Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 07/01/2000, Docket: RP00-288-000, Status: Effective

Original Sheet No. 515 Original Sheet No. 515 : Effective

RATE SCHEDULE CH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE V - OPERATING PROCEDURES (Continued)

5.2 Balancing of Gas. (Continued)

5.2.2 At End of Agreement. Transporter and Shipper agree to correct any

cumulative imbalances in receipts and deliveries as soon as

practicable. In the event that at the end of the term of the

Transportation Service Agreement there are cumulative imbalances

in receipts and deliveries, Transporter and Shipper shall correct

such cumulative imbalances as soon as practicable after the end of

the term of the Transportation Service Agreement. All

calculations of balances and imbalances and corrections under this

Section shall be made on a Thermally Equivalent basis.

5.2.3 Uniform Deliveries. Transporter and Shipper undertake to maintain

receipt and deliveries on a uniform daily basis to the maximum

extent practicable, subject to the provisions of this Rate

Schedule as to scheduling and balancing.

5.2.4 Imbalances With Other Parties. Shipper shall be responsible for

imbalances in volumes that accrue between Shipper and any other

party, including without limitation any volume imbalances that

accrue between Gas producers or pipelines and Shipper upstream of

the receipt of Gas at Receipt Point(s) and downstream of the

delivery of Gas at Delivery Point(s). As to Shipper's imbalances

with Transporter and Transporter's imbalances with other shippers

accruing after receipt of Gas by Transporter from Shipper at

Receipt Point(s) and prior to and upon delivery of Gas by

Transporter to Shipper at Delivery Point(s), Transporter shall

take actions of whatever nature may be required including

reduction of service to other shippers to correct such imbalances

hereunder.

5.3 Records of Scheduled Quantities. Transporter shall keep accurate

records of the quantities of Gas scheduled for Transportation and any

imbalances, which records shall be made available to Shipper at its

request. If Shipper's Gas is commingled with other Gas at the Receipt

Point(s) or at the Delivery Point(s), the scheduling arrangements and

Transporter's records shall include procedures for the allocation of the

total quantity at such points.