RCA approves Unocal rate increase

State regulators have approved Union Oil Co. of California’s 22 percent increase to the rate it charges producers to use the trans-Alaska oil pipeline to ship to markets in Alaska.

The Regulatory Commission of Alaska approved the temporary increase on a refundable basis, effective April 1, while it studies whether a permanent increase is justified.

The RCA also added the case to a consolidated 11-docket proceeding that includes three years worth of temporary rate increases from four of the five owners of the pipeline.

Under the new rates, Unocal is now charging $3.07 to ship a barrel of oil from the North Slope to North Pole, up from $2.53 per barrel, and about $4.83 to ship to Valdez, depending on the final destination, up from about $3.94 per barrel. (There are two off-take points in Valdez: the PetroStar refinery and the Valdez Marine Terminal.)

The RCA also allowed Unocal to base its rates on a 2009 test year. Unocal said it didn’t have enough information to use 2010 as a test year. Tesoro, which operates refining operations in Alaska, said the RCA should have forced Unocal to wait for that data.

Unocal said the increase would generate an additional $500,000 in revenue each year.

The RCA and the Federal Energy Regulatory Commission, which oversees aspects of the pipeline dealing with interstate commerce, plan to hold joint hearings covering a variety of shipping rates related issues later this year, from October to January 2012. The hearings primarily concern whether and how to include the cost of the Strategic Reconfiguration upgrade project into the shipping rates charged by the owners of the line.

—Eric Lidji