Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Original Sheet No. 846 Original Sheet No. 846 : Effective

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 6 - RATES (Continued)

6.5 Selection of Shipper's Rate. (Continued)

(i) Shipper's Negotiated Rate, as described in Section 6.2 herein;

(ii) The Weighted Average Alternate Rate, as described in Section 6.6

herein;

(iii) The Single Alternate Rate, as described in Section 6.6 herein.

6.5.1 Selections for First Three Contract Years. At the beginning of

each of the first three Contract Years, Shipper shall have the

right to select any one of the three optional rates described in

Section 6.5 above to be Shipper's Rate. Such rate shall apply to

all transportation service hereunder throughout such Contract

Year; provided, however, that if the FERC permits or requires

Transporter to place into effect any new Available Rate Schedule

or any changes to the level of the maximum rate or rates in an

existing Available Rate Schedule, then, effective as of the

effective date of any such change or new Available Rate Schedule,

Shipper may change Shipper's Rate from either Shipper's Negotiated

Rate to an Alternate Rate, or from an Alternate Rate to Shipper's

Negotiated Rate.

6.5.2 Selections for Subsequent Contract Years. At the beginning of the

fourth Contract Year and each subsequent Contract Year, Shipper

shall have the right to select any one of the three optional rates

described in Section 6.5 above to be Shipper's Rate. The rate so

selected by Shipper shall apply to all transportation service

pursuant to this Rate Schedule and the Firm Transportation Service

Agreement, beginning on the first Day of such Contract Year, and

continuing through the earliest of the following events: (i) the

last Day of such Contract Year, (ii) the last Day preceding the

effective date of any rate change in any existing Available Rate

Schedule or of any new Available Rate Schedule; (iii) the last Day

of the month in which any rate discount from any Available Rate

Schedule provided by Transporter, or any rate for Firm Service on

Transporter's System, becomes effective, is modified, or ceases to