State Will Keep Pressing for Fair TAPS Tariff Rates

Press Release

State Will Keep Pressing for Fair TAPS Tariff Rates

Federal ruling increases oil tax and royalty receipts by $440 million

Governor Sarah Palin and Acting Attorney General Rick Svobodny applauded a ruling by the Federal Energy Regulatory Commission (FERC) on protests by the state and Anadarko of the Trans-Alaska Pipeline System (TAPS) interstate rates for 2007 and 2008.

The FERC ruling will result in additional production tax and royalty payments to the state of an estimated $440 million later this year. This is in addition to the approximately $200 million in refunds awarded the state under a previous FERC ruling on protests of TAPS tariffs for 2005 and 2006. Future TAPS rates will have to comply with FERC precedent.

The TAPS carriers are appealing the FERC rulings to the United States Circuit Court of Appeals for the District of Columbia. Both the state and Anadarko are filing points on appeal that could result in even greater refunds.

"This is good news for Alaskans," said Governor Palin. "Pursuing TAPS tariff rate cases is not only important for the state treasury, but it also encourages new exploration in our oil and gas resources. Explorers consider fair and stable tariff rates a key factor in favor of investing time and effort. One of my most important promises to Alaskans is getting fair value for our resources while also encouraging new resource development." Acting A.G. Svobodny added, "While the State of Alaska strongly encourages development of our natural resources, we will take action to ensure a fair return for those resources."

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