Kern River Gas Transmission Company

Second Revised Volume No. 1

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

Second Revised Sheet No. 862 Second Revised Sheet No. 862 : Effective

Superseding: First Revised Sheet No. 862

RATE SCHEDULE SH-1

Kern River Firm Transportation Services

(Continued)

ARTICLE 9 - FORCE MAJEURE (Continued)

9.3 Monthly Reservation Charge Adjustments. (Continued)

(i) the Quantity of gas tendered for Transportation by

Shipper at all Primary Receipt Points, that

Transporter was unable to receive at such points

and/or to deliver at a Primary Delivery Point

requested by Shipper, divided by Shipper's DMDQ,

expressed as a percentage; or

(ii) 7% in Contract Years 1-5

11% in Contract Years 6-10

15% in Contract Years 11-15

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

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

rate" (i.e., one which is partly based 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