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Third Revised Sheet No. 839 Third Revised Sheet No. 839 : Superseded

Superseding: Second Revised Sheet No. 839

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 5 - CAPACITY RELEASE PROGRAM (Continued)

5.10 Invoicing and Payment. (Continued)

Any Base Shipper which receives such refunds or credits shall be

solely responsible for determining what portion, if any, of such

refunds or credits must be additionally refunded to any and all

Releasing Shippers and Replacement Shippers who received directly

or indirectly a release of Transportation rights under such

Shipper's Base Transportation Service Agreement.

5.11 Further Conditions on Release of Transportation Rights.

(a) Any party participating in the Release program set forth in this

Article 5 agrees to be bound by and shall comply with the terms

and conditions of this Tariff, and all applicable Commission

rules, orders and regulations.

(b) All terms and conditions in all Release Requests must be

objectively stated, applicable to all potential Bidders and

nondiscriminatory.

term shall be the remaining term of the relevant Firm

Transportation Service Agreement, or the remaining term of firm

transportation service provided under the relevant Released

Transportation Service Agreement as determined in accordance with

the Release Term of all effective Exhibits "RS" and Exhibits "RP"

thereto, as may be revised from time to time. The minimum DMDQ

for any Release shall be 500 Dth per Day and the maximum DMDQ

shall be the maximum DMDQ set forth in the Releasing Shipper's

Service Agreement, as revised from time to time in accordance with

any and all effective Exhibits "RS" and Exhibits "RP" thereto.

(d) The maximum rates paid by the Replacement Shipper for service

under any Release shall be the maximum Tariff Reservation Rate and

Tariff Reservation Surcharges, and maximum Tariff Usage Rate and

Tariff Volumetric Surcharges, as well as all other applicable