Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 11/01/2003, Docket: RP04- 4-000, Status: Effective

Third Revised Sheet No. 511 Third Revised Sheet No. 511 : Effective

Superseding: Second Revised Sheet No. 511

RATE SCHEDULE CH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE IV - TRANSPORTATION RATES AND CHARGES (Continued)

4.1 Charges. (Continued)

4.1.7 Adjustment to the Reservation Charge. If on any Day Transporter

for any reason, including but not limited to force majeure as

described in Article XI, is unable to deliver to Shipper a

Quantity of Gas Thermally Equivalent to 100% of the Quantity of

Natural Gas tendered by Shipper for Transportation on such Day up

to Shipper's TMDQ as set forth in Article II, then the

Reservation Charge otherwise payable by Shipper during the Month

in which Transporter is unable to deliver shall be reduced in the

following manner:

(a) For Days 1 through 30 there shall be no adjustment to the

Reservation Charge.

(b) For Days 31 through 60 the Reservation Rate shall be

reduced by an amount equal to the portion of the

Reservation Rate which is attributable to Transporter's

recovery of all taxes other than income taxes, depreciation

associated with equity, operating and maintenance expenses

and administrative and general expenses. Notwithstanding

the foregoing, such reduction shall not reduce the

Reservation Rate to an amount less than a unit rate which