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RCA schedules conference on tariffs Conference to cover confidentiality; RCA still deliberating on requests to join case; ConocoPhillips responds to Tesoro claims Eric Lidji Petroleum News
As the Regulatory Commission of Alaska prepares for hearings next year to decide whether to increase intrastate tariffs on the trans-Alaska oil pipeline, it is scheduling a pre-hearing conference with the goal of streamlining the possibly complicated case.
The conference will include discussions of how to handle financial information requested as confidential by ConocoPhillips, but crucial to judging the fairness of the proposed rates. ConocoPhillips is requesting a 55 percent increase to in-state shipping fees.
The RCA approved those rates on an interim and refundable basis starting Nov. 1, and scheduled hearings on the proposed rates starting June 15 and running through July 2.
The RCA has yet to name the parties to the case, but six companies have asked to join.
The tariffs on the trans-Alaska oil pipeline touch many players in the Alaska oil industry, impacting the balance sheets of the companies that own the pipeline, the margins of the oil refineries in Alaska, and the royalty values and production taxes collected by the state.
ConocoPhillips is currently the sole party in the case, but the RCA is considering requests from Exxon and Unocal, two of the five pipeline owners, as well as Tesoro, Flint Hills Resources and PetroStar, the companies with Alaska refineries, and the Attorney General.
ConocoPhillips asked for certain pieces of its testimony to remain confidential. The state and Tesoro have asked the Regulatory Commission of Alaska to set up guidelines for parties in the case to review that confidential material in order to make their cases.
Conoco responds to Tesoro Although not officially a party to the case yet, Tesoro recently protested the rate increase.
ConocoPhillips responded on Nov. 13 to many of the claims made by Tesoro on Oct. 24.
Those claims challenged the pipeline volumes, depreciation figures and revenue requirements ConocoPhillips used to calculate its proposed intrastate rate increase.
Tesoro argued that while the pipeline is moving fewer total barrels of oil today than in 2000, it is moving the same or more barrels to the in-state markets covered by the tariff.
ConocoPhillips said it was “inappropriate” to focus simply on intrastate volumes because the methodology for calculating rates involves a “uniform rate” that spreads the total costs associated with the pipeline across the total throughput coming down the line.
ConocoPhillips also challenged a claim from Tesoro that the depreciation rates on the pipeline should be calculated through 2075, as opposed to the 2034 date preferred by ConocoPhillips or the 2026 date currently in effect. A later date would lower rates.
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