Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 08/01/2009, Docket: RP09-723-000, Status: Effective

First Revised Sheet No. 537 First Revised Sheet No. 537

Superseding: Original Sheet No. 537

RATE SCHEDULE CH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE X - INVOICING AND PAYMENT (Continued)

10.4 Interest on Over Collections by Transporter. Should Transporter over

collect by payment of any bill by Shipper, interest shall accrue on the

amount of the over collection at a rate of interest equal to the then

effective rate computed in the manner set forth in Section 154.501(d)(1)

of the FERC's regulations under the Natural Gas Act. If such

regulations become inapplicable to such amounts, the rate shall be

computed on the basis of the lesser of two percent (2%) above the prime

rate from time to time charged by Chase Manhattan, N.A. (or the

succeeding bank of Chase Manhattan, N.A.), or the maximum applicable

nonusurious rate of interest in the state of Texas. Such interest shall

accrue on the amount of the over collection, plus any unpaid interest

compounded daily, beginning on the date Transporter receives the over

collected funds, and shall terminate on the date Transporter repays such

funds to Shipper.

10.5 Remedies for Failure to Pay. If Shipper's failure to pay continues for

45 Days after payment is due, Transporter, in addition to any other

remedy it may have, may suspend further delivery of Gas until such

amount is paid unless Shipper in good faith disputes the amount owing

and pays all amounts not subject to such good faith dispute.

10.6 Late Billing. If presentation of a bill by Transporter is delayed after

the due date, then the time for payment shall be extended

correspondingly unless Shipper is responsible for such delay.

10.7 Disputed Invoices. NAESB WGQ 3.3.19: "If invoice is in dispute, pay

portion not in dispute and provide documentation identifying basis for

the dispute."

10.8 Adjustment of Invoicing Error. If it shall be found by Transporter that

at any time or times Shipper has been overcharged or undercharged in any

form whatsoever under the provisions hereof and Shipper shall have

actually paid the invoice containing such overcharge or undercharge,

then within 30 Days after the final determination thereof, Transporter

shall refund the amount of any such overcharge or Shipper shall pay the

amount of any such undercharge unless the amount is disputed by