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. 854 First Revised Sheet No. 854 : Effective

Superseding: Original Sheet No. 854

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 6 - RATES (Continued)

6.6 Determination of Alternate Rates. (Continued)

inserting any such new or changed rate at any point in such

list. If any of the events described in this Section

6.6.5(c) occurs, then the Weighted Average Alternate Rate

shall be recalculated to reflect the effect of the above

described revisions to Shipper's Alternate Rate List.

(d) Effect of the Operation of Most Favored Nations Clauses in

Other Agreements. Notwithstanding the foregoing provisions

of (c), if the value selected by Shipper as Shipper's Rate

during any Contract Year solely causes the operation of a

most favored nation or similar provision in another

shipper's transportation agreement that reduces the rate for

Firm Service being paid by such other shipper, such reduced

rate applicable to such other shipper shall not be eligible

for inclusion in Shipper's Alternate Rate List.

6.6.6 Single Alternate Rate. At the beginning of each Contract Year

and whenever the Weighted Average Alternate Rate is recalculated

in accordance with Section 6.6.5(c), Shipper shall specify from

Transporter's Rate List as the "Single Alternate Rate" any rate

provided under any contract entered into by Transporter which has

a DMDQ that is equivalent to at least 60,000 Dth of gas per Day;

provided, however, that the Force Majeure provisions of such

contract shall be substituted in place of those Force Majeure

provisions otherwise provided for in this Rate Schedule and the

Firm Transportation Service Agreement for the period of time in

which a Single Alternate Rate constitutes Shipper's Rate for

services provided hereunder.

6.7 Authorized Overrun Rate.

6.7.1 Prior to In-Service Date. If Transporter transports any Gas for

Shipper prior to the In-service Date, Shipper shall compensate

Transporter therefor at a rate equivalent to the Authorized

Overrun Rate.