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. 844 Original Sheet No. 844 : Effective

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 6 - RATES (Continued)

6.2 Shipper's Negotiated Rate. (Continued)

more than one customer or customer class ("Available Rate

Schedule") as such maximum rates exist at the In Service Date. If

the parties fail to otherwise establish the initial Shipper's

Negotiated Rate prior to the Construction Commitment Date, then

the initial Shipper's Negotiated Rate shall be equal to the

maximum authorized rate or rates as of the In-Service Date in

any Available Rate Schedule selected by Shipper. Nothing in this

Section 6.2.1 shall constitute a limitation, restriction or

modification of Shipper's right to select a different Available

Rate Schedule to be Shipper's Negotiated Rate. The initial

Shipper's Negotiated Rate established in accordance herewith shall

be effective as of the In Service Date (subject to Shipper's right

to select an Alternate Rate in accordance with other provisions of

this rate schedule and the Firm Transportation Service Agreement),

and shall continue in effect for at least 30 Days and thereafter

until changed in accordance with Section 6.2.2. If the initial

Shipper's Negotiated Rate is based on a rate in an Available Rate

Schedule, then changes to, and refunds from, such initial

Shipper's Negotiated Rate shall be in accordance with the FERC's

valid orders respecting such Available Rate Schedule. If the rate

contained in an Available Rate Schedule is a mileage-based or zone-

based rate or is otherwise differentiated on the basis of distance

of haul, and/or if such rate is a time-based rate as defined in

Section 6.5.3, then the rate shall be adjusted in the same manner

as provided in Sections 6.6.2, 6.6.3 and 6.6.4. Shipper need not

be a customer to which any such rate schedule is generally

available in order to select such rate schedule as Shipper's

Negotiated Rate.

6.2.2 Changes to Shipper's Negotiated Rate. Transporter may file with

FERC to change the level of the maximum rates in its Available

Rate Schedules at any time, subject only to any limitations

contained in such rate schedules. On the effective date of any