Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Third Revised Sheet No. 715 Third Revised Sheet No. 715 : Effective

Superseding: Second Revised Sheet No. 715

RATE SCHEDULE MO-1

Kern River Firm Transportation Services

(Continued)

ARTICLE III - TRANSPORTATION RATES AND CHARGES (Continued)

3.3 Prior to the Commencement Date. (Continued)

multiplying the Maximum Commodity Rate by each Dth of Gas actually

received by Transporter from Shipper each Day, less fuel use and

lost and unaccounted for Gas, as adjusted by the Thermal

Conversion Factor.

(b) The Annual Charge Adjustment Amount as described in Section 3.2.4

herein.

3.4 Fuel Use, Lost and Unaccounted for Gas.

3.4.1 Fuel Calculation. The Transportation rates set out on Sheet No. 5

are exclusive of fuel use requirements and lost and unaccounted

for Gas, which shall be furnished in kind by Shipper each Day,

pursuant to Section 12 of the General Terms and Conditions of this

tariff. Transporter shall make every reasonable effort to operate

in a prudent manner and to conserve and keep to the optimum level

the quantity of Gas used for compressor station fuel. Shipper

shall only be required to provide fuel as provided in this Section

3.4.1 to support normal operations. Shipper shall not be required

to provide fuel for start-up, testing, line pack or other non-

operational purposes.

3.4.2 Loss Limitations. The total quantity of Gas in Dekatherms for

lost and unaccounted for Gas shall not exceed one percent (1%) of

the quantity of Gas in Dekatherms tendered by Shipper to

Transporter on a cumulative basis.