Initial Decision Finds Trans Alaska Pipeline System (TAPS) Carriers Imprudently Incurred Costs of Strategic Reconfiguration Project; Addresses General Imprudence Standards Applied to Oil Pipeline Development Projects

摘要

A voluminous Initial Decision issued on February 27 brings to FERC’s attention an inquiry that involves determining whether the Trans Alaska Pipeline System (TAPS) Carriers (BP Pipelines (Alaska), Inc., et al., IS09-395 et al.) prudently incurred the costs of the Strategic Reconfiguration (SR) project. If SR costs were prudently incurred they can be included in the 2009 and 2010 rates. Alternative theories of disallowance of the SR costs are at issue. Additionally, cost of service items in the 2009 and 2010 filed rates are also challenged. The Initial Decision (ID) effectively concludes that SR project expenses were not prudently incurred. The Carriers, who have the ultimate burden of proof, failed to meet their burden and failed to prove that the costs were prudent. The evidence in this case proves the Carriers sanctioned the project with insufficient engineering.