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Original Sheet No. 837 Original Sheet No. 837 : Superseded

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 5 - CAPACITY RELEASE PROGRAM (Continued)

5.10 Invoicing and Payment. (Continued)

(c) If the Replacement Shipper fails to pay all or any portion of any

invoice from Transporter by the date on which payment is due,

Transporter shall send an invoice to the Releasing Shipper for all

unpaid amounts related to the Release Reservation Rate and the

Release Reservation Surcharges, up to the amount of the

reservation rate and reservation surcharges for which the

Releasing Shipper is responsible under the Releasing Shipper's

Service Agreement prior to any Releases thereunder (the "Default

Invoice"). The Default Invoice shall include the amount of any

and all applicable interest charges and penalties related to

nonpayment by the Replacement Shipper of all or any portion of the

Release Reservation Rate and the Release Reservation Surcharges

which have accrued from the date of receipt of Transporter's

invoice by the Replacement Shipper. The Default Invoice shall

also reflect a credit for any and all amounts paid to Transporter

by the Replacement Shipper, including any amounts related to

payment of the Release Usage Rate and Release Volumetric

Surcharges to the extent that the Release Usage Rate and Release

Volumetric Surcharges are less than or equal to the corresponding

usage rates and volumetric charges and surcharges paid by the

Releasing Shipper to Transporter for service under the

Transportation Service Agreement or Released Transportation

Service Agreement, as applicable. The Releasing Shipper shall pay

the amount of the Default Invoice to Transporter within the

applicable period of time prescribed in the Releasing Shipper's

Service Agreement for payment of invoices. The Releasing Shipper

shall be solely responsible for seeking and obtaining

reimbursement for any such payment from the Replacement Shipper;

provided, however, that Transporter shall credit the Releasing

Shipper's next invoice following Transporter's receipt of any

payment by the Replacement Shipper of any amounts reflected in any

Default Invoice which were paid by the Releasing Shipper.