FERC denies rehearing request on pooling

The Federal Energy Regulatory Commission issued an order June 30 denying a rehearing request filed in December by three owners of the trans-Alaska oil pipeline. The carriers — ConocoPhillips Alaska, ExxonMobil Pipeline Co. and Unocal Pipeline Co. — sought the rehearing in December because they objected to a Nov. 20, 2008, order in which the federal agency directed all five pipeline owners to come up with a more effective way to pool revenue in order to develop uniform interstate rates to charge shippers for transporting oil through the 800-mile conduit.

FERC had earlier concluded that “pooling” would address any concerns about under- or over-recovery of tariffs resulting from its June 2008 order requiring the carriers to develop an alternative method for calculating shipping rates. The agency had found earlier that the existing methodology for establishing tariffs on the pipeline “no longer resulted in just and reasonable rates.”

The three carriers argued that the federal agency did not have the authority to order them to adopt a “more inclusive pooling” method.

BP Pipelines (Alaska) Inc. and Koch Pipelines (Alaska) LLC did not object to the pooling order.

In denying the rehearing request, the commission also clarified that the pooling mechanism that the carriers develop should “reallocate all of TAPS Carriers’ costs based on throughput or usage, so that the allocation of costs matches the allocation of revenues on TAPS.”

“Beyond this, the Commission will not dictate the particulars of the pooling mechanism, as the TAPS carriers, including BP, are in a better position to work out the details of such an arrangement themselves.” The commission will have an opportunity to consider the appropriateness of the pooling provision when it is submitted in the above-mentioned tariff filing, FERC added.

—Rose Ragsdale