Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 12/20/2002, Docket: RP03- 82-000, Status: Effective

Third Revised Sheet No. 632 Third Revised Sheet No. 632 : Effective

Superseding: Second Revised Sheet No. 632

 

RATE SCHEDULE UP-1

Kern River Firm Transportation Services

(Continued)

 

ARTICLE VII - TERM OF AGREEMENT

 

7.1 Effective Date and Term. The term of service shall be as provided for

in the Transportation Service Agreement between Transporter and Shipper.

 

7.2 Continuation of Term. Shipper shall have the continuing option to

extend the term of the Transportation Service Agreement at the same or a

lower DMDQ for one or more additional one-year periods by providing at

least twelve months written notice prior to the commencement of each

such additional period. Such notice(s) shall include any DMDQ

reduction. Provided, however, that no such extended term shall be

effective unless Transporter and Shipper mutually agree, at least six

months prior to the commencement of each such extended term, on the

rates or rate mechanism to be in effect during such extended term.

Transporter and Shipper shall make every reasonable effort to reach

agreement on such rates. Notwithstanding the foregoing, if Shipper

agrees to pay Transporter's then-existing maximum FERC authorized rate

for firm transportation service, then such extended term shall be

effective in accordance with Shipper's notice.

 

If Shipper elects to extend the primary term of its service agreement

for only a portion of its firm contract rights, Shipper's DMDQ,

aggregate Receipt Point Entitlements and aggregate Delivery Point

Entitlements for the extended term must be retained by the same

percentage.

 

7.3 Right of First Refusal.

 

(a) At the end of the term determined in accordance with Sections 7.1

and 7.2 above, Shipper may exercise a right of first refusal to

continue service, provided that Shipper is receiving service (1)

at the maximum rate for a term of twelve consecutive months or

longer (or for more than one year for service which is not

available for twelve consecutive months); or (2) at any rate for a

term of one year or longer when such service is provided under a

service agreement executed prior to March 27, 2000.

 

To exercise such right of first refusal, Shipper must agree to

match the rate or rates, up to the maximum rate or rates then

applicable, and the agreement term which a competing prospective

shipper is willing to irrevocably agree to with Transporter, for

all or any portion of