Material purchases, transfers and dispositions by a lessee
for use on a NPSL must be priced according to the following standards:
(1) Material purchased must be charged at the
price paid by lessee after deduction of all discounts received. In case of
material found to be defective or returned to a vendor for any other reason,
credit must be passed to the appropriate account when adjustment has been
received by the lessee.
(2)
Material transferred within the NPSL operations and material transferred from
the NPSL operations or disposed of by the lessee must be priced at average
warehouse stock prices. Transfers will be priced at current-condition value
using average warehouse stock prices if they are available and reasonably
representative of current market price. If they are not available or are not
reasonably representative of current market price, the following applies.
Material transferred must be priced at current-condition value replacement cost
effective at date of transfer as specified in paragraph (3) of this section
which must include material invoice cost, labor supplies, transportation, and
material handling charges associated with getting material FOB to the NPSL
property.
(3) Material required for
operation must be purchased for direct charge to the NPSL account whenever
practical. However, under circumstances where it is most practical for lessee
to furnish materials from lessee's storehouse or other properties located in
Canada, Alaska, or the continental United States, those material movements are
subject to the following:
(A) New material is
classified as Condition "A" and must be priced as follows:
(i) Tubular goods, except line pipe involving
movements for less than 30,000 pounds, must be priced at the current price in
effect on date of movement on a maximum carload or barge load weight basis,
regardless of quantity transferred, equalized to the lowest published price FOB
railway receiving point, recognized barge terminal, or air cargo receiving
point nearest the NPSL where that material is normally available.
(ii) Line pipe involving movement of less
than 30,000 pounds must be priced at the current price in effect at date of
movement, as listed by a reliable supply store nearest the NPSL where such
material is normally available. Movement of 30,000 pounds or more must be
priced under provisions of tubular goods pricing in (i) of this
subparagraph.
(iii) Other material
must be priced at the current new price in effect at the date of movement,
listed by a reliable supply store or FOB railway or air cargo receiving point
nearest the NPSL where that material is normally available.
(iv) The NPSL account will not be credited
with cash discounts applicable to prices provided for in paragraph (3) of this
section.
(B) Used
material is classified as either Condition "B" or "C" and must be priced as
follows:
(i) Material in sound and serviceable
condition and suitable for reuse without reconditioning moved to the NPSL, must
be classified as Condition "B" and priced at 75 percent of the current price of
new material.
(ii) Material in
sound and serviceable condition and suitable for reuse without reconditioning
moved from the NPSL must be classified as Condition "B" and priced at 75
percent of current new price if material was originally charged to NPSL account
as new material, or at 65 percent of current new price if material was
originally charged to the NPSL account as used material at 75 percent of
current new price.
(iii) Material
which is not in sound and serviceable condition and not suitable for its
original function until after reconditioning must be either classified as
Condition "B" and priced at 75 percent of the current price of new material
when the cost of reconditioning is to be absorbed by the transferor or
classified as Condition "C" and priced at 50 percent of current price of new
material when the cost of reconditioning is to be charged to the transferee,
provided Condition "C" value, plus cost of reconditioning, does not exceed
Condition "B" value.
(iv) Obsolete
material or material which cannot be classified as Condition "B" or Condition
"C" must be priced at a value commensurate with its use or at prevailing
prices. Material no longer suitable for its original purpose but usable for
some other purpose must be priced on a basis comparable with that of items
normally used for those other purposes.
(C) Loading and unloading costs may be
charged to the appropriate NPSL account only at the rate of 25 cents per
hundred weight on all tubular goods movements, in place of loading and
unloading costs sustained when actual hauling costs of those tubular goods are
equalized under
11 AAC 83.243(8).
(D) Material involving erection costs must be
charged at applicable percentage of the current knocked-down price of new
material.
(E) The pricing and
origination point of that material must be FOB a reliable supply store or
railway, barge terminal, or air cargo receiving point nearest that lessee's
storehouse from which the material is furnished.
(4) Whenever material is not readily
obtainable at published or listed prices because of national emergencies,
strikes or other unusual causes over which the lessee has no control, the
lessee may charge the appropriate NPSL account for the required material at the
lessee's actual cost incurred in providing that material, in making it suitable
for use and moving it to the NPSL.
(5) In case of defective material, credit may
not be passed to the appropriate NPSL account until adjustment has been
received by the lessee from the manufacturers or their agents.
