RCA & FERC Hold Concurrent Hearings on Method for Compensating Shippers on the Trans Alaska Pipeline System

Anchorage, AK - The Regulatory Commission of Alaska (RCA) and Federal Energy Regulatory Commission (FERC) are holding concurrent hearings pertaining to the appropriate revised processing cost adjustment to the Heavy Distillate component of the Trans Alaska Pipeline System (TAPS) Quality Bank. The TAPS Quality Bank is a methodology established for making monetary adjustments among shippers to account for the difference between the quality of the petroleum shippers tender and the quality of the commingled petroleum they receive.

The TAPS Quality Bank methodology begins by distilling each of the relevant petroleum streams into specified components. Each of the components is then valued. In the case of the Heavy Distillate component this is done by use of a reference price less a processing adjustment. In a previous proceeding the RCA and FERC jointly determined that the reference price used to value the Heavy Distillate component on the West Coast is Platts’ West Coast spot quote for Los Angeles Pipeline (EPA) Diesel.

Los Angeles Pipeline (EPA) Diesel has a specified sulfur content of 500 parts per million (ppm). An adjustment of 6.4302 cents per gallon is deducted to reduce the sulfur content from 5,000 ppm to 500 ppm to meet the sulfur specification for the referenced product.

Effective June 1, 2006, Platts changed the diesel reference price to an ultra low sulfur diesel with a sulfur content of only 8 ppm. This product is now listed in Platts as ULS (EPA) Diesel. The scope of these concurrent hearings is to resolve issues as to cost elements that increase or change as a result of the more severe processing required to meet the sulfur specifications associated with the new ultra low sulfur diesel price used to value Heavy Distillate.

The hearing is expected to conclude on Wednesday, July 18.

For further information, visit the RCA’s website at Regulatory Commission of Alaska Home Page to get further information by looking at RCA docket P-06-10 via the RCA’s data page search, available through the above link.

Press Release: RCA & FERC Hold Concurrent Hearings on Method for Compensating Shippers on the Trans Alaska Pipeline System
Date Issued: 7/17/2007