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Conoco, Exxon TAPS tariffs on hold
Kristen Nelson Petroleum News
The Regulatory Commission of Alaska has suspended tariffs filed by ConocoPhillips Transportation Alaska and ExxonMobil Pipeline Co. for the trans-Alaska oil pipeline and established temporary intrastate rates equal to the filed rates, but subject to refund with interest.
Both companies filed reduced intrastate rates.
ExxonMobil proposed rates of $3.74 per barrel to North Pole, $5.86 per barrel to the Valdez Marine Terminal and $5.83 per barrel to the Petro Star Refinery connection in Valdez. RCA said ExxonMobil’s current rates are $4.09 to North Pole, $6.44 to the Petro Star Refinery connection in Valdez and $6.47 to the Valdez Marine Terminal. The commission said the proposed rates are based on a 2013 test year.
ConocoPhillips proposed the same new rates as ExxonMobil, also using a 2013 test year. ConocoPhillips’ current rates are $4.32 to North Pole, $6.84 to the Petro Star Refinery in Valdez and $6.87 to the Valdez Marine Terminal.
P-97-004 (151) The commission had established “uniform, cost-based rates” to the three in-state delivery points in a decision on 1997-2000 rates, P-97-004 (151), a decision affirmed by the Alaska Superior Court and ultimately by the Alaska Supreme Court.
In a proceeding on post-2000 rates, the commission determined that “the just and reasonable rates” established in that order should remain in place until new rates were approved.
As the companies filed subsequent rates, those were suspended and the dockets for revised tariff filings using test years of 2007, 2008 and 2009 were consolidated and concurrent hearings held with the Federal Energy Regulatory Commission, which regulates interstate rates.
Subsequent files have also been suspended.
In its current filing, the commission said ExxonMobil asserted that the purpose of the filing was to update the company’s intrastate rates using the methodology in Order 151 and current information on costs and throughput. The commission described ConocoPhillips’ filing using the same language.
In both cases the commission said it was establishing “temporary rates equal to the filed rates because the filed rates were purportedly calculated under the Order P-97-004(151) methodology.”
Tesoro objects Tesoro Alaska Co., through its counsel, Brena, Bell & Clarkson P.C., filed a formal complaint and protest to both filings.
Tesoro does not protest the reduction in rate, the filing said in both responses, but called the new rate “unjust and unreasonable because it includes, among other items: faulty adjustments to throughput; improper treatment of owner-direct costs, including ad valorem costs related to prior periods; failure to support affiliate costs; and unreasonable and imprudently incurred costs” for the strategic reconfiguration project which Alyeska Pipeline Service Co. has been implementing.
The complaint referenced RCA’s “last approved tariff for shipments to the Valdez Marine Terminal” of $1.96 per barrel and FERC’s last approved rate of $3.93 per barrel, and said at $5.86 per barrel, the new requested rate, the “total revenue requirement is out of line and disproportionately distributed in intrastate ratepayers.”
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