Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 05/01/2002, Docket: RP01-190-002, Status: Effective

First Revised Sheet No. 851 First Revised Sheet No. 851 : Effective

Superseding: Original Sheet No. 851

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 6 - RATES (Continued)

6.6 Determination of Alternate Rates. (Continued)

AR=(A.B.)+C

where,

AR = Adjusted Rate to be utilized to determine Shipper's

Alternate Rate

A = Identified mileage component of the mileage-based rate on

Transporter's Rate List

B = Shipper's Mileage

C = Identified non-mileage components, if any, of the mileage-

based rate on Transporter's Rate List

The term "Shipper's Mileage" used in the above formula shall equal

the difference between (i) the weighted average (with the

weighting based on the proportion of the Delivery Point

Entitlement at each Delivery Point to the sum of all Delivery

Point Entitlements) of the distances in pipeline miles from the

northernmost point on Transporter's System to each Delivery Point

and (ii) the weighted average (with the weighting based on the

proportion of the Receipt Point Entitlements at each Receipt Point

to the sum of all Receipt Point Entitlements of the distances in

pipeline miles from the northernmost point on Transporter's System

to each Receipt Point. If a mileage-based rate on Transporter's

Rate List employs pipeline mileage units then the distance

calculated from (i) and (ii) above shall be stated in terms of

such pipeline mileage units by dividing the number of pipeline

miles in such distance by the number of pipeline miles in each

pipeline mileage unit. The distance so calculated shall be

adjusted, if necessary, to reflect the manner in which such

pipeline mileage units are applied under such mileage-based rate.