Regulatory Commission of Alaska outlines HB 4 powers to review pipeline tariffs and contracts

At a Feb. 4 Senate Research Committee hearing, officials from the Regulatory Commission of Alaska (RCA) explained how HB 4 (codified principally as AS 42.08) gives the agency authority to review recourse tariffs, contracts and certificates for any in‑state pipeline operating as a contract carrier.

Laura Barson, the RCA’s chief administrative law judge and hearing examiner, told the committee that HB 4 added a new chapter to Title 42 and directed the commission to scrutinize initial and revised recourse tariffs and the accompanying cost studies. "The commission is required and shall review the supporting cost study that is provided with an initial recourse tariff," Barson said, and the RCA "is directed to focus on the proposed rate of return on equity and consistency with general guidelines and decisional decisions set forth by FERC." (Barson's remarks were made for the record during the presentation.)

Barson said a recourse tariff must contain procedures for open seasons, cost‑of‑service rates, rules and all contracts that affect rates or classifications. She described the recourse tariff as the baseline for pipeline operation: it establishes what the commission will use to evaluate later filings and whether contracts are negotiated at arm’s length.

The statute sets separate review paths for two contract types the commission may see: pre‑subscription agreements (typically entered before an open season) and precedent agreements (typically filed during or after an open season). Barson said that if a contract incorporates the approved recourse tariff, the statute directs the commission to treat it as negotiated at arm’s length and, absent unlawful market activity or unfair dealing, to find it just and reasonable.

The presenters also explained that the RCA’s authority under AS 42.08 includes powers to suspend, approve, deny or reject a recourse tariff; review and approve or disapprove contracts filed by an in‑state contract carrier; issue, transfer, modify or revoke certificates of public convenience and necessity; and require public notice of filings and the full cost study supporting a tariff.

Commissioner John Espindola said the RCA has begun an informational docket to collect details on competing projects and to clarify where the agency may have jurisdiction when a filing appears. "Today we issued an informational docket…to provide us information on the two potential projects," Espindola told the committee.

Barson emphasized that AS 42.08 is focused on transportation (movement of gas on the pipeline) and does not itself regulate commodity sale agreements between producers and purchasers; those arrangements can fall outside the statute’s scope.

The hearing closed with senators asking the RCA to return with additional materials, including comparable FERC rate guidance and other data to aid the committee’s review. The commission said it would provide that information to the committee on request.