Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Original Sheet No. 538 Original Sheet No. 538 : Effective

RATE SCHEDULE CH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE X - INVOICING AND PAYMENT (Continued)

10.8 Adjustment of Invoicing Error. (Continued)

Shipper. In the event an error is discovered by Shipper in the amount

invoiced for any invoice rendered by Transporter, such error shall be

adjusted within 30 Days of the determination thereof; provided that

notice of audit or error shall have been made within six (6) Months

from the date of such invoice. In the event that any portion of the

invoice is in dispute, payment of the disputed portion shall not be

deemed a waiver of the right to contest such disputed portion in any

forum having jurisdiction in the premises.

10.9 Financial Requirements. Upon request by Transporter, Shipper will

render to Transporter complete audited financial statements of Shipper

or, if applicable, Shipper's parent, as contained in Shipper's or

Shipper's parent's latest Form 10-K and Annual Report, prepared in

accordance with generally accepted accounting principles. If, at any

time during the term of the Transportation Service Agreement, Shipper

receives a written notice from Transporter that Transporter has

reasonable grounds for insecurity as to Shipper's performance hereunder,

describing such grounds in reasonable detail, Shipper shall, within ten

Days after receipt of such notice, provide Transporter with adequate

assurance of Shipper's performance hereunder, either by Shipper or by

its parent. Transporter's receipt of a bona fide notice from one or

more of Transporter's substantial lenders that any such lender considers

the risk of Shipper's default hereunder to be unacceptably great shall

be conclusively presumed to constitute reasonable grounds for

Transporter's insecurity hereunder.

If Transporter reasonably deems Shipper's or Shipper's parent's

assurance of performance to be inadequate under the circumstances,

Transporter may request in writing to Shipper or Shipper's parent one or

more forms of security or assurance of performance that Transporter will

consider adequate. In such event, Shipper or Shipper's parent agrees to

provide such security or assurance in a reasonable form specified by

Transporter.