RCA accepts 42 cent rate for Swanson line

The Regulatory Commission of Alaska has accepted an agreement between the Swanson River Oil Pipeline, the Office of the Attorney General’s Regulatory Affairs and Public Advocacy Section, Kenai Pipeline Co. and Tesoro Alaska Co. resolving some issues, including acceptance of a 40 cents per barrel rate for shipment on the line beginning March 1 and an increase to 42 cents per barrel beginning Nov. 1.

While KPL and Tesoro are not parties to the settlement between Swanson River and RAPA, RCA said they filed non-opposition to the Oct. 17 agreement. The commission said KPL and Tesoro previously agreed they would not challenge any rates unless and until they are shippers on the line.

The line runs from the Swanson River field on the Kenai Peninsula to a tie-in point with KPL facilities at the Nikiski Marine Terminal.

RCA accepted the 40-cent rate as permanent; the 42-cent rate is temporary and subject to a refund of any difference between that rate and a final rate.

The commission said the companies requested in August when agreement on the 40-cents per barrel rate was reached that the docket, which dates from 2015, be held in abeyance until the end of the year so settlement negotiations can continue. Some but not all of the issues between the parties were resolved earlier in the year.

Discussions began when Swanson River applied in 2015 to operate under a simplified pipeline tariff of 68 cents per barrel, an increase from the 8.9-cent rate established in 1992.

In the Oct. 17 filing Swanson River withdrew its petition requesting it be qualified for simplified tariff treatment.

- KRISTEN NELSON