Kern River Gas Transmission Company

Second Revised Volume No. 1

Effective Date: 01/01/2004, Docket: RP04- 68-000, Status: Effective

First Revised Sheet No. 861 First Revised Sheet No. 861 : Effective

Superseding: Original Sheet No. 861

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 9 - FORCE MAJEURE (Continued)

9.3 Monthly Reservation Charge Adjustments. Notwithstanding any of the

foregoing or any other provision to the contrary in this Rate Schedule

or the Firm Transportation Service Agreement, during the time period of

an incident of Force Majeure claimed by Transporter, Shipper's Monthly

Reservation Charge shall be adjusted according to the following:

9.3.1 Initial Force Majeure Periods. During any period of time

commencing with the first Day that Transporter, because of an

incident of Force Majeure, is unable to receive at the Primary

Receipt Points and/or deliver to the Primary Delivery Points all

Gas requested by Shipper to be transported in accordance herewith,

and ending on the earlier of the thirtieth (30th) consecutive Day

of such inability or the last consecutive Day of such inability,

Shipper's Monthly Reservation Charge shall be reduced from what it

would have been in the absence of such Force Majeure for such

period of time as follows:

(a) For any such period of time (or portion thereof) in which

Shipper's rate for service hereunder is a "one-part rate"

(i.e., one which is not based, in whole or in part, on the

actual quantity of Gas transported), Shipper's Monthly

Reservation Charge shall be reduced as follows:

MR = RC x FD x PR

Where,

MR = amount of money by which Shipper's Monthly Reservation

Charge is reduced because of Force Majeure

RC = Shipper's Daily Reservation/Demand Rate (if any),

absent Force Majeure

FD = number of Days in the month on which Transporter's

performance is affected by Force Majeure

PR = the lesser of