Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 12/19/2009, Docket: RP10-160-000, Status: Effective

Fourth Revised Sheet No. 212 Fourth Revised Sheet No. 212

Superseding: Third Revised Sheet No. 212

. GENERAL TERMS AND CONDITIONS

(Continued)

27. AVAILABLE CAPACITY (Continued)

27.5 Right of First Refusal.

(a) Shipper may exercise a right of first refusal to continue

receiving service at the end of the term of any agreement,

including any term extended pursuant to any contractual

rollover or evergreen provision, provided that Shipper is

not receiving service on an interim basis using capacity

that has been committed at a future date to a firm

transportation service agreement or that has been reserved

for an expansion project pursuant to Section 27.2(d), and

further provided that Shipper is receiving service (1) at

the maximum rate for a term of twelve consecutive months or

longer (or for one year or longer where service is not

available for twelve consecutive months); (2) at any rate

for a term of one year or longer when such service is

provided under a service agreement executed prior to March

27, 2000; or (3) at a discounted or negotiated rate where

Transporter has agreed to provide Shipper a right of first

refusal.

To exercise such right of first refusal, Shipper must agree

to match the rate or rates, up to the maximum rate or rates

then applicable, and the agreement term to which a competing

prospective Shipper is willing to agree with Transporter for

all or any portion of the transportation rights then held by

Shipper; provided, however, that nothing herein shall

obligate Transporter to render service to Shipper or to any

competing prospective Shipper if such persons do not agree

to pay Transporter's maximum rates then applicable. Shipper

has twenty-four (24) hours to match the higher bid for

service with a term of one year or longer and two (2) hours

to match the higher bid for service with a term of less than

one year.

If the highest bid submitted by a competing prospective Shipper is

a Negotiated Rate that meets or exceeds the lowest rate

Transporter is willing to accept for such service, the existing

Shipper may retain its capacity by matching the bid on either a

Negotiated Rate basis or a Recourse Rate basis as provided in

Section 23.2(c) of the General Terms and Conditions. To exercise

its right of first refusal, Shipper must agree to all other terms

and conditions of service to which the competing prospective

Shipper is prepared to agree, or to such other terms and

conditions as may be acceptable to Transporter.