Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 10/01/2002, Docket: RP02-482-000, Status: Effective

Second Revised Sheet No. 829 Second Revised Sheet No. 829 : Superseded

Superseding: First Revised Sheet No. 829

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 5 - CAPACITY RELEASE PROGRAM (Continued)

5.6 Determination of Successful Bidder. (Continued)

value, then the Release shall be awarded to that Bidder, subject

to any Prearranged Bidder's exercise of its right of first refusal

as set forth above.

(d) If two or more Bidders have submitted bids which each reflect the

highest value, then, subject to any Prearranged Bidder's exercise

of its right of first refusal, the Release will be awarded on the

basis of a lottery which is limited to such Bidders. The winner

of the lottery shall be awarded the Release to the extent of the

DMDQ for which it has submitted a bid. Transporter will conduct

the lottery in an objective, nondiscriminatory manner.

Transporter's calculation of the applied methodology and lottery

shall result in only one successful Bidder per Release Request.

(e) Transporter shall post on its Designated Site for a period of ten

Business Days the terms of the successful bid and the identity of

the successful Bidder in accordance with the relevant periods of

time set forth in Article 5.8 of this Rate Schedule.

5.7 Exhibit "RP" and Exhibit "RS".

(a) Prior to the date of commencement of the Release Term as specified

by the successful Bidder, Transporter shall prepare and transmit

to the successful Bidder an initial Exhibit "RP" to its Released

Transportation Service Agreement in the form set forth in this

Tariff stating all applicable terms and conditions of the Release,

including without limitation the DMDQ and associated TMDQ, Release

Reservation Rate, Release Reservation Surcharges, Total Release

Reservation Charge, usage rate, volumetric surcharges, any and all

other applicable rates, charges and surcharges, Release Term,

Receipt Point Entitlements at any and all of the Replacement

Shipper's specified Primary Receipt Points and Delivery Point

Entitlements at any and all of the Replacement Shipper's specified

Primary Delivery Points. An initial Exhibit "RS" in the form set

forth in this