Current through February 27, 2024
(a) Rates contained
in an initial simplified pipeline tariff must be less than or equal to rates
computed using
(1) a cost-of-service component
that consists of
(A) total actual annual
operating costs up to and including $10,000,000 and less than or equal to the
sum of
(i) 10 percent of the initial rate base
of $1,000,000 or less;
(ii) 7.5
percent of the initial rate base over $1,000,000 up to and including
$5,000,000; and
(iii) five percent
of the initial rate base over $5,000,000;
(B) an annual depreciation expense calculated
using straight-line depreciation and a 25-year economic life;
(C) a return on rate base equal to the rate
of return specified in (3) of this subsection multiplied by the rate base
specified in (2) of this subsection; and
(D) annual ad valorem taxes based on the mill
rate adopted under
(i)AS
43.56.010 for crude oil and gas pipelines;
or
(ii)AS
29.45.010 for product pipelines;
(2) a rate base
component composed of beginning plant costs less prior accumulated
depreciation, if any, and working capital of 2.5 percent of beginning plant
costs; and
(3) a rate-of-return
component with an overall weighted pretax cost of capital of 14.1
percent.
(b) Total
annual operating costs under (a)(1)(A) of this section must be exclusive of
depreciation and ad valorem taxes.
(c) The rate design for rates contained in a
simplified pipeline tariff must be either a single system-wide rate or
mileage-proportional rates and
(1) if the
carrier is providing common carriage service, the rate design must include a
volumetric rate based on throughput; or
(2) if the carrier is providing firm and
interruptible service, the rate design must include a reservation fee or
similar charge for reservation of capacity complying with
AS
42.06.350(c)(1).
(d) The collection of money for
dismantlement, removal, and restoration is waived for the period the designated
pipeline facility operates under rates contained in a simplified pipeline
tariff. The pipeline carrier may not, through future revised rates, recover any
portion of the dismantlement, removal, and restoration money waived under this
subsection.
(e) The initial
estimated throughput used to calculate rates for a new pipeline facility with
less than 15 months' operating experience must be the estimated average annual
throughput during the first three years of operation. The initial estimated
throughput used to calculate rates for a pipeline facility with 15 or more
months' operating experience must be the actual annual throughput during the
most recent four calendar quarters.
(f) A pipeline carrier collecting rates filed
under 3 AAC 48.200 -
3
AAC 48.410 that proposes to revise its rates by
implementing simplified pipeline tariff rates shall comply with the
requirements of (a), (b), and (c) of this section and the following
requirements:
(1) plant balances, accumulated
depreciation, additions, and retirements shall be based upon
(A) actual beginning plant balances,
accumulated depreciation, additions, and retirements authorized by the
commission to be included in rates; or
(B) in the absence of a specific
authorization by the commission, amounts used to determine rates in the
pipeline carrier's previous rate filings;
(2) undepreciated plant balances must be
depreciated using the straight-line method based on a 25-year economic life
reduced by the number of years the designated pipeline facility was in public
service before the filing of a simplified pipeline tariff.
(g) A pipeline carrier with simplified
pipeline tariff rates in effect may file revised rates below the currently
effective rates without providing information required by
3
AAC 48.466. This subsection does not relieve the
pipeline carrier of the obligation to file revised rates in compliance with (h)
of this section.
(h) A pipeline
carrier with simplified pipeline tariff rates shall file revised rates no later
than first quarter of the third calendar year following the effective date of
the most recent rates filed under (a) of this section.
(i) Revisions to simplified pipeline tariff
rates may be submitted in accordance with
3
AAC 48.275 or this section. Revised rates filed under
this section must be calculated in accordance with (a), (b), and (c) of this
section and the following requirements:
(1)
operating costs for revised rates must be based on initial operating costs,
indexed upward or downward as follows:
(A) the
index is the Producer Price Index for Finished Goods (PPI-FG) using a 1982 base
year, as published by the United States Department of Labor, Bureau of Labor
Statistics (BLS) in the PPI Detailed Report, or equivalent data retrieved from
http://www.bls.gov as Series ID WPUSOP3000;
(B) the operating costs for revised rates are
the initial operating costs, divided by the PPI-FG reported for the month in
which the initial operating costs were filed, multiplied by the PPI-FG
(i) for the month nearest to the date of the
current filing; and
(ii) that is
not identified as preliminary or subject to revision or correction;
(C) each filing that includes an
indexing calculation must
(i) clearly
identify the value and month of the PPI-FG used in each step of the
calculation; and
(ii) include a
copy of each BLS report that was used to obtain the data, or a printout of the
equivalent data retrieved from the BLS website;
(2) property balances for revised rates must
include adjustments, for actual additions and actual retirements including
accumulated depreciation balances, to plant balances, as reflected in the most
recent previous filing under this section;
(3) estimated throughput for revised rates
must be based upon actual throughput for the most recent four calendar
quarters.
Authority:AS
42.06.140
AS 42.06.350
AS 42.06.360
AS 42.06.370
AS 42.06.380
AS 42.06.390
AS
42.06.410
