Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Original Sheet No. 636 Original Sheet No. 636 : Effective

RATE SCHEDULE UP-1

Kern River Firm Transportation Services

(Continued)

ARTICLE VIII - INVOICING AND PAYMENT (Continued)

8.4 Interest on Overcollections by Transporter. (Continued)

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

overcollection, plus any unpaid interest compounded daily, beginning on

the date Transporter receives the overcollected funds, and shall

terminate on the date Transporter repays such funds to Shipper.

8.5 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 Transportation 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.

8.6 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.

8.7 Adjustment of Invoicing Errors. In the event an error is discovered in

any invoice rendered by Transporter, Shipper must contest such amount in

writing within six (6) months from the date that the invoice was

rendered, otherwise the invoice will be deemed correct. Transporter

will correct any invoicing errors (after a rebuttal period of not more

than three months) within thirty (30) days of the date that Shipper and

Transporter agree that an invoicing error occurred.

8.8 Financial Requirements. Upon a reasonable request by Transporter,

Shipper will render to Transporter complete audited financial statements

of Shipper or Shipper's parent (including Shipper's ultimate parent) as

contained in the respective Form 10-K's and Annual Reports of such

companies. Upon request by Transporter, Shipper shall cause its parent

to provide a guaranty of Shipper's financial performance hereunder.