Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 08/01/2004, Docket: RP04-339-000, Status: Effective

Third Revised Sheet No. 848 Third Revised Sheet No. 848 : Effective

Superseding: Second Revised Sheet No. 848

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 6 - RATES (Continued)

6.6 Determination of Alternate Rates. (Continued)

Schedule offered by Transporter; (ii) any rate discount from any

Available Rate Schedule provided by Transporter, regardless of

whether such discounted rate has been reported to or is on file

with the FERC; and (iii) the rates and charges (including, without

limitation by such inclusion, any ACA charges) applicable to Firm

Service on Transporter's System in all agreements, oral or written

or otherwise. Such rates and charges shall be separately stated,

and any waivers of reimbursement of ACA charges shall be

identified. All such rates and charges shall have been adjusted

by Transporter (as appropriate) in accordance with Sections 6.6.2,

6.6.3, and 6.6.4 herein, and shall be expressed on the following

basis:

(i) The demand or reservation component(s), if any, of each such

rate or charge shall be stated in terms of dollars per Day

per Dth of DMDQ of Gas that Transporter is obligated to

transport for a shipper;

(ii) The commodity or usage component(s), if any, of each such

rate or charge shall be stated in terms of dollars per Dth

of Gas received by Transporter for transportation for a

shipper.

As to any rates and charges that were adjusted by Transporter in

accordance with Sections 6.6.2, 6.6.3 or 6.6.4, and/or that were

converted by Transporter from their original form in order to be

expressed as required above, Transporter shall attach to

Transporter's Rate List workpapers that show the original form of

such rates or charges and the calculations by which such

adjustments and conversions were made.