Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Original Sheet No. 845 Original Sheet No. 845 : Effective

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 6 - RATES (Continued)

6.2 Shipper's Negotiated Rate. (Continued)

change in the level of the maximum rates of any Available Rate

Schedules, or the effective date of any new Available Rate

Schedule, Shipper's Negotiated Rate shall become equal to the

maximum rate or rates contained in the Available Rate Schedule

from which Shipper selects at the time; provided, however, that

Transporter and Shipper may negotiate a mutually agreeable

discount from such maximum rate or rates. Until such time as

Shipper selects a different Available Rate Schedule, Shipper's

Negotiated Rate shall be determined in accordance with any valid

orders of the FERC respecting the effective dates and level of,

and refunds from, the rates in the Available Rate Schedule

selected by Shipper. 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 is a Time-

Based Rate, then the rate shall be adjusted using the applicable

adjustment(s) in Sections 6.6.2, 6.6.3 and/or 6.6.4.

6.3 Firm Service. As used in this Article 6, "Firm Service" shall include

any and all varieties of transportation service offered by Transporter

that include the receipt of gas into Transporter's System in the

Overthrust Area and the delivery of gas within the geographical

boundaries of the State of California, provided that such service is

firm (i.e., is not subject to interruption), and is for a contract term

of at least one year.

6.4 Alternate Rate. As used in this Rate Schedule and the Firm

Transportation Service Agreement, an "Alternate Rate" shall be the

Weighted Average Alternate Rate or Single Alternate Rate, (as

hereinafter defined), for Firm Service provided or offered by

Transporter to any shipper.

6.5 Selection of Shipper's Rate. Subject to the frequency limitations and

procedures described below, Shipper shall have the right to select as

Shipper's Rate, to be applicable to all quantities of gas transported

hereunder, one of the following optional rates: