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RCA, FERC planning summer hearings
State and federal regulators plan to hold another round of concurrent hearings this summer to continue discussing ratemaking practices on the trans-Alaska oil pipeline.
The Regulatory Commission of Alaska and the Federal Energy Regulatory Commission have agreed to hold Phase II of the ongoing hearings in Anchorage from July 10 until July 19 and then move to Washington, D.C., from July 23 until the end of the hearing.
The hearings generally concern whether and how to incorporate costs associated with the Strategic Reconfiguration process into the rates that shippers pay to use the pipeline.
Three major issues Early on, regulators split the proceeding into two phases, the first dealing with issues of prudence in Strategic Reconfiguration spending and the second dealing generally with three major issues. The first, and largest in term of witnesses and testimony, is determining the economic life of the pipeline. The second involves a dispute between the owners of the pipeline and interested third parties about the standards to determine whether a specific cost should be included in rates. The third is the appropriate level of ad valorem taxes to include in rates, an issue that could ultimately have the greatest impact on rates. The hearings will also cover smaller issues not considered as controversial.
The two regulatory bodies have been meeting concurrently for months because of the similarity of the issues currently at play in both interstate and intrastate ratemaking.
Although the case is taking longer than expected, the proceeding is “ripe for settlement,” one of the administrative law judges on the case said in a filing this past December.
—Eric Lidji
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