Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Original Sheet No. 542 Original Sheet No. 542 : Effective

RATE SCHEDULE CH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE XIV - STATUTORY REGULATION

14.1 Rate Filings. Transporter's rates, charges, classification, and

services as set forth in this Rate Schedule and the Transportation

Service Agreement are subject to regulation by the FERC under the

Natural Gas Act. Transporter shall have the right to file from time to

time with the FERC under Section 4 of the Natural Gas Act and to place

into effect changes in this Rate Schedule, the Transportation Service

Agreement, or Transporter's tariff that Transporter may find necessary

from time to time to assure Transporter just and reasonable conditions

of service and rates as well as a rate of return sufficient, inter alia,

to service the debt, attract capital, permit facilities expansion, and

provide adequate Natural Gas Transportation service to all of

Transporter's shippers. Shipper shall have the right to protest before

the FERC any such changes in rates or conditions of service.

14.2 Conformance with Laws. Notwithstanding any other provisions hereof,

this Rate Schedule and the Transportation Service Agreement and all

rights and obligations arising under it are subject to all valid

legislation, local, state and federal, and to all valid present and

future orders, rules and regulations of duly constituted authorities,

now or hereafter having jurisdiction.

14.3 Filing Requirement. Each party hereto shall proceed with diligence to

file applications with the FERC and any other governmental authorities

for any authorizations and/or permits necessary to carry out their

respective obligations under this Rate Schedule and the Transportation

Service Agreement.