Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Original Sheet No. 824 Original Sheet No. 824 : Superseded

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 5 - CAPACITY RELEASE PROGRAM (Continued)

5.5 Bidding for Transportation Rights.

(a) Any party that desires to become a Prearranged Bidder or Bidder,

or to otherwise acquire a Release pursuant to this Article 5, must

pre-qualify with Transporter by entering into a Released

Transportation Service Agreement with Transporter, after first

satisfactorily demonstrating sufficient creditworthiness in the

same manner and subject to the same terms and conditions as

required for firm Shippers under Section 7 of Rate Schedule KRF-1.

The creditworthiness requirement shall be continuing in nature

with respect to the Release in the same manner and to the same

extent as prescribed for firm Shippers under Section 7 of Rate

Schedule KRF-1, and shall apply with respect to any and all

Releases desired by a potential Replacement Shipper. No potential

Replacement Shipper shall be entitled to receive any released firm

transportation service rights pursuant to this Article 5 for which

it has not first satisfactorily demonstrated sufficient

creditworthiness with Transporter. Any satisfactory guarantee

provided by the Releasing Shipper or by any third party on behalf

of a potential Replacement Shipper in accordance with this Article

5 and Section 7 of Rate Schedule KRF-1 must provide, without

limitation, that the Guarantor will guarantee all financial

obligations of the Replacement Shipper under its Released

Transportation Service Agreement with respect to the Release.

(b) Bidders may submit bids only during the Bidding Period applicable

to a Release Request. A Bidder may not simultaneously submit

multiple bids for the same Release. All bids shall be submitted

via Transporter's Designated Site on the Internet, and shall

comply with and otherwise be subject to all terms and conditions

set forth in the Release Request. All bids shall contain the

following information for each Release Request:

(i) the Bidder's legal name, address, Released Transportation

Service Agreement number, Dunn and Bradstreet number, as

well as the name, telephone number, and fax number of the

person to contact concerning the bid;