RCA extends CPAI in-state rate increase

State regulators are allowing ConocoPhillips to continue collecting increased shipping rates on the trans-Alaska oil pipeline indefinitely while a larger rate case unfolds.

ConocoPhillips asked the Regulatory Commission of Alaska in 2009 for permission to increase the rate it charged to move oil through the pipeline to Alaska markets.

The RCA initially approved those rates on a six-month temporary basis, subject to refunds, and in early 2010 gave ConocoPhillips another year to collect the higher rates.

Now, the RCA is extending that increase indefinitely, although still subject to refunds.

The reason is that the increase is one of 11 similar cases that the RCA combined into a single case. That consolidated docket is the subject of upcoming concurrent hearings with the RCA and its federal counterpart, the Federal Energy Regulatory Commission.

Those hearings, scheduled to begin on Oct. 31, concern whether the five companies that own shares of the 800-mile pipeline can include the cost of a major upgrade project in shipping rates. That project, called Strategic Reconfiguration, is past due and over-budget, but is believed to be necessary for improving pipeline operations in the future.

The five companies that own undivided shares of the pipeline are subsidiaries of BP, ConocoPhillips, ExxonMobil, Koch and Union Oil Company of California. All of those companies except for BP have requested several in-state rate increases since 2008.

—Eric Lidji