Kern River Gas Transmission Company

Second Revised Volume No. 1

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Effective Date: 02/03/2002, Docket: RP02-137-000, Status: Effective

First Revised Sheet No. 858 First Revised Sheet No. 858 : Effective

Superseding: Original Sheet No. 858




Kern River Firm Transportation Services





8.1 Shipper's Payment. Shipper shall pay Transporter the total charges

indicated on Transporter's invoice by wire transfer or immediately

available funds to a depository designated by Transporter within ten

(10) Days of receipt of Transporter's invoice or the twenty-fifth (25th)

Day of the Month, whichever is later. Such payment shall identify the

invoice number. Subject to the provisions of Section 9.3 hereof,

pertaining to Monthly Reservation Charge Adjustments, Shipper shall make

payment of the Monthly Reservation Charge pursuant hereto in full

irrespective of any dispute relative to the amount invoiced, and Shipper

shall not be entitled to any abatement of such payment or any set-off

against it, including but not limited to, abatement or set-off due or

alleged to be due by reason of any past, present or future claims or

other rights of Shipper against Transporter or any other person or

entity, whether in connection herewith or any unrelated transaction.

Notwithstanding the foregoing, however, nothing herein shall prejudice

in any way Shipper's right to dispute any such amount invoiced,

including (without limitation by such inclusion) any Monthly Reservation

Charge; and Shipper retains all rights and causes of action that may

pertain hereto, including (without limitation) any claims for refund of

all or part of any Monthly Reservation Charge paid hereunder.


8.2 Late Payment. Should Shipper fail to pay the amount of any invoice

rendered by Transporter when such amount is due, unless such failure to

pay is the result of Transporter's error, interest shall accrue on the

amount not paid commencing on the date payment is due and ending on the

date the invoice is paid, at a rate of interest equal to the then

effective rate computed in the manner set forth in Section 154.501(d)(1)

of the FERC's regulations under the Natural Gas Act. If such

regulations become inapplicable to such amounts, the rate shall be

computed on the basis of the prime rate of the Chase Manhattan Bank, NA

or the maximum interest rate otherwise permitted by law or regulation,

whichever is less.


8.3 Overcollections. Should Transporter overcollect by receipt of any

payment by Shipper, interest will accrue on the amount of the

overcollections, commencing on the date of receipt by Transporter of

overcollected funds and ending on the date of repayment of such funds to

Shipper, at a rate of interest equal to the then effective rate computed

in the manner set forth in Section 154.501(d)(1) of the FERC's