Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 01/01/2004, Docket: RP04- 68-000, Status: Effective

Second Revised Sheet No. 626 Second Revised Sheet No. 626 : Effective

Superseding: First Revised Sheet No. 626

RATE SCHEDULE UP-1

Kern River Firm Transportation Services

(Continued)

ARTICLE V - QUALITY (Continued)

5.5 Failure to Conform. (Continued)

(d) Transporter shall deliver to Shipper Gas which conforms to the

quality specifications of Section 5.1 herein. If Transporter

fails to deliver Gas which conforms to such quality

specifications, then the Monthly Demand Charge Amount for the

Month in which such failure occurs shall be reduced by an amount

calculated by multiplying each Dth of non-conforming Gas tendered

but not delivered by Transporter to Shipper by the Daily

Reservation/Demand Rate, provided however, that if during the

Month of Transporter's non-conforming deliveries, Transporter

receives from Shipper Gas which does not conform to the quality

specifications of this Article V, all non-conforming volumes

received by Transporter from Shipper during such Month shall be

subtracted from the volumes of non-conforming deliveries by

Transporter to Shipper before the amount of the reduction to the

Monthly Demand Charge Amount is calculated.