Flint Hills Resources Alaska, LLC v. FERC, No. 08-1270

FERC Oil Pipeline Order Affirmed

In Flint Hills Resources Alaska, LLC v. FERC, No. 08-1270, a petition for review of the Federal Energy Regulatory Commission's orders finding certain oil pipeline rates filed for 2005 and 2006 to be unjust and unreasonable, but not discriminatory or unduly preferential, the court denied the petition where: 1) by the time of the ratemaking settlement agreement at issue, any reasonable investor would have abandoned any hopes in the valuation methodology; 2) the Commission's alleged miscalculation had no impact on the rates and refunds at issue here; and 3) it was unclear how a non-shipper complainant, with interests such as those of the state of Alaska, could show competitive injury.

As the court wrote:  "For many years the oil pipeline companies owning and operating the Trans Alaska Pipeline System ("TAPS") charged shippers rates based on a 1985 settlement agreement between them (initially six of the carriers, but ultimately all eight) and the state of Alaska. (Alaska's anticipation of royalties and tax receipts gave it a stake in the matter; the shippers in the early years, by contrast, were largely affiliates of the pipeline companies, and so had little adversity of interest.)"

Related Resources

• Read the D.C. Circuit's Decision in Flint Hills Resources Alaska, LLC v. FERC, No. 08-1270