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Regulatory fight over Rosefield terminal roils Public Service Commission meeting
Summary
A lengthy, contested hearing focused on whether Rosefield Fushon Operating’s storage terminal is a ‘terminal’ or a common‑carrier pipeline subject to the Public Service Commission’s rates and refund powers. Industry groups urged delay until the Legislature acts; upstream producer Kantium warned the rate hike threatens its operations.
A hours‑long hearing at the Louisiana Public Service Commission centered on a dispute between Cantium LLC and Rosefield Fushon Operating over whether Rosefield’s Fushon terminal is a common‑carrier pipeline subject to the commission’s jurisdiction or a non‑jurisdictional storage terminal.
Jamie Watts, counsel for Rosefield Fushon Operating, told commissioners the administrative law judge had misapplied a century‑old statute and that affirming the ALJ’s ruling would impose regulatory uncertainty and ‘‘bad regulatory and business policy’’ at a time the industry is making major investments in Louisiana. Watts argued Cantium’s claim is effectively a private commercial dispute and urged the commission to dismiss or defer the matter until pending legislative clarifications are resolved.
Counsel for Cantium, Matthew Simone, said the terminals and connecting piping function as a transportation route that moves Cantium’s production from offshore facilities to downstream pipelines. Simone said Rosefield’s post‑sale unilateral rate schedule raised fees ‘‘from X to four times X,’’ a change he said lacked any corresponding improvement in service and threatens Cantium’s continued operations. Cantium representatives told commissioners that without a regulated transportation tariff they had no practical alternative to move oil to market, that contractual limitations impede building a bypass pipeline, and that the price increase had rendered some production uneconomic.
Industry trade groups and terminal operators also weighed in. The Liquid Energy Pipeline Association and the International Liquid Terminals Association warned the commission that an expansive reading of the statute could subject many previously unregulated tank facilities to economic regulation, creating reporting burdens, new fees and the risk of frequent rate challenges. Rosefield and allied witnesses said federal filings and long‑standing FERC practice draw a clear line between terminal transfer facilities and pipelines and urged caution to avoid chilling investment.
Staff reminded commissioners the ALJ had issued an interlocutory ruling that the commission must review under Rule 57. Commissioners asked detailed legal and factual questions about the statutory language, how tank facilities interact with pipe connections, and whether the federal FERC orders left a gap that state law now covers.
Outcome and next steps: The commission agreed to take the matter under advisement to consider the ALJ referral and related filings; one motion moved the item to a future full meeting in Lafayette for a vote. Commissioners signaled they would continue to weigh the ALJ’s legal analysis, the contracts and the policy implications while noting there are parallel legislative efforts that could affect jurisdiction.
Why it matters: The dispute pits a producer’s argument for rate protection and market access against terminal operators’ concerns about retroactive or expansive regulation. The commission’s decision could reshape how storage terminals are treated under Louisiana law and affect investment, reporting and dispute pathways across the state’s midstream sector.
