Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 06/01/2008, Docket: RP00-157-018, Status: Effective

Original Sheet No. 498 Original Sheet No. 498

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NEGOTIATED RATE AGREEMENTS (Continued)

FOOTNOTES: (Continued)

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4. For scheduled quantities from the Goshen receipt point to delivery

points north of the Goshen receipt point and south of the Coyote Creek

compressor station, other than the Lake Side and West Valley delivery

points, from February 1, 2008 through January 31, 2037, Shipper will pay

Transporter a discounted firm daily reservation/demand backhaul rate of

$0.12 per Dth.

5. For scheduled quantities from the Goshen receipt point to all delivery

points north of the Coyote Creek compressor station from February 1, 2008

through January 31, 2037, Shipper will pay Transporter's maximum firm daily

reservation/demand rate under Rate Schedule KRF-1 for firm incremental rate

service related to the 2003 Expansion Project at the time service is

rendered, or a discounted firm daily reservation/demand backhaul rate

mutually agreed to by Transporter and Shipper.

Commodity/Usage Rate:

The Commodity/Usage Rate for all capacity scheduled by Shipper or any

replacement Shipper pursuant to paragraphs (2) through (5) above shall be

the lesser of $0.005 per Dth or the maximum rate under the KRF-1 Rate

Schedule for firm incremental rate service at the time service is rendered,

plus all applicable surcharges, for the entire term of the agreement.

Transportation Charges for All Other Transportation Paths and for

Authorized Overrun:

For all other scheduled quantities, including quantities in excess of

Shipper's DMDQ, Shipper will pay Transporter a Total Rate that is

calculated as follows:

Total Rate = Maximum Rate + Applicable Surcharges + Index Spread

Adjustment

Where: Maximum Rate = The sum of the maximum firm daily

reservation/demand rate and the maximum

commodity/usage rate under Rate Schedule KRF-

1 for incremental rate service related to

the 2003 Expansion Project