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Simplified pipeline tariff regulations issued
Kristen Nelson Petroleum News
After several years of work with industry, the Regulatory Commission of Alaska has adopted simplified tariff procedures in an attempt to reduce regulatory burdens for small, producer-owned pipelines.
The docket was opened in December 2005 to address the issue of whether RCA should establish two or more classes of pipelines and decrease regulatory oversight for one or more of those classes. RCA said that the initial consideration was whether regulation could be reduced for small producer-owned pipelines that ship only the producer’s product.
After public hearings and workshops to consider a proposal from industry, the proposal “evolved into a simplified tariff filing process.” RCA said the regulations it adopted “incorporate an optional simplified tariff filing process for pipelines that meet certain criteria” as well as setting parameters for rates and rules filed under the simplified process.
The proposed regulations were supported by BP Pipelines (Alaska) and BP Transportation (Alaska), Marathon oil Co. and Tesoro Alaska Co.
RCA allowed interested parties to file proposed regulations and BP and Marathon did so in 2006. Public workshops were held to consider the proposed regulations in early 2007; draft regulations were proposed in March. After drafting changes, public workshops to discuss proposed revisions were held beginning in August and continuing through the end of October. RCA then requested public comments.
BP, Marathon and Tesoro supported the regulations.
BP told the commission it believes providing the optional, less complicated path to tariff approval would likely reduce protests.
Marathon said the regulations simplify ratemaking for small production-related pipelines.
Tesoro said the new regulations permit routine rate and tariff filings to be made under simplified assumptions.
Not good for NNGP Concerns of the North Slope Borough, doing business as Nuiqsut Natural Gas Pipeline, are not addressed in the regulations. NNGP, which provides natural gas for Nuiqsut, said the Nuiqsut pipeline has unique characteristics and it doesn’t fit neatly into the same class as other pipelines to which these regulations would apply.
The Nuiqsut pipeline transports natural gas from the Alpine field to Nuiqsut, where the gas is used as fuel to generate electricity and for domestic and commercial consumption.
RCA said that because of unique characteristics of the Nuiqsut pipeline, “NNGP’s comments focused on difficulties it may encounter when attempting to use the simplified tariff filing procedures, stating concerns about the accounting/ratemaking requirement in the regulations, and the difficulties it would have in complying with expansion requirements.”
The commission said that while it recognizes the regulations may not meet the needs of NNGP, “we believe these regulations provide an optional simplified tariff filing process for pipelines seeking a less burdensome regulatory process. We have pursued several public meetings and workshops to craft this regulatory proposal, and are not in a position to allow further comment on proposed revisions at this stage of the regulations process.”
The commission said it could open another regulations docket to invite comments on amendments to accommodate NNGP’s concerns; NNGP could file under the simplified tariff filing provisions and request waivers on specified provisions; or NNGP could file under standard tariff procedures and request waivers.
RCA adopted the regulations Feb. 29 in order No. 11 for docket R-05-11.
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