NEWS BULLETIN

May 17, 2007 --- Vol. 13, No. 46May 2007

FERC judge proposes TAPS tariff be lowered

A Federal Energy Regulatory Commission administrative judge issued an order today that substantially reduces tariff rates from 2005 forward for shipping oil in the trans-Alaska pipeline system, confirming earlier decisions by the Regulatory Commission of Alaska.

“This reaffirms the need to ensure low tariffs on oil and gas lines,” Governor Sarah Palin said in a press release following FERC Law Judge Carmen Cintron’s decision.

“This is why we spent a great deal of time working on structuring the Alaska Gasline Inducement Act (AGIA) to maximize value for the state and ensure low tariffs. We’re pleased with the FERC decision and we look forward to continued progress on this issue,” Palin said.

Cintron's decision proposes TAPS’ shippers receive a substantial refund on rates paid in 2005 and 2006, and that rates going forward be reduced to approximately the rates proposed by shippers Anadarko Petroleum and Tesoro, and the State of Alaska. FERC’s five commissioners are expected to review Cintron's decision and offer a final opinion by the end of the year or shortly thereafter. The state's attorneys are reviewing the decision and preparing to participate in the next phase of the litigation, the governor’s office said.

The state, Anadarko and Tesoro asked FERC to require TAPS to reduce its rates to about $2 a barrel from rates of approximately $3.71 in 2005 and $3.97 in 2006.

The major owners of TAPS are North Slope oil producers BP, ConocoPhillips and ExxonMobil.

Editor’s note: See full story in the May 27 issue of Petroleum News, which will be available online on Friday, May 25, at www.PetroleumNews.com.


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