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State, carriers settle tariff dispute Alaska reserves right to pursue recovery of strategic reconfiguration costs if FERC ruling is overturned, from 2007 and 2008 rates Rose Ragsdale For Petroleum News
The State of Alaska told the Federal Energy Regulatory Commission March 11 that it was close to settling its differences with owners of the trans-Alaska oil pipeline regarding claims that the carriers incorrectly included the costs of a strategic reconfiguration project in interstate rates charged shippers in 2005 and 2006.
Attorneys representing the state said in an 11-page filing that they were persuaded by the argument the trans-Alaska oil pipeline’s five carriers made in a Feb. 12 filing. BP Pipelines (Alaska) Inc., ConocoPhillips Alaska, ExxonMobil Production Co., Unocal Pipeline Co. and Koch Pipelines (Alaska) LLC argued that the commission’s decision in the tariffs case June 21, commonly referred to as Opinion No. 502, rendered moot the state’s contention that the carriers had overcharged in their rate-setting when they included the strategic reconfiguration costs.
Rates rolled back In Opinion No. 502, FERC essentially rolled back the interstate shipping rates charged in 2005 and 2006 to 2004 levels, thereby nullifying the effects of increases levied for every reason, including strategic reconfiguration project costs.
While the state acquiesced to the carriers’ arguments, it also filed a stipulation to the resulting settlement March 11, telling the commission that it reserved the right to resume pursuit of claims for the strategic reconfiguration costs included in the 2005 and 2006 tariffs if Opinion No. 502 is overturned in any subsequent challenge. The state also stipulated that it reserved the right to continue pursuing claims for strategic reconfiguration costs included in the 2007 and 2008 interstate rates charged by the carriers.
State of Alaska attorneys also noted that all parties to the long-running interstate tariffs case, including Anadarko Petroleum Corp., Tesoro Corp. and Tesoro Alaska Co., Arctic Slope Regional Corp. and Petro Star Inc., Flint Hills Resources Alaska LLC, Williams Alaska Petroleum Inc., and FERC’s trial staff, agreed to the stipulation.
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