Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 09/04/2009, Docket: RP09-860-000, Status: Effective

First Revised Sheet No. 499 First Revised Sheet No. 499

Superseding: Original Sheet No. 499

. .

NEGOTIATED RATE AGREEMENTS (Continued)

FOOTNOTES: (Continued)

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Index Spread Adjustment* = [(Others "SoCal Gas" - Rockies "Kern River, Opal

Plant") - (Maximum Rate)] x .75

*Based on the Daily Price Survey, Flow Date Midpoint spot price reported in

the Platts' Gas Daily publication for the day of scheduled transportation.

In no event will the Total Rate, less applicable surcharges, be less than

the Maximum Rate described above.

8/ Reservation/Demand Charges:

Shipper will pay Transporter a negotiated firm daily reservation/ demand rate

of $0.047 per Dth for the DMDQ listed in Exhibit "A" for the entire term of the

agreement.

Commodity/Usage Charges:

Shipper will pay Transporter a commodity/usage rate of $0.20 per Dth for all

capacity scheduled by Shipper or any replacement Shipper using the

transportation path(s) identified on Exhibit "A," 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

Index Spread Adjustment* = [(Others "SoCal Gas" - Rockies "Kern River, Opal

Plant") - (Maximum Rate)]x.80

*Based on the Daily Price Survey, Flow Date Midpoint spot price reported in the

Platts' Gas Daily publication for the day of scheduled transportation.

In no event will the total Rate, less applicable surcharges, be less than the

Maximum Rate.