Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 08/01/2004, Docket: RP04-339-000, Status: Effective

Third Revised Sheet No. 712 Third Revised Sheet No. 712 : Effective

Superseding: Second Revised Sheet No. 712

RATE SCHEDULE MO-1

Kern River Firm Transportation Services

(Continued)

ARTICLE III - TRANSPORTATION RATES AND CHARGES (Continued)

3.1 Rates. (Continued)

3.1.2 Effective Rates. Effective on the Commencement Date the Monthly

Reservation Rate shall be the Maximum Monthly Reservation Rate,

and the Commodity Rate shall be the lesser of the Projected

Commodity Rate or the Maximum Commodity Rate.

3.2 Charges. Shipper shall pay Transporter for transportation services

pursuant to this Rate Schedule each Month from and after the

Commencement Date either (1) an amount equal to the sum of the amounts

described in Sections 3.2.1, 3.2.2, 3.2.3 and 3.2.4 below, or (2) the

amount specified in Article 3.2.6.

3.2.1 Monthly Reservation Charge Amount. A monthly amount calculated

by multiplying Shipper's DMDQ by the applicable Daily

Reservation/Demand Rate shown on Sheet No. 5 and multiplying the

result by the number of days in the Month.