State looks to settle TAPS tariff cases

The state of Alaska has agreed to settle trans-Alaska Pipeline tariff cases. The tariff is what pipeline owners charge for shipping North Slope crude down the line. It’s subtracted from the oil’s value, so the higher the tariff, the less the state collects in taxes and royalties. The state disputed TAPS tariffs applied from 2009 through 2015. The legal settlement announced earlier this month, lowers the tariff for those years. Chief assistant attorney general for regulatory affairs and public advocacy, John Ptacin says it will yield the state a windfall.

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”The state’s gonna recognize about $400 million of additional revenue in the form of taxes, royalties and interest as a result of the case being resolved,” Ptacin said.

Ptacin says the agreement doesn’t allow past property taxes to be included in the tariff. Also barred from inclusion are $625 hundred million in costs related to reconfiguring pipeline pump stations, and Ptacin says that will also boost state revenue.

”Over time, we believe that’ll translate into over a billion dollars additional revenue to the state,” Ptacin said.

The settlement, which sets a methodology for TAPS tariff calculation through 2021, was filed with the Regulatory Commission of Alaska and the Federal Energy Regulatory Commission, December 15th.