delivery Point Entitlements stated on a Shipper's

Transportation Service Agreement will be converted using a Btu

conversion factor of 1.0.

If a Shipper's aggregate Receipt and/or Delivery Point

Entitlements are less than the Shipper's TMDQ, Transporter will

increase Shipper's Receipt and Delivery Point Entitlements at

mutually agreeable points where capacity is available, so that

aggregate Entitlements equal Shipper's TMDQ. If, pursuant to this

Section, requests for additional capacity at any Receipt or

Delivery Point exceed available capacity at that point, the

available capacity will be prorated among the requesting shippers,

based on capacity requested.

If Transporter determines at any time that additional Receipt or

Delivery Point capacity is available due to a change in the Btu

value at that point, the excess capacity will be used to provide

added flexibility to Shippers that wish to use the point on a

secondary or interruptible basis.

25.6 Reservation Charge Credits. Failure by Transporter to receive

and/or deliver quantities of gas in excess of a Shipper's

currently effective TMDQ will be exempt from any otherwise

applicable reservation charge credits. Furthermore, the days or

quantities that Transporter is unable to deliver due to a

Shipper's nominations in excess of its currently effective TMDQ

will not be included in the calculation of days or quantities

allowed Transporter before demand charge credits are applicable.