Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 10/01/2002, Docket: RP03- 34-000, Status: Effective

Third Revised Sheet No. 823 Third Revised Sheet No. 823 : Superseded

Superseding: Second Revised Sheet No. 823

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 5 - CAPACITY RELEASE PROGRAM (Continued)

5.4 Transporter's Posting of Release Requests. (Continued)

(b) In the event the Release Request indicates that bids for the

Release will be accepted on a one-part volumetric basis for the

Release Reservation Rate or the Release Reservation Surcharges,

Transporter shall determine the applicable respective maximum one-

part volumetric Release Reservation Rate and Release Reservation

Surcharges and shall post this information pursuant to Section

5.4(a). The applicable maximum one-part volumetric Release

Reservation Rate shall be the applicable Daily Reservation Rate

set forth in Transporter's Tariff, which is the 100% load factor

equivalent of the maximum Tariff Reservation Rate on an annualized

basis divided by 365. The applicable maximum one-part volumetric

Release Reservation Surcharges shall be the 100% load factor

equivalent of the maximum Tariff Reservation Surcharges on an

annualized basis divided by 365.

to any party concerning the willingness or ability either of any

Releasing Shipper to release Transportation rights hereunder or of

any Bidder to accept Transportation rights hereunder.

(d) NAESB 5.3.25: "A releasing shipper should not be able to specify

an extension of the original bid period or the pre-arranged deal

match period, without posting a new release."

(e) NAESB 5.3.14: "Offers should be binding until written or

electronic notice of withdrawal is received by the capacity

release service provider." NAESB 5.3.16: "The releasing party has

the right to withdraw its offer during the bid period, where

unanticipated circumstances justify and no minimum bid has been

made." Transporter shall post notice of withdrawal on its

Designated Site as soon as possible, but in no event more than one

Business Day, following receipt of such notice.