Kern River Gas Transmission Company

Second Revised Volume No. 1

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

First Revised Sheet No. 853 First Revised Sheet No. 853 : Effective

Superseding: Original Sheet No. 853

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 6 - RATES (Continued)

6.6 Determination of Alternate Rates. (Continued)

Quantity of gas in Dth that Transporter is obligated to

transport at that rate until the sum of such Quantities

equals or first exceeds Shipper's DMDQ; provided, however,

that, to the extent that the maximum Quantity of gas

Transporter is obligated to transport at the last such rate

to be multiplied exceeds Shipper's DMDQ when added to the

sum of the Quantities theretofore multiplied, such last

maximum Quantity shall be reduced to equal the difference

between Shipper's DMDQ and the sum of the Quantities

theretofore multiplied. The summation of the products that

result from the multiplication of each such

demand/reservation component of a rate on Shipper's

Alternate Rate List by the maximum Quantity associated with

that rate shall then be divided by Shipper's DMDQ to yield

the reservation component (if any) of Shipper's Weighted

Average Alternate Rate. The summation of the products that

result from the multiplication of each such commodity/usage

component of a rate on Shipper's Alternate Rate List by the

maximum volume associated with that rate shall then be

divided by Shipper's TMDQ to yield the commodity component

(if any) of Shipper's Weighted Average Alternate Rate.

during any Contract Year after the third Contract Year, any

existing rate contained in Shipper's Alternate Rate List

ceases to be effective or is changed, then such rate shall

be deleted from Shipper's Alternate Rate List. If, during

any Contract Year after the third Contract Year, any rate

discount from any Available Rate Schedule provided by

Transporter, or any rate for Firm Service on Transporter's

System, becomes effective or is modified, then Shipper shall

have the right to amend Shipper's Alternate Rate List by