|
FERC orders new 2007, 2008 tariff rates Federal agency instructs trans-Alaska oil pipeline owners to develop cost-based tariffs for shippers to replace earlier proposals Rose Ragsdale For Petroleum News
The Federal Energy Regulatory Commission has ordered owners of the Trans Alaska Pipeline System to submit compliance filings calculating interstate tariffs for 2007 and 2008 that shippers must pay to transport oil through the 800-mile conduit and to do so using ratemaking methodology that the federal agency established last June.
The order stems from an ongoing dispute between trans-Alaska oil pipeline owners and shippers over shipping rates. The pipeline system is entering its 32nd year of operation and is expected to continue pumping oil for another 25 years until 2034. The line extends from Alaska’s North Slope to an ice-free port in Valdez.
The commission issued the order Dec. 29, saying it saw no reason to “relitigate the issues determined in Opinion No. 502 setting the (interstate) rates for 2005 and 2006 that are equally applicable here in setting the rates for 2007 and 2008.”
Revised tariffs required The pipeline owners — BP Pipelines (Alaska) Inc., ConocoPhillips Alaska, ExxonMobil Production Co., Unocal Pipeline Co. and Koch Pipelines (Alaska) LLC — have 30 days from the date of the FERC’s order to submit revised tariff proposals for 2007 and 2008.
Once the five pipeline owners make the filings, the shippers and others will have an opportunity to file comments on all relevant issues before the commission establishes rates for 2007 and 2008, and order appropriate refunds.
Last summer, FERC upheld a 2007 administrative law judge decision, concerning interstate rates for the pipeline in 2005 and 2006 that the judge said were “not just and reasonable.” The FERC judge determined that the 2005 and 2006 tariffs should be based on the pipeline owners’ costs rather than a method that had been established in a 1985 court settlement. The change resulted in a significant reduction in the tariffs. The judge also ordered limited refunds.
In Opinion No. 502 issued June 20, 2008, the commission agreed with the judge on all issues, but clarified and modified the decision on certain points. It also directed the pipeline owners to comply with the decision by establishing “just and reasonable” rates for 2005 and 2006. A final decision by FERC on the 2005 and 2006 rates is still pending.
| 