HB 277: "An Act relating to the powers of the Regulatory Commission of Alaska in regard to intrastate pipeline transportation services and pipeline facilities, to the rate of interest for funds to be paid by pipeline shippers or carriers at the end of a suspension of tariff filing, and to the prospective application of increased standards on regulated pipeline utilities; allowing the commission to accept rates set in conformity with a settlement agreement between the state and one or more pipeline carriers and to enforce the terms of a settlement agreement in regard to intrastate rates; and providing for an effective date."
00 HOUSE BILL NO. 277 01 "An Act relating to the powers of the Regulatory Commission of Alaska in regard to 02 intrastate pipeline transportation services and pipeline facilities, to the rate of interest 03 for funds to be paid by pipeline shippers or carriers at the end of a suspension of tariff 04 filing, and to the prospective application of increased standards on regulated pipeline 05 utilities; allowing the commission to accept rates set in conformity with a settlement 06 agreement between the state and one or more pipeline carriers and to enforce the terms 07 of a settlement agreement in regard to intrastate rates; and providing for an effective 08 date." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10 * Section 1. AS 42.06.140(a) is amended to read: 11 (a) The commission 12 (1) shall regulate the provision of intrastate pipeline transportation
01 services within the state, including rates, classifications, regulations, practices, 02 and conditions of service, but only to the extent applicable to the delivery of 03 intrastate transportation services [PIPELINES AND PIPELINE CARRIERS IN 04 THE STATE]; 05 (2) may investigate, upon complaint or its own motion, the rates, 06 classifications, rules, regulations, prices, services, and practices [, AND FACILITIES] 07 of pipeline carriers [, AND THE PERFORMANCE OF OBLIGATIONS UNDER 08 AND COMPLIANCE WITH THE TERMS OF LEASES ISSUED BY THE STATE]; 09 (3) may make, prescribe, or require just, fair, and reasonable rates, 10 classifications, regulations, practices, and service [SERVICES, AND FACILITIES] 11 for pipeline carriers; 12 (4) may require pipeline carriers and affiliated interests to file with the 13 commission reports and other information and data required or permitted to be 14 required by other provisions of this chapter; 15 (5) may adopt regulations that are necessary and proper to the 16 performance of its duties under this chapter, including regulations governing practices 17 and procedures of the commission; the regulations may not be inconsistent with state 18 law; 19 (6) shall, during normal business hours, have access to and may 20 designate any of its employees, agents, or consultants to inspect and examine the 21 accounts, financial and property records, books, maps, inventories, appraisals, 22 valuations, and related reports kept by a pipeline carrier, or kept for it by others, that 23 directly affect the interests of the state and directly relate to pipelines located in the 24 state; 25 (7) may initiate, intervene in, and appear personally or by counsel and 26 offer evidence in and participate in [,] any proceedings involving a pipeline carrier [,] 27 and affecting the interests of the state, before any officer, department, board, 28 commission, or court of this state; 29 (8) shall require permits for the construction, enlargement in size or 30 operating capacity, extension, connection and interconnection, or operation [OR 31 ABANDONMENT] of any oil or gas pipeline facility or facilities, subject to necessary
01 and reasonable terms, conditions, and limitations; 02 (9) may prescribe the system of accounts and regulate the service of an 03 oil or gas pipeline facility; 04 (10) shall provide all reasonable assistance to the Department of Law 05 in intervening in, offering evidence in, and participating in proceedings involving a 06 pipeline carrier or affiliated interest and affecting the interests of the state, before an 07 officer, department, board, commission, or court of another state or the United States. 08 * Sec. 2. AS 42.06.230 is amended by adding a new subsection to read: 09 (c) Notwithstanding any other provision of this chapter, the commission does 10 not have jurisdiction over a pipeline carrier with respect to the dismantlement, 11 removal, and restoration of any part of a pipeline facility, or over any amount 12 collected or held by a pipeline carrier for performing dismantlement, removal, and 13 restoration except amounts included in a pipeline carrier's intrastate rates. 14 * Sec. 3. AS 42.06.245 is amended to read: 15 Sec. 42.06.245. Federally regulated carriers. The requirements of this 16 chapter pertaining to permits and certificates of public convenience and necessity do 17 not apply to the construction of a pipeline facility exclusively subject to federal 18 jurisdiction or to the interstate portion of the business of a pipeline or pipeline carrier 19 [EXCLUSIVELY] subject to federal jurisdiction, including rates, tariffs, charges, 20 classification, rules, regulations, terms, and conditions pertaining to the interstate 21 portion of the business subject to federal jurisdiction. However, the requirements 22 of this chapter for permits and certificates of public convenience and necessity do 23 apply to [ALL] the intrastate portion of the business of a pipeline or pipeline carrier 24 subject to federal jurisdiction to the extent the pipeline or pipeline carrier is 25 engaged [WHENEVER IT ENGAGES] in intrastate commerce, including rates, 26 tariffs, charges, classification, rules, regulations, terms, and conditions pertaining 27 solely to the intrastate portion of the business. The commission may not consider 28 revenue collected on interstate transportation when evaluating intrastate rates or 29 tariffs [HOWEVER, NOTHING LIMITS THE POWERS OF THE COMMISSION 30 SET OUT IN THIS CHAPTER EXCEPT TO THE EXTENT THEY ARE 31 PREEMPTED BY FEDERAL LAW].
01 * Sec. 4. AS 42.06.290(a) is amended to read: 02 (a) A pipeline carrier may not [ABANDON OR PERMANENTLY 03 DISCONTINUE USE OF ALL OR ANY PORTION OF A PIPELINE OR] abandon 04 or discontinue any service rendered by means of a pipeline that is the subject of a 05 certificate of convenience and necessity [,] without the permission and approval of the 06 commission, after due notice and hearing, and a finding by the commission that 07 continued service is not required by public convenience and necessity. Any interested 08 person may file with the commission a protest or memorandum of opposition to or in 09 support of discontinuance or abandonment. The commission may authorize temporary 10 suspension of a service or of part of a service. 11 * Sec. 5. AS 42.06.370 is amended by adding a new subsection to read: 12 (d) Rates agreed to or rates set in conformity with a rate methodology agreed 13 to by a pipeline carrier, or by any two or more pipeline carriers jointly, in a settlement 14 agreement with the state are considered to be in the public interest and are 15 conclusively considered just and reasonable under (a) of this section and not unduly 16 discriminatory under AS 42.06.380(a) during the term of the settlement agreement. 17 However, the commission is not prohibited from hearing a protest or petition by the 18 state regarding an intrastate rate charged by a pipeline carrier, or by any two or more 19 pipeline carriers jointly, to the extent that the protest or petition is based on an 20 allegation that the rate does not conform to the terms of a settlement agreement 21 entered into by the carrier or carriers and the state with respect to the intrastate rate. In 22 a hearing under this subsection, the commission is limited to determining whether the 23 challenged intrastate rate conforms to the agreed-upon rate or rate methodology set out 24 in the settlement agreement. 25 * Sec. 6. AS 42.06.400(b) is amended to read: 26 (b) An order suspending a tariff filing may be vacated if, after investigation, 27 the commission finds that it is, in all respects, proper. Otherwise, the commission 28 shall hold a hearing on the suspended filing and issue its order, before the end of the 29 suspension period, granting, denying, or modifying the suspended tariff in whole or in 30 part. If an initial tariff is suspended, the commission shall establish a reasonable 31 temporary tariff. The commission may allow the collection of the filed initial tariff, or
01 it may require collection of the temporary tariff. If the commission allows collection 02 of the filed initial tariff, it shall require the pipeline carrier to place the revenue 03 representing the difference between the filed tariff and the temporary tariff in escrow 04 in a financial institution approved by the commission, and keep accurate accounts of 05 all amounts received, specifying by whom and in whose behalf the amounts are paid. 06 At the end or vacation of the suspension period, the amount, if any, owing to the 07 pipeline carrier from the difference between the temporary tariff and the permanent 08 tariff shall be paid to the pipeline carrier. The surplus, if any, shall be refunded to the 09 persons in whose behalf the amounts were paid into escrow. Funds may not be 10 released from escrow without the commission's prior written consent and instructions 11 to the escrow agent. The commission may allow the pipeline carrier, at the carrier's 12 expense, to substitute a bond or letter of credit in lieu of the escrow requirement. If 13 the commission requires collection of the temporary tariff, it shall require the shipper 14 to place the revenue representing the difference between the filed initial tariff and the 15 temporary tariff in escrow in a financial institution approved by the commission, and 16 require that accurate accounts similar to those specified above in this section be kept 17 by the carrier and the shipper. The person owing shall pay the person owed to the 18 satisfaction of the commission within 30 days after the commission order allowing or 19 setting a permanent tariff. The amount, if any, by which the permanent tariff exceeds 20 the temporary tariff shall be paid by the shipper to the carrier, or, if the temporary 21 tariff exceeds the permanent tariff, the difference shall be paid by the carrier to the 22 shipper, and, in either event, provided that the funds were not placed in escrow as 23 provided by this subsection, the [SUCH] payment shall be made with interest 24 calculated on the balance due at the end of each calendar month at the rate of interest 25 specified in AS 09.30.070(a) [LEGAL RATE, AS DEFINED IN AS 45.45.010(a)]. 26 The commission may allow the shipper, at the shipper's expense, to substitute a bond 27 or letter of credit in place of the escrow requirement. 28 * Sec. 7. AS 42.06.410(a) is amended to read: 29 (a) When the commission, after an investigation and hearing, finds that a rate 30 demanded, observed, charged, or collected by a pipeline carrier for a service, subject 31 to the jurisdiction of the commission, or that a classification, rule, regulation, practice,
01 or contract affecting the rate, is unjust, unreasonable, unduly discriminatory, or 02 preferential, the commission shall determine a just and reasonable rate, classification, 03 rule, regulation, practice, or contract to be observed or allowed in the future and shall 04 establish it by order. An order may not be retrospective in its application. 05 * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 06 read: 07 APPLICABILITY. Sections 1 - 7 and 9 of this Act apply to any matters pending 08 before the Regulatory Commission of Alaska involving pipelines or a pipeline carrier on the 09 effective date of secs. 1 - 7 and 9 of this Act. 10 * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 RETROACTIVITY. Section 6 of this Act is retroactive to August 7, 1997. 13 * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 14 read: 15 CONDITIONAL EFFECT OF SECTION 5. AS 42.06.370(d), enacted by sec. 5 of 16 this Act, takes effect only if Executive Order No. 111 takes effect. 17 * Sec. 11. If, under sec. 10 of this Act, sec. 5 of this Act takes effect, it takes effect 18 immediately under AS 01.10.070(c) or on the effective date of Executive Order No. 111, 19 whichever is later.