NEWS BULLETIN

November 22, 2010 --- Vol. 16, No. 106November 2010

RCA accepts pipeline tariff deal, ending dispute on Alaska’s Cook Inlet

The Regulatory Commission of Alaska has accepted a tariff settlement between Cook Inlet Pipe Line Co. and a small oil and gas producer, Cook Inlet Energy LLC.

The settlement ends a dispute raised after CIPL filed a 259 percent rate increase for this year, going from $4.06 per barrel of oil to $14.57.

Cook Inlet Energy, which operates wells on the western side of Cook Inlet, complained the rate hike was excessive. CIPL blamed its rate increase on damage to its system resulting from eruptions of Redoubt volcano in 2009.

The two sides negotiated for months, resulting in a proposed settlement filed with the RCA on Oct. 19.

Now the agency has accepted the settlement with an order issued on Friday.

Under the five-year deal, Cook Inlet Energy will pay CIPL a rate of $8 per barrel for the remainder of 2010. In coming years, the rate will be determined by dividing CIPL’s agreed annual revenue requirement of $17.28 million by the total number of barrels shipped through the pipeline.

CIPL, partly owned by Chevron subsidiary Unocal, runs a 42-mile pipeline on the west side of Cook Inlet between Granite Point and the Drift River Oil Terminal, where tankers load.

Miller Energy Resources of Tennessee is Cook Inlet Energy’s parent company.

See story in Nov. 28 issue, available to subscribers online at noon, Friday, Nov. 26, at www.PetroleumNews.com


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