Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 05/01/2002, Docket: RP01-190-002, Status: Effective

First Revised Sheet No. 738 First Revised Sheet No. 738 : Effective

Superseding: Original Sheet No. 738

RATE SCHEDULE MO-1

Kern River Firm Transportation Services

(Continued)

ARTICLE VIII - INVOICING AND PAYMENT (Continued)

8.9 Financial Requirements. (Continued)

If Transporter hereafter reasonably determines that Shipper or its

guarantor is not creditworthy, Transporter may require Shipper to

deposit with Transporter, and maintain on prepaid account, or to

establish and maintain an escrow account, or to furnish a letter of

credit from a financial institution mutually agreeable to Transporter

and Shipper, in an amount equal to Transporter's estimate of three (3)

months of the charges for performing Transportation service at the level

of Shipper's Demand Maximum Daily Quantity, or to furnish within 15 days

of notice, good and sufficient security in a form mutually agreed to by

Transporter and Shipper, of a continuing nature and in an amount equal

to Transporter's estimate of the charges for performing said

transportation service at a level of Shipper's Demand Maximum Daily

Quantity for a period of three (3) months, or as Shipper and Transporter

mutually agree provides equivalent credit support.

If a deposit is required of Shipper then upon Shipper's establishment of

an acceptable credit record or upon expiration of the Transportation

Service Agreement, Transporter shall refund Shipper's deposit, with

interest accrued at rates set pursuant to 18 CFR Section 154.501(d)(1).