Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Original Sheet No. 743 Original Sheet No. 743 : Effective

RATE SCHEDULE MO-1

Kern River Firm Transportation Services

(Continued)

ARTICLE XII - STATUTORY REGULATION

12.1 Rate Filings. Transporter's rates, charges, classifications and

services as set forth in this Rate Schedule and the Transportation

Service Agreement are subject to regulation by the FERC under the

Natural Gas Act of 1938, as amended, 15 USC Section 717, et seq.("NGA").

Transporter shall have the right to file from time to time with the FERC

under Section 4 of the Natural Gas Act and to place into effect such

changes in this Rate Schedule, the Transportation Service Agreement or

Transporter's Tariff as Transporter may find necessary from time to time

to assure Transporter just and reasonable rates and charges and terms

and conditions of service. Shipper shall have the right to oppose any

such changes assure Shipper just and reasonable rates and terms and

conditions. Shipper shall have the right to seek from the FERC under

the NGA such changes in this Rate Schedule or the Transportation Service

Agreement as Shipper may find necessary. Waivers of these statutory

rights, if any, shall be as provided in the Transportation Service

Agreement between Transporter and Shipper.

12.2 Filing Requirement. Each party hereto shall proceed with diligence to

file applications with the FERC and any other governmental authorities

for any authorizations necessary to carry out their respective

obligations under this Rate Schedule and the Transportation Service

Agreement.

12.3 Conformance with Laws. Notwithstanding any other provisions hereof,

this Rate Schedule and the Transportation Service Agreement and all

rights and obligations arising under it are subject to all valid

legislation, both State and Federal, and to all valid present and future

orders, rules and regulations of duly constituted authorities, now or

hereafter having jurisdiction.