9. Assignment of Proceeding
Michael R. Peevey is the assigned Commissioner and Karl Bemesderfer is the assigned ALJ in this proceeding.
1. The Shell Parties propose excluding truck racks and 2 proprietary tanks at Coalinga; truck racks and 5 proprietary tanks at Bakersfield; and 1 proprietary tank at Rio Bravo from the Pipeline assets being sold to Applicant.
2. The assets identified in FOF 1 are useful or necessary in the conduct of Applicant's business.
3. From January 1, 2005 through March 31, 2005, the Pipeline charged Independent Shippers $1.09 per barrel plus a Pipeline Loss Allowance (PLA) of 0.25% to transport heavy crude from Station 36 to the San Francisco Bay Area.
4. From April 1, 2005 to December 31, 2005 the Pipeline charged Independent Shippers $1.69 per barrel plus a PLA of 0.25% to transport heavy crude from Station 36 to the San Francisco Bay Area.
5. From January 1, 2006 to date, the Pipeline has charged Independent Shippers $1.90 per barrel plus a PLA of 0.25% to transport heavy crude from Station 36 to the San Francisco Bay Area.
6. From January 1, 2005 through December 31, 2005, the Pipeline charged its affiliate STUSCO $1.23 per barrel plus a PLA of 0.15% to transport heavy crude from Station 36 to the San Francisco Bay Area.
7. From January 1, 2006 to date, the Pipeline has charged its affiliate STUSCO $1.246 per barrel plus a PLA of 0.15% to transport heavy crude from Station 36 to the San Francisco Bay Area.
8. The Pipeline is wholly-owned by Equilon Enterprises LLC (Equilon) dba Shell Oil Products US. Equilon is a wholly-owned indirect subsidiary of Shell Oil Company. Shell Oil Company is a wholly-owned subsidiary of Shell Petroleum Inc., an indirect wholly-owned subsidiary of Royal Dutch Shell plc.
9. Shell Trading US Company (STUSCO) is a wholly-owned subsidiary of Shell Trading North America Company, a wholly-owned subsidiary of Shell Petroleum Inc., an indirect wholly-owned subsidiary of Royal Dutch Shell plc.
10. San Pablo Bay Pipeline Company LLP (SPBPC) is an indirect wholly-owned subsidiary of Equilon, and thus an indirect subsidiary of each of the entities identified in FOF 8.
11. SPBPC has no employees.
12. For ratemaking purposes, the Pipeline is deemed to have capital structure that is one-half equity and one-half debt.
13. Test Year 2010 Rate Base is $110,487,187.
14. Test Year 2010 Operating Expenses are $46,209,173.
15. Test Year 2010 Cost of Service is $67.5 million.
16. Test Year 2010 Cost of Equity is 13%.
17. Test Year 2010 Weighted Average Cost of Capital is 9.75%.
18. Test Year 2010 Achieved Return is 10.71%.
1. The Pipeline has a monopoly on the transportation of heated heavy crude oil from the San Joaquin Valley to the San Francisco Bay Area.
2. Sale or other disposition of public utility property useful or necessary in the conduct of a public utility's business requires the prior approval of this commission pursuant to Pub. Util. Code § 851.
3. The Application is also a de facto application for § 851 approval of the transfer out of public utility service of the assets identified in FOF 1.
4. The Application of San Pablo Bay Pipeline Corporation for authorization to acquire the Pipeline should be approved.
5. The de facto application of San Pablo Bay Pipeline Corporation for authorization to transfer out of public utility service the assets identified in FOF 1 should be denied.
6. $1.23/barrel plus a PLA of 0.15% is the just and reasonable rate for transportation of crude oil on the Pipeline between Station 36 and the Bay Area refineries from April 1, 2005 through December 31, 2005.
7. $1.246 plus a PLA of 0.15% is the just and reasonable rate for transportation of crude oil on the Pipeline between Station 36 and the Bay Area refineries from January 1, 2006 through the effective date of tariff approved in this decision.
8. Independent Shippers are entitled to refunds of the difference between just and reasonable rates and actual rates paid for transportation of crude oil on the Pipeline during the period from April 1, 2005 to the effective date of the tariff approved in this decision, plus interest at the three-month commercial paper rate.
9. $1.34/barrel plus a PLA of 0.10% is the just and reasonable rate for transportation of crude oil on the Pipeline between Station 36 and the Bay Area refineries from and after the effective date of the tariff approved in this decision.
10. Independent Shippers' proposed tariff, attached hereto as Attachment A, should govern the future operation of the Pipeline.
IT IS ORDERED that:
1. The Application of San Pablo Bay Pipeline Company for authorization to acquire the Pipeline is approved.
2. The de facto application of San Pablo Bay Pipeline Company for authorization to transfer out of public utility service the assets identified in Findings of Fact 1 is denied.
3. Equilon Enterprises, LLC, (Equilon) and Shell Trading US Company (STUSCO) shall refund to Independent Shippers the difference between just and reasonable transportation rates from and after April 1, 2005 and actual rates charged through the effective date of the tariff approved in this decision, plus interest on unpaid sums at the 3-month commercial paper rate. For purposes of calculating the refunds, the parties shall assume a Pipeline Loss Allowance of 0.15%. Equilon and STUSCO are jointly and severally liable to pay the refunds ordered herein.
4. The Pipeline will provide total monthly invoiced volumes by delivery point to the end user for the period April 1, 2005 to the first day of the month next following issuance of this decision. Independent Shippers shall present fully documented refund claims to Equilon Enterprises, LLC, (Equilon) and Shell Trading US Company (STUSCO) within 45 days of the effective date of this decision. Equilon and STUSCO shall review and pay such claims to the party determined to be the customer for whom the transportation service was actually provided and who was ultimately responsible for the transportation rate as promptly as possible thereafter but in no event later than 90 days from the effective date of this decision. Notwithstanding any prior transfer of the Pipeline to SPBPC, Equilon and STUSCO shall remain subject to the jurisdiction of the Commission until the refunds ordered herein are fully paid.
5. Within 45 days of the date of this decision, San Pablo Bay Pipeline Company, LLC (SPBPC) shall file a Tier Two Advice Letter (AL) with the Energy Division containing the tariff needed to implement this decision. The tariff shall be consistent with and comply with today's decision and shall be substantially in the form of Attachment A to this decision. The AL is subject to protest, and such protests must be filed not later than 20 days after the AL has been filed. SPBPC shall serve the AL by electronic mail on the service list to this proceeding, and on the interested parties who have requested notification of AL filings for SPBPC.
6. Pending approval of the Advice Letter referred in Ordering Paragraph 5, the tariff terms and conditions contained in Attachment A to this decision shall be effective from the first day of the month following issuance of this decision without regard to which entity owns the Pipeline at that time.
7. Effective the first day of the month following issuance of this decision, the Pipeline shall charge all shippers at the rate of $1.34 per barrel plus a pipeline loss allowance of 0.10% for heated and unheated transportation of crude oil from all points on the regulated pipeline system in the Kern County producing area to the Bay Area refineries.
8. Application 08-09-024, Case (C.) 08-03-021, C.09-02-007, and C.09-03-027 are closed.
This order is effective today.
Dated May 26, 2011, at San Francisco, California.
MICHAEL R. PEEVEY
President
TIMOTHY ALAN SIMON
MICHEL PETER FLORIO
CATHERINE J.K. SANDOVAL
MARK J. FERRON
Commissioners
ATTACHMENT A
FORM OF TARIFF
Cal. P.U.C. No.1 | |
SAN PABLO BAY PIPELINE COMPANY LLC RULES AND REGULATIONS TARIFF APPLY ON THE GATHERING AND TRANSPORTATION OF CRUDE PETROLEUM BY PIPELINE | |
Carrier will accept and transport Crude Petroleum offered for transportation through Carrier's facilities only as provided in this Rules and Regulations Tariff, except that specific rules and regulations published in individual tariffs making reference hereto will take precedence over the general rules and regulations in this tariff. The rules and regulations published herein shall apply only under tariffs making specific reference by Cal. P.U.C. number to this tariff, such reference to including supplements hereto and successive issues hereof. | |
The provisions published herein will, if effective, not result in an effect on the quality of the human environment. | |
ISSUED: |
EFFECTIVE: |
Issued By: |
Compiled By: |
Advice Letter No.
Resolution No.
5. DEFINITIONS 3
10. ESTABLISHMENT OF QUALITY 7
15. COMMON STREAM OPERATION 9
20. SEGREGATED BATCH OPERATIONS 10
25. INDIRECT LIQUID PRODUCTS 11
30. ADDITIVES 12
35. STORAGE 12
40. RECEIPT FACILITIES REQUIRED 12
45. DESTINATION FACILITIES REQUIRED 13
50. NOTICE OF DELIVERY, DEMURRAGE 13
55. NOMINATIONS 14
55.1 MINIMUM OPERATING REQUIREMENTS........................................................ 19
60. APPORTIONMENT WHEN TENDERS ARE IN EXCESS OF FACILITIES 21
65. TENDER, MINIMUM QUANTITY 22
70. TITLE 22
75. GAUGING, TESTING AND DEDUCTIONS 23
80. EVIDENCE OF RECEIPTS AND DELIVERIES 24
85. LIABILITY OF CARRIER 24
90. DUTY OF CARRIER 24
95. RATES APPLICABLE 24
100. PAYMENT OF TRANSPORTATION AND OTHER CHARGES 25
105. CLAIMS 26
110. PIPEAGE OR OTHER CONTRACTS 26
115. APPLICATION OF RATES FROM AND TO INTERMEDIATE POINTS 27
120. DIVERSION 27
125. INTRASYSTEM TRANSFERS 27
130. LINE FILL AND TANK BOTTOM INVENTORY REQUIREMENTS 27
135. CHARGE FOR COMPENSATION FUND FEES INCURRED BY CARRIER 28
140. PUBLIC UTILITIES COMMISSION REGULATION FEES 29
145. NEW CONNECTIONS 29
150. QUALITY BANK 29
RULES AND REGULATIONS
API - American Petroleum Institute.
API Gravity - Gravity, corrected to 60°F, determined in accordance with ASTM designation and expressed in degrees API.
Assay - A laboratory analysis of Crude Petroleum to include API Gravity, Reid vapor pressure, pour point, sediment and water content, sulfur content, viscosity at various temperatures, nitrogen, Total Acid Number (TAN), carbon residue, metals, hydrogen sulfide, salt, distillation, wax, organic chlorides, and other characteristics as may be required by Carrier.
ASTM - American Society for Testing Materials.
Barrel - Forty-two (42) United States gallons of Crude Petroleum at a temperature of sixty degrees (60°) Fahrenheit and zero psig.
Barrels per Calendar Day (BPCD) - The flow rate measured by the total number of barrels transported over a calendar month divided by the number of days in the month.
Barrels per Stream Day (BPSD) - The flow rate measured by the number of barrels transported over a 24-hour period where the flow is continuous over the period.
Carrier - San Pablo Bay Pipeline Company LLC
Common Stream - Crude Petroleum moved through Carrier's pipeline and pipeline facilities which is commingled or intermixed with Crude Petroleum of like quality and characteristics based on Crude Petroleum Assays and other pertinent analytical data. Common Streams shall be defined and transported in accordance with Items 10 and 15. As specified below, Carrier will transport two common streams: SJVH and SJVL.
Confirmed Nomination - The minimum volume each Shipper is obligated to ship in the Current Month and Forward Nomination Month One once the Carrier accepts the nominations.
Connecting Carrier - A connecting pipeline company as named or referred to herein. Connecting carriers can either deliver to or receive from Carrier.
Consignee - The party to whom a Shipper has ordered the delivery of Crude Petroleum.
CPUC - The California Public Utilities Commission.
Crude Petroleum - The direct liquid hydrocarbon production from oil or gas wells, in its natural form, including S&W contained therein or mixture thereof, not having been enhanced or altered in any manner or by any process that would result in misrepresentation of its true value of adaptability to refining. The following grades of Crude Petroleum will be accepted for transportation as provided in this Tariff: SJVH, SJVL, and Segregated Batches.
Current Month - The first month following the final nomination deadline. For example, if a Shipper desires to ship during May, final nominations are due in April and May is considered the Current Month.
Cure Period - The 24 hour period in which Shippers may make adjustments to their re-nominated volumes to produce a final adjusted nomination following notification from Carrier that the total combined re-nominations are less than the pipeline Minimum Operating Requirements.
Forward Nomination Month One - The first month after the Current Month.
Indirect Liquid Products - Liquid products resulting from operation in oil or gas fields of natural gasoline recovery plants, gas recycling plants or condensate or distillate recovery equipment, or a mixture of such products; often referred to simply as "indirect products."
Minimum Operating Requirements - The minimum volume necessary to support physical flow and maintain hydraulics to operate each segment of the pipeline, and provide the heated oil service consistent with Item 55.1. Currently, Carrier states that the minimum flow rates for the segments are:
Station 36/Bakersfield Tank Farm to Carneras Station 24,000 BPSD
Station 31 to Olig Station 14,000 BPSD
Olig Station to Carneras 20,000 BPSD
Carneras to Coalinga 60,000 BPSD
Net Barrel - Forty-two (42) United States gallons of Crude Petroleum at a temperature of sixty degrees (60o) Fahrenheit, zero psig and no sediment and water.
OCS - Crude Petroleum produced on the California Outer Continental Shelf. OCS will be accepted for transportation as a Segregated Batch only.
psia - Pounds per square inch absolute.
psig - Pounds per square inch gauge.
Regular Shipper - A Shipper having a record of shipments for a minimum of four of the prior six months in a line segment.
S & W - Sediment and water.
San Joaquin Valley Heavy (SJVH)- Common Stream Crude Petroleum produced within the San Joaquin Valley and the San Ardo Field with an approximate API Gravity of 13.5o and sulfur content of less than 2.3 weight percent. SJVH does not include Outer Continental Shelf (OCS) type Crude Petroleum, and OCS shall not be included in any Common Stream SJVH.
San Joaquin Valley Heavy Blend (SJVB) - Custom blend of Crude Petroleum produced through in-line or in-tank blending of Common Stream SJVH and Common Stream SJVL. SJVB shall not be deemed a Segregated Batch. SJVB shall not include OCS type Crude Petroleum, and OCS shall not be included in any SJVB.
San Joaquin Valley Light (SJVL)- Common Stream Crude Petroleum produced within the San Joaquin Valley with an API Gravity of 20.0o to 40.0o, and sulfur content of less than 1.50 weight percent. This definition expressly excludes crudes not produced in the San Joaquin Valley, such as OCS. SJVL does not include OCS type Crude Petroleum, and OCS shall not be included in any Common Stream SJVL. The API gravity of the SJVL Common Stream north of Coalinga may be reduced by the Carrier by blending SJVH into the SJVL, if needed, to meet the maximum API gravity of SJVL for safe operation of the pipeline.
Segregated Batch - A Tender of Crude Petroleum having specific identifiable characteristics that is moved through pipeline facilities so as to maintain its identity. SJVH, SJVL, and SJVB (a blend of Common Stream SJVH and Common Stream SJVL), and any other blend or mixture of two or more grades or types of Crude Petroleum shall not be deemed a Segregated Batch.
Shipper - A party who contracts with Carrier for transportation of Crude Petroleum, as defined herein and under the terms of this tariff, and who is recognized as having title to Crude Petroleum in Carrier's custody.
Tender - A nomination by a Shipper to Carrier of a stated quantity and grade of Crude Petroleum for transportation from a specified origin or origins to a specified destination or destinations in accordance with these rules and regulations.
True Vapor Pressure (TVP) - The partial pressure exerted by a vapor when it is in equilibrium with its liquid phase in a closed system, is difficult to measure in complicated mixtures such as crude oils. Therefore, the TVP in most cases is calculated from the Reid Vapor Pressure and the actual temperature. The Reid Vapor Pressure can be determined for crude oils by ATSM D-33 (preferred method) or by ASTM D-6377 or ASTM D-5191.
A. Carrier will from time to time determine the quality of Crude Petroleum it will regularly transport in a Common Stream between particular origin points and destination points on its trunk pipelines. Carrier will provide Common Stream service for both SJVH and SJVL for Crude Petroleum meeting the definitions of SJVH and SJVL. Carrier will inform all interested persons of such Crude Petroleum quality upon request by them. Changes in Common Stream quality definitions will be made by new tariff filings. The conditions applying to Common Stream operation are set forth In Item 15.
B. Carrier will accept for transportation, in a Segregated Batch, Crude Petroleum that does not meet the SJVH or SJVL Common Stream quality requirements provided that the conditions set forth in Item 20 are met.
C. Crude Petroleum, which is properly settled, shall not exceed 11 psia True Vapor Pressure at the receiving temperature, independent of gravity. One of the following API Gravity options will be used when specifically referenced in the tariff.
Option 1
Crude Petroleum with an approximate API Gravity of 11.0o to 17.0 o shall not exceed 5.9 psia true vapor pressure, shall not contain more than three percent (3%) of S&W and other impurities, and shall have a temperature not less than one hundred fifty degrees (150o) Fahrenheit and a maximum temperature that may be established by Carrier, which shall in no case be less than one hundred eighty degrees (180o) Fahrenheit unless limited by Carrier's facilities, in which case, this exception will be communicated in writing to all affected Shippers. For each one-tenth percent (0.1%) the S&W content of the Crude Petroleum received exceeds three percent (3.0%), Shipper shall incur a penalty of four cents ($0.04) per Barrel.
Option 2
Crude Petroleum with an approximate API Gravity of 17.0 to 40.0 shall not exceed 9.2 psia true vapor pressure, shall not contain more than three percent (3%) of S&W and other impurities, and shall have a temperature not in excess of one hundred and twenty degrees (120) Fahrenheit. For each one-tenth percent (0.1%) the S&W content of the Crude Petroleum received exceeds three percent (3.0%), Shipper shall incur a penalty of four cents ($0.04) per Barrel.
Option 3
Crude Petroleum with an approximate API Gravity of 11.0 to 17.0 shall not exceed 2.5 psia true vapor pressure, shall not contain more than three percent (3%) of S&W and other impurities, and shall have a temperature not less than one hundred and fifty degrees (150 o) Fahrenheit and a maximum temperature that may be established by Carrier, which shall in no case be less than one hundred eighty degrees (180o) Fahrenheit unless limited by Carrier's facilities, in which case, this exception will be communicated in writing to all affected Shippers. For each one-tenth percent (0.1%) the S&W content of the Crude Petroleum received exceeds three percent (3.0%), Shipper shall Incur a penalty of four cents ($0.04) per Barrel.
The vapor pressures in the Options above are dictated by permits and shall be adjusted when and if such permits require changes.
D. Carrier reserves the right to reject Crude Petroleum containing more than three percent (3%) of S&W, provided, however, that where delivery is being made to a Connecting Carrier, the S&W limitations of the Connecting Carrier may be imposed upon Carrier when such limits are less than that of Carrier, in which case the limitations of the Connecting Carrier will be applied.
E. If, upon investigation, Carrier determines that a Shipper has delivered to Carrier's facilities Crude Petroleum that has been contaminated by the existence of and/or excess amounts of impure substances, including, but not limited to, chlorinated and/or oxygenated hydrocarbons, arsenic, lead and/or other metals, and any other contaminants such as those defined in Item 25B, such Shipper will be excluded from further entry into applicable segments of the pipeline system until such time quality specifications are met to the satisfaction of Carrier. Further, Carrier reserves the right to dispose of any contaminated Crude Petroleum blocking its pipeline system, if Shipper cannot receive the contaminated crude. Disposal of such contaminated crude, if necessary, may be made in any reasonable commercial manner, and any costs, expense, damages or liability associated with the contamination of or disposal of any contaminated Crude Petroleum shall be borne by the Shipper introducing the contaminated Crude Petroleum into Carrier's system.
F. Before Carrier will accept Tenders from a potential Shipper seeking to transport Crude Petroleum on Carrier's system, such potential Shipper must first provide to Carrier a complete, industry-accepted Assay of the Crude Petroleum it intends to ship. Carrier shall have the right to make the Assay available to other Shippers upon request. Submission of the whole crude Assay to Carrier is evidence of the potential Shipper's consent to release the Assay to other Shippers or potential Shippers.
G. No Crude Petroleum will be accepted for transportation unless its gravity, sulfur, viscosity and other characteristics are such that it will be readily susceptible to transportation through Carrier's existing facilities and will not materially affect the quality of other shipments or cause damage to other Shippers' shipments and/or Carrier's system.
A. Carrier shall make a good faith effort to ensure that the quality of the SJVH and SJVL Common Streams is maintained. Because of commingling that takes place in Common Streams, all Shippers will be required to participate in, and Carrier shall be responsible for administering the quality banks as defined in Item 150. Unless quality degradation is caused at least in part by actions or inactions of Carrier, other than the administration of the quality banks, Carrier shall have no responsibility in, or for, any revaluations, administration or settlement which may be deemed appropriate by Shippers and/or Consignees because of mixing or commingling of Crude Petroleum shipments between the receipt and delivery of such shipments by Carrier within the same Common Stream.
B. Carrier will transport SJVH and SJVL Crude Petroleum as Common Streams.
C. Crude Petroleum will be accepted for transportation only on condition that it may be subject to such changes in gravity or quality while in transit as would result from its mixture with other Crude Petroleum in the Common Stream or tanks of the Carrier. Carrier shall be under no obligation to deliver the identical petroleum received and may make delivery out of the Common Stream.
D. San Joaquin Valley crudes that are introduced to the pipeline in a location where segregated facilities for both SJVH and SJVL cannot be made available and does not meet the common stream API gravity definition for the Common Stream specifications at the nearest pipeline origin may be deemed SJVH or SJVL by a simple majority vote of the Regular Shippers, counting all affiliated Shippers as one Regular Shipper, provided the Crude Petroleum sulfur content is within the Common Stream definition.
E. North Shafter Crude petroleum will be injected into the SJVH Common Stream.
20. SEGREGATED BATCH OPERATIONS
A. Carrier will accept Crude Petroleum which differs in quality and other characteristics from Carrier's SJVH and SJVL Common Streams, provided that:
1. Carrier has facilities available to segregate such Crude Petroleum while in transit and at the destination, and
2. Subject to Item 85, Carrier shall not be liable to Shipper or Consignee for changes in the quality of such grade of Crude Petroleum while in transit, and
3. For Segregated Batches with sulfur content less than 2.3 weight percent, the interface between such batches shall be allocated equitably between those shipments that precede and follow the interface.
4. For Segregated Batches with sulfur content greater than 2.3 weight percent, the shipper is required to provide a suitable buffer to be wrapped around a segregated batch for protection of quality of the Common Streams. The buffer shall be provided by the Shipper requesting the segregated batch and nominated as such as part of the normal nomination process. The buffer Crude Petroleum must contain less than 2.3 weight percent sulfur.
5. For Segregated Batches with sulfur content less than 2.3 weight percent, any shipper may request that a buffer be wrapped around a segregated batch for protection of quality or for operational purposes. The buffer shall be provided by the Shipper requesting the segregated batch and nominated as such as part of the normal nomination process. The buffer Crude Petroleum must contain less than 2.3 weight percent sulfur.
B. Once Minimum Operating Requirements are met through Confirmed Nominations to maintain heated service, Carrier may offer to Shippers delivery of SJVB, originating in Coalinga to final destination. Shipment of SJVB south of Coalinga is prohibited.
A. Carrier will not accept Indirect Liquid Products of oil or gas wells, including natural gasoline and natural gas liquids.
B. Carrier will not accept blends of Crude Petroleum containing any of the following: waste oils, lube oils, crankcase oils, PCBs, dioxins, organic chlorides or other chemical compounds that are not natural to crude oil.
Carrier reserves the right to require, approve or reject the injection of corrosion inhibitors, viscosity or pour point depressants, or other such additives in Crude Petroleum to be transported.
Carrier has working tanks incident to transportation of Crude Petroleum, and unless otherwise specifically provided for in a separate tariff item, Carrier does not offer separate storage service.
40. RECEIPT FACILITIES REQUIRED
A. Carrier will not provide storage facilities at origin points unless specifically provided in a separate tariff item. Carrier will provide access to existing truck unloading racks and Lease Automated Custody Transfer (LACT) units at origin points for all Shippers. A usage fee for each location established pursuant to a tariff duly filed with the CPUC, in addition to the published Crude Petroleum pipeline transportation rate on file at the CPUC, will be applied to Crude Petroleum delivered into the pipeline via truck rack. Carrier will receive Crude Petroleum from Shippers at origin points at which Shipper has transportation or storage rights. Crude Petroleum will be received from pipelines, tanks, truck racks, or other facilities. Carrier will determine and advise Shippers of the size and capacity of pipelines, tanks and/or metering facilities to be provided by Shipper at the point of receipt to meet the operating conditions of Carrier's facilities at such point. Carrier will not accept Crude Petroleum for transportation unless such facilities meet Carrier and industry standards.
B. Where Crude Petroleum to be shipped requires transportation in a Segregated Batch, Shippers or Consignees shall be responsible for providing tankage to meet minimum Tender requirements as provided in Item No. 65 hereof at a point where Carrier facilities are available for receipt and transportation of such Crude Petroleum batches.
45. DESTINATION FACILITIES REQUIRED
A. Carrier will not provide storage facilities at destination points unless specifically provided in a separate tariff item. Carrier may refuse to accept Crude Petroleum for transportation unless satisfactory evidence is furnished that the Shipper, or Consignee, has provided the necessary facilities for the prompt receiving of said Crude Petroleum batches.
B. If the Shipper, or Consignee, is unable or refuses to receive said Crude Petroleum as it arrives at its destination point, Shipper or Consignee will provide alternate arrangements and will notify Carrier regarding the disposition of the crude. Carrier will make reasonable efforts to carry out reasonable arrangements for alternate delivery. Any additional expenses incurred by Carrier and any applicable demurrage charges as specified in Item 50 in making such alternate arrangements shall be borne by the Shipper, or Consignee. In the absence of reasonable efforts to provide alternate arrangements by Shipper, Carrier reserves the right to make those arrangements for disposition of the Crude Petroleum it deems appropriate in order to clear its pipeline. Any additional expenses incurred by Carrier in making such arrangements shall be borne by the Shipper, or Consignee. Carrier shall not be responsible for any reasonable losses sustained by Shipper, or Consignee, due to Carrier making other arrangements for the disposition of the Crude Petroleum
50. NOTICE OF DELIVERY, DEMURRAGE
Within 48 hours after nominations have been accepted and confirmed by Carrier, Carrier will provide a delivery schedule to each destination for the calendar month corresponding to the current month nominated volumes. Carrier may, at any time after receipt of a consignment of Crude Petroleum, amend the delivery schedule with 24-hour notice to Shipper or Consignee and begin delivery of Crude Petroleum at Carrier's then current rate of pumping consistent with system capacity. Commencing at seven o'clock a.m. (Pacific Time), after expiration of said 24-hour notice, Carrier shall assess a demurrage charge on any part of said Crude Petroleum shipment offered for delivery and not taken by Shipper or Consignee. Provided, however, demurrage will only be charged if alternative arrangements for delivery cannot be made by Shipper or Consignee. The demurrage charge will be three cents ($0.03) per Barrel per day for each day of 24 hours or fractional part thereof. After expiration of said 24-hour notice, Carrier's liability for loss, damage or delay with respect to Crude Petroleum offered for delivery but not taken by Shipper or Consignee shall be that of warehouseman only.
A. All Shippers and Consignees desiring to ship or receive Crude Petroleum through the pipelines of Carrier shall nominate SJVH, SJVL, and Segregated Batches only. After Minimum Operating Requirements for continuous flow have been met, any Shipper or Consignee may request that all or part of its nomination of SJVH and SJVL be delivered as SJVB. After Minimum Operating Requirements have been nominated, Carrier will notify SJVL Shippers of the maximum allowable delivery API gravity for the pipeline segment from Coalinga to Avon in a manner that would not impact safe operations of the pipeline. Carrier will deliver up to the maximum operable API gravity SJVL from Coalinga to Avon and, if necessary, by blending SJVH into the SJVL Common Stream north of Coalinga, and Carrier will require the SJVL Shipper to nominate sufficient SJVH to meet such maximum operable API gravity requirements.
B. All Shippers shall provide Carrier, through its website nomination process (or in writing until the website nomination process is in place), with the following information required by Carrier to schedule and dispatch each shipment of Crude Petroleum: the kind, quantity, origin point, sequence of delivery, destination point and Shipper of each proposed crude shipment. All Nominations must contain a final destination point to be accepted. Nominations must be received by the final nomination deadline. The final nomination deadline is 3:00 p.m. (Pacific Time) on the fifth (5th) working day (excluding Carrier holidays) before the first day of the month in which Shipper desires to ship. Carrier will inform Shippers of Carrier holidays at the time they become Shippers and thereafter by December 15 of the preceding year.
C. Nominations or changes in nominations received after the final nomination deadline will be accepted only in writing and only if space is available and the additional or changed nominations do not impair the movement of crude nominated prior to the final nomination deadline.
D. In addition to the above, Shippers will nominate according to the following rolling bimonthly nomination process to ensure the Minimum Operating Requirements for continuous flow are nominated and to allow Shippers adequate time to re-nominate if the Minimum Operating Requirements for continuous flow are not met.
For purposes of implementation of nominations under this tariff, Carrier assumes the nominations for the initial Current Month meets the Minimum Operating Requirements for continuous flow. As the example will show, as nominations roll forward, the Forward Nomination Month One Confirmed Nomination will become the Current Month minimum nomination.
1. Carrier will accept nominations for the Current Month and Forward Nomination Month One in accordance with Item 55A.
2. If nominations are equal to or greater than the Minimum Operating Requirements for continuous flow, each Shipper's Forward Nomination Month One is a Confirmed Nomination, and Carrier will notify Shippers that nominations are accepted. If nominations for the Forward Nomination Month One are less than the Minimum Operating Requirements for continuous flow, Carrier will notify Shippers, and Shippers will have 48 hours to re-nominate Forward Nomination Month One.
3. If the re-nominated shipments are greater than the Minimum Operating Requirements for continuous flow, Carrier will notify Shippers that nominations are accepted, and each Shipper's Forward Nomination Month One becomes a Confirmed Nomination.
4. If the re-nominated shipments are less than the Minimum Operating Requirements for continuous flow, Carrier will notify Shippers of the shortfall, and shippers will have 24 hours to cure the Minimum Operating Requirements for continuous flow by adjusting their final nominations.
5. If the final adjusted nominations are greater than the Minimum Operating Requirements for continuous flow, Carrier will notify Shippers that nominations are accepted, and each Shipper's final adjusted nomination for Forward Nomination Month One becomes a Confirmed Nomination.
6. In the event that the final adjusted nominations for Forward Nomination Month One are below the Minimum Operating Requirements for continuous flow, Carrier will notify Shippers of non-continuous operation and will make best efforts to deliver the nominated volumes on a non-continuous basis, i.e., the pipeline will perform intermittent shutdowns as needed to reduce the average pipeline deliveries to the nominated volumes.
7. If the final adjusted nominations are less than the Minimum Operating Requirements for continuous flow, all future nomination increases to Forward Nomination Month One in excess of 110% of the final adjusted nominations by any Shipper whose final adjusted nomination is less than that Shipper's actual average shipments over the three prior calendar months are subject to penalty of 100% of the posted tariff on file with the CPUC. Penalties charged to Shippers in a given month are credited to all Shippers not subject to the penalty.
Example 1:
Assume the Minimum Operating Requirement for continuous flow from Coalinga to Avon is 140,000 BPSD and nominations are due for June business. June is the Current Month, and July is the Forward Nomination Month One. Total Shipper nominations for the Coalinga to Avon segment are as follows:
June |
July |
||
150,000 |
120,000 |
Carrier will notify Shippers as follows:
a. Nomination for the Current Month is accepted and becomes a Confirmed Nomination;
b. July nomination is short by 20,000 Barrels per day.
c. Shippers are notified that July nominations are not accepted and are asked to re-nominate July volumes. Shippers would be able to request deliveries of SJVB in June because nominations would have met the 140,000 BPSD minimum volume.
Case 1: Total July re-nomination of 140,000 BPD
Since the total July Shipper re-nominations for the Coalinga to Avon segment are greater than or equal to the 140,000 barrels per day segment minimum for continuous flow, Carrier will notify Shippers that their Forward Nomination Month One nominations are accepted and each is a Confirmed Nomination. Carrier would be able to fill any shipper requests for deliveries of SJVB during July because the 140,000 BPSD minimum volume was nominated in that month for this mode of operations.
Case 2: July re-nomination of 120,000 BPD
Since the total July Shipper re-nominations for the Coalinga to Avon segment are less than the 140,000 barrels per day segment minimum for continuous flow, Carrier will notify Shippers of the following:
a. Total July nominations are short 20,000 BPD.
b. Shippers are notified they have 24 hours to cure the July minimum pipeline nomination.
c. Upon expiration of the 24 hour cure period, Shippers are notified that their final adjusted nomination (i.e. re-nominated volumes plus any additional nominations during the cure period) are subject to penalty for increased nominations for shipment of barrels in excess of 110% of the total re-nomination plus cure period volume, if the Shipper's final adjusted nomination is less than the Shipper's actual average shipments over the prior three calendar months.
d. Shippers are notified of potential non-continuous service (i.e. possible intermittent pipeline shutdowns) for Forward Nomination Month One. Carrier will make best efforts to develop a feasible operating schedule that meets delivery of Shipper nominations in Forward Month One.
Example 2: (Final adjusted nomination penalty provision)
This example demonstrates the penalty provision associated with the final adjusted nomination process. The example assumes that total nominations remain below the Coalinga to Avon line segment Minimum Operating Requirement for continuous flow after the Forward Month One nominations, re-nominations, and cure period.
Shipper A nominates 20,000 BPD as its original Forward Month One nomination (July). Shipper A nominates 25,000 BPD as its re-nomination for Forward Month One (July). Shipper A adds 5,000 BPD to its nomination during the cure period to produce a final adjusted nomination of 30,000 BPD for Forward Month One (July). Shipper A's actual average shipments over the calendar months of April, May, and June averaged 40,000 BPCD. Shipper A can increase its nomination up to 33,000 BPD prior to and during the Shipment month (July) without penalty. Nominations greater than 33,000 BPD prior to and during the shipment month (July) are subject to penalty of 100% of the filed tariff.
The intent of the penalty provision is to incentivize Shippers to make realistic nominations for the Current Month and Forward Month One and to penalize Shippers who impact the operation of the pipeline and other Shippers by under nominating expected shipments through the nomination, re-nomination, and cure periods.
Under this example, July is potentially a non-operating month for the heated oil service, if Carrier cannot accommodate nominated volumes with interruptible service.
E. Carrier recognizes that the provision of non-discriminatory service to all Shippers is of the utmost importance to pipeline operations and that the interruption of any type of service due to insufficient volume nominations should be a last resort. In the event Carrier believes that it is not operationally feasible to continue heated service on either a continuous or non-continuous basis as a result of insufficient nominations, Carrier shall file an application with the CPUC, on not less than fifteen (15) days' notice to the Shippers, seeking authorization to shut down such heated service on a showing by clear and convincing evidence that there is no reasonable alternative to maintain heated service while protecting the safety of the pipeline and the public.
55.1 MINIMUM OPERATING REQUIREMENTS
A. Within one (1) month of the effective date of this tariff, Carrier and Shippers shall determine the Minimum Operating Requirements for continuous and non-continuous flow for each system segment based on sound engineering and reasonable assumptions in hydraulic studies performed by Carrier.
B. Within six (6) months of the effective date of this tariff, and at a minimum every twelve (12) months thereafter, Carrier will develop options for reducing the required Minimum Operating Requirements as established in Item 55.1.A. This will be presented as "step down" options, to cover a range of Minimum Operating Requirements for continuous and non-continuous flow (on the 20-inch northbound segment from Coalinga) to achieve the lowest Minimum Operating Requirements. Carrier will provide the following to Shippers:
1. Description of facility modifications and/or operational changes for each of the "step down" options.
2. Minimum Volume associated with each option, by pipeline segment.
3. Estimated capital and incremental operating costs (+/- 35%) for each option, by pipeline segment.
4. Time required to implement each option, by pipeline segment.
5. Other possible ways to reduce the cost and time to implement the options, including:
C. Prior to Carrier committing to conduct any study, Carrier will inform Shippers of the nature of the proposed study, its estimated costs, timeline for completion, and provide Shippers the opportunity to comment on the proposed study and its cost.
D. Carrier will organize a Shippers' meeting at least once per calendar year, which will include a discussion of forecast volumes for the foreseeable future. This forecast will then be compared against the "step down" options. Shippers and Carrier will discuss whether any "step down" enhancements should be considered at that time.
E. Following the discussion at the Shippers' meeting, Carrier will determine what detailed engineering studies to conduct to determine the capital and operating costs to construct and operate new or modified facilities, and Carrier will determine and communicate to the Shippers investment level (+/- 10 percent) estimates as well as required increases in transportation rates in accordance with Item 55.1.G. below.
F. After receiving any additional Shipper comments with the majority of Regular Shippers, counting all affiliated Shippers as one Regular Shipper, supporting, all shipper-recommended projects will be deemed to be in the public interest and consistent with Carrier's public utility obligation to serve. Carrier shall thereafter file with the CPUC to proceed with the project(s) and to include the costs of such in rates on an equal cost per barrel basis for all SJVH, SJVL, SJVB, and Segregated Batch shipments north of Coalinga. In the event Carrier determines it will not proceed with a Shipper requested project(s), Shippers may file a complaint with the CPUC for Carrier's refusal to act. In any complaint as to a refusal to proceed with a project, Carrier will have the burden of proof to justify that the Shipper-recommended project should not proceed.
G. Such cost recovery will not include any administrative fee, processing fee, handling fee, or any similar fee for Carrier's employees' time and expense.
60. APPORTIONMENT WHEN TENDERS ARE IN EXCESS OF FACILITIES
A. When there shall be Tendered to Carrier, for transportation, more Crude Petroleum than can be immediately transported, on a line segment, the transportation furnished by Carrier shall be apportioned among "Regular Shippers" and "New Shippers" as follows:
1. New Shippers will be allocated a total of ten percent (10%) of the available pipeline capacity. If more than one New Shipper has nominated volumes, pipeline space shall be allocated proportionately to each New Shipper in relation to the total nominations by New Shippers, so that the total pipeline capacity allocated for all New Shippers shall not exceed ten percent (10%) of the available pipeline capacity.
2. The remaining capacity shall be allocated among Regular Shippers in proportion to their base period shipments.
B. The "base period" is a period of 6 months historical shipments during months the pipeline was in operation, beginning 7 operating months prior to the month of allocation and excluding the month preceding the month of allocation. A "Regular Shipper" is any Shipper having a record of shipments, in the line segment being prorated for at least four months during the base period. A "New Shipper" is a Shipper who does not qualify as a Regular Shipper under the above definition, but excludes any Shipper that is an affiliate of any Regular Shipper.
C. If a line segment is prorated and a Shipper is unable to tender Crude Petroleum equal to the space allocated to it, the Shipper will be invoiced and will be responsible for payment of any amount equal to the space allocated or the actual volumes delivered, whichever is higher, times the tariff rate.
Tenders for the transportation of Crude Petroleum for which Carrier has facilities will be accepted into Carrier's system under this tariff in quantities of not less than thirty-five thousand (35,000) Barrels. Nominations for delivery of tenders of each Common Stream may include aggregated volumes from one or more Shippers as operations permit and provided such Crude Petroleum is of similar quality and characteristics as is being transported from receipt point to destination point. Carrier will accept any quantity of Crude Petroleum from lease tanks or other facilities to which Carrier's facilities are connected if such quantity and quality can be consolidated with other Crude Petroleum such that Carrier can make a single delivery of not less than thirty-five thousand (35,000) Barrels, and Carrier will not be obligated to make any single delivery of less than thirty-five thousand (35,000) Barrels. The term "single delivery" as used herein means a delivery of Crude Petroleum in one continuous operation to one or more Consignees into a single facility, furnished by such Consignee or Consignees, to which Carrier is connected.
Carrier shall have the right to reject any Crude Petroleum which, when Tendered for transportation, may be involved in litigation, or the title of which may be in dispute, or which may be encumbered by lien or charge of any kind, and Carrier may require of the Shipper satisfactory evidence of the Shipper's perfect and unencumbered title or satisfactory indemnity bond to protect Carrier. By Tendering Crude Petroleum, the Shipper warrants and guarantees that it has good title thereto and agrees to hold Carrier harmless for any and all loss, cost, liability, damage and/or expense resulting from failure of title thereto; provided, that acceptance for transportation shall not be deemed a representation by Carrier as to title.
75 GAUGING, TESTING AND DEDUCTIONS
A. All shipments Tendered for transportation to and from Carrier shall be tested, gauged or metered in accordance with API standards, by a representative of Carrier prior to, or at the time of receipt from the Shipper and delivery to Consignee. The Shipper or Consignee shall at all times have the privilege of being present or represented during the testing and shall be notified prior to testing, gauging, or metering; however, failure of a Shipper and Consignee to have a representative present will constitute a waiver, and the Shipper and Consignee shall be bound by the information and data on the tickets.
B. Corrections will be made to adjust quantities to standard conditions (60 degrees Fahrenheit, zero psig and no S&W) and report volumes in Net Barrels.
C. A deduction of ten hundredths of one percent (0.10%) for the Common Stream SJVH and fifteen hundredths of one percent (0.15%) for the Common Stream SJVL, SJVB, and Segregated Batches will be made to cover evaporation, interface losses, and normal losses during transportation. The loss adjustment will be applied to volumes shipped from Coalinga or origins north of Coalinga to final destination. D. After consideration of all of the factors set forth in this Item No. 75, a net balance will be determined as the quantity deliverable by Carrier, and transportation charges will be assessed on the net balance.
E. Any volumetric difference between receipts from Shipper and delivery to Shipper or Consignee during a Current Month as a result of scheduling will be adjusted in the following month without any further liability to Carrier, taking into consideration all prior deductions allowed pursuant to the rules and regulations contained herein.
F. Any Carrier meter error adjustment must be made within six months of deliveries, or be barred in the absence of fraud, gross negligence, or willful misconduct.
80. EVIDENCE OF RECEIPTS AND DELIVERIES
Crude Petroleum received from Shipper and Crude Petroleum delivered to Consignee shall, in each instance, be evidenced by tickets or Carrier's statements containing data essential to the determination of quantity.
The Carrier, while in possession of Crude Petroleum herein described, shall not be liable for any loss thereof; damage thereto; or delay caused by act of God, war, act of public enemy, quarantine, the authority of law, strikes, riots, civil disorder, requisition or necessity of the Government of the United States in time of war, default of Shipper or owner, or from any cause not due to the sole negligence or willful misconduct of the Carrier. In case of loss of Crude Petroleum for which Carrier is not responsible, the Shipper shall bear the loss. Where such loss occurs in a tank containing Crude Petroleum which is the property of more than one Shipper, or in a line containing a Segregated Batch of Crude Petroleum which is the property of more than one Shipper, each Shipper shall bear the loss in such proportion as his total volume in said tank or batch bears to the total volume in said tank or batch.
Carrier shall not be required to transport Crude Petroleum except with reasonable diligence, considering the quality of the Crude Petroleum, the distance of transportation and other material elements, and will not accept Crude Petroleum to be transported in time for any particular market.
The rate and the rules and regulations that shall apply to the transportation of Crude Petroleum shall be the rate and the rules and regulations in effect on the date Carrier receives the Crude Petroleum for transportation.
100. PAYMENT OF TRANSPORTATION AND OTHER CHARGES
Shipper shall be responsible for payment of transportation and all other charges and costs collectible under this tariff. Crude Petroleum accepted for gathering and/or transportation shall be subject to the rates and charges on file with the CPUC in effect on the date of receipt by Carrier. Payments not received by Carrier in accordance with invoice terms shall be subject to a late charge equivalent to 125% of prime rate as quoted by a major New York bank. Shipper shall be responsible to Carrier for any attorney fees or other costs incurred in connection with the collection of payments due to Carrier by Shipper. Carrier shall have a lien on all Crude Petroleum accepted for transportation to secure the payment of all charges and costs, including demurrage charges and may refuse to make delivery of the Crude Petroleum until all charges have been paid. If said charges and costs, or any part thereof, shall remain unpaid for five days, as computed from the first seven o'clock a.m. after written notice is mailed to Shipper of Carrier's intention to enforce its lien as herein provided, or when there shall be failure to take the Crude Petroleum at the point of destination as provided in Item 50 within five days, as computed from the first seven o'clock a.m. after expiration of the notice therein provided, Carrier shall have the right through an agent to sell said Crude Petroleum at public auction, for cash, between the hours of ten o'clock a.m. and four o'clock p.m. on any day not a weekend or legal holiday, and not less than twenty-four hours after notice of the time and place of such sale and the quantity, general description, and location of the Crude Petroleum to be sold has been published in a daily newspaper of general circulation published in the town or city where sale is to be held, and sent by facsimile (or other comparable means) to Shipper. Carrier may be a bidder and purchaser at such sale. Out of the proceeds of said sale, Carrier shall pay itself for all transportation, demurrage, charges and costs collectible under this tariff, and other lawful charges, expenses of notice, advertisement, sale and other necessary expenses, and expenses of caring for and maintaining the Crude Petroleum, and the balance shall be held for whomsoever may be lawfully entitled thereto; if the proceeds of said sale do not cover all expenses incurred by Carrier, the Shipper and/or Consignee are liable to Carrier for any deficiency.
A. Notice of claims for loss or damage in connection with shipments must be made to Carrier or Shipper in writing within nine (9) months and one (1) day after same shall have accrued, or, in case of failure to make delivery, within nine (9) months and one (1) day after a reasonable time for delivery shall have elapsed. Such claims, fully amplified, must be filed with Carrier or Shipper within nine (9) months and one (1) day thereafter, and unless so made and filed, Carrier or Shipper shall be wholly released and discharged there from and shall not be liable therefore in any court of justice unless damages are determined to be by reason of fraud, willful misconduct, or negligence. No suit at law or in equity shall be maintained upon any claim unless instituted within two (2) years and one (1) day after the cause of action accrued unless damages are determined to be by reason of fraud, willful misconduct, or negligence of the liable party. Carrier or Shipper will determine any such loss or damage on either the basis of the volumetric loss or monetary value of the Crude Petroleum.
B. Where claims are not filed or suits are not instituted thereon in accordance with the foregoing provisions, Carrier or Shipper will not be liable and such claims will not be accepted unless damages are determined to be by reason of fraud, willful misconduct, or negligence of the liable party.
110. PIPEAGE OR OTHER CONTRACTS
In accordance with the applicable tariff and these rules and regulations, in the event construction of new or additional facilities or installation of new equipment or additional equipment is required to accommodate new shipments, separate pipeage and/or other contracts relating to the repayment of costs for equipment that must be added, or physical adjustments that must be made to Carrier's pipeline system in order to accommodate a Shipper's request for service may be required by Carrier before any duty of transportation shall arise.
115. APPLICATION OF RATES FROM AND TO INTERMEDIATE POINTS
For Crude Petroleum accepted for transportation from any point on Carrier's lines not named in a particular tariff which is intermediate to a point from which rates are published therein, through such unnamed point, Carrier will apply from such unnamed point the rate published therein from the next more distant point specified in such tariff. For Crude Petroleum accepted for transportation to any point not named in a particular tariff which is intermediate to a point to which rates are published in said tariffs, through such unnamed point, the rate published therein to the next more distant point specified in the tariff will apply.
Diversion may be made without charge if requested in writing by shipper prior to delivery at original destination, subject to the rates, rules and regulations applicable from point of origin to point of final destination, upon the condition that no out-of-line or backhaul movement will be made.
Transfers of title to Crude Petroleum at non-custody transfer locations will not be recognized by Carrier while in Carrier's custody.
130. LINE FILL AND TANK BOTTOM INVENTORY REQUIREMENTS
Carrier will require each Shipper to supply a pro rata share of Crude Petroleum necessary for pipeline and tankage fill to ensure efficient operation of Carrier's pipeline system prior to delivery. Carrier will provide detailed calculation of the minimum pipeline and tankage fill for operational requirements to all shippers for each Common Stream (SJVH and SJVL) and Segregated Batch operation. Such pro rata share for Common Stream SJVH, Common Stream SJVL, and Segregated Batches shall be calculated every six (6) months and also when either a new Shipper begins shipments or when a Shipper ceases shipments. The pro rata share of the Common Stream SJVH, Common Stream SJVL, and Segregated Batches (each grade) shall be equal to the Shipper's previous six month shipments divided by the total shipments of the corresponding grades of Common Stream SJVH, Common Stream SJVL, and Segregated Batches (each grade) for the same previous six months. Carrier will recalculate inventory requirements for all Crude Petroleum grades in January and July of each calendar year and provide the Shippers with a reconciliation of the actual prior six months system inventory to the calculated minimum required inventory for each Crude Petroleum grade. In the case of a Shipper ceasing Shipments of a particular grade, the previous six months total shipments of that grade shall be reduced by the amount the Shipper leaving the system shipped during those six months. In the case of a new Shipper commencing Shipments of a particular grade, the previous six months total shipments of that grade shall be increased by the New Shipper's first month nomination multiplied by six. After the reallocation of each grade has been calculated, each Shipper shall be notified of the inventory requirements for pipeline and tankage fill and shall have two months from the date of nomination to supply any additional inventory requirement. Crude Petroleum provided by Shippers for this purpose may be withdrawn only after: (1) shipments have ceased and Shipper has notified Carrier in writing to discontinue shipments in the Carrier's system, and (2) Shipper balances have been reconciled between Shipper and Carrier. Carrier, at its discretion, may require advance payment of transportation charges on the volumes to be cleared from Carrier's system, and any unpaid accounts receivable, before final delivery will be made. Carrier shall have a reasonable period of time, not to exceed six months, from the receipt of said notice to complete administrative and operational requirements incidental to Shipper withdrawal.
135. CHARGE FOR COMPENSATION FUND FEES INCURRED BY CARRIER
In addition to the transportation charges and all other charges accruing on the Crude Petroleum accepted for transportation through the Carrier's facilities, a per Barrel charge will be assessed and collected in the amount of any tax, fee, or other charge levied against Carrier in connection with transportation of Crude Petroleum, as the result of any Federal, State or Local act or regulation which levies a tax, fee, or other charge, on the receipt, delivery, transfer or transportation of such commodities within their jurisdiction for the purpose of creating a fund for prevention, containment, cleanup and/or removal of spills and/or the reimbursement of parties sustaining loss therefrom.
140. PUBLIC UTILITIES COMMISSION REGULATORY FEES
Carrier is authorized by the CPUC to collect from its Shippers the fee[s] required to be paid pursuant to Public Utilities Code Section 421. Such fee[s] shall be included as a charge on the invoices rendered each month for gathering and transportation charges and shall be due and payable in accordance with Rule No. 100.
Connections to Carrier's pipeline(s) will only be considered if made by formal written notification to Carrier and all requests will be subject to the following standards and conditions. All connections will be subject to design requirements necessary to protect the safety, security, and efficient operation of the Carrier's pipeline(s) in accordance with generally accepted industry standards and compliance with governmental regulations.
1. To assure no Shipper will be materially damaged or allowed to benefit by changes in gravity or sulfur due to the intermixing of Crude Petroleum in the system, Shippers will be required to participate in Gravity and Sulfur Banks for all Common Stream grades of Crude Petroleum shipped, unless shipped in a Segregated Batch with a buffer on both sides. A fee of 0.2 cents per barrel will be assessed to cover Carrier's costs for administration of the quality banks for Shippers.
2. Each shipper is required to participate in the gravity and sulfur banks. Each Shipper agrees to pay the Carrier the computed adjustments due from said Shipper in accordance with these rules and regulations.
3. Carrier shall publish, and from time to time, revise a Gravity Value Table providing for adjustments for the value of crudes of different gravities and sulfur. Said table, and subsequent issues thereof, shall be incorporated by reference into this tariff.
4. The table of gravity differential values per barrel as attached hereto as Exhibit "A" is incorporated herein and made a part of these Rules.
5. Factors in the Gravity Value Table are based on posted crude oil price adjustment scales as published by major posters of California crude oil. Carrier will revise the Gravity Value Table only if there has been an increase or decrease made in a majority of the crude oil price adjustment scales upon which the current Gravity Value Table is based.
6. Upon change, Carrier will provide Shippers with written notice of the new Gravity Value Table on or before the 15th day of the month proceeding the month in which the new Gravity Value Table shall take effect. The effective date of change will be on the first day of the next month.
7. Carrier shall administer the quality banks providing adjustments for the value of the SJVH and SJVL Common Streams with different qualities in the manner specified below for both receipt and delivery volumes:
8. Applicable barrels and gravities shall be the net barrels at 60o Fahrenheit (with no deduction for loss allowance). Sulfur analysis to determine weight percent sulfur shall be conducted on the custody transfer composite samples.
9. The weighted average gravity differential value per barrel (for two or more gravities of Crude Petroleum), as hereinafter referred to, shall be obtained in the following manner: Multiply the gravity differential values per barrel (from the attached table as same is from time to time revised) by the number of barrels to which such gravity differential values are applicable and then divide the total of the resultant gravity differential values in dollars and cents by the total of the applicable barrels.
I. Adjustment between Shippers, for both receipt volumes and delivery volumes, shall be computed as follows for each Crude Petroleum grade (Common Streams):
A. Compute the weighted average gravity differential value per barrel of the barrels received from/delivered to each Shipper.
B. Compute the weighted average gravity differential value per barrel for each composite common stream for the receipts and deliveries.
Receipt Calculations:
C. If the weighted average gravity differential value per barrel of a Shipper as so determined under Paragraph I above shall be greater than the weighted average gravity differential value per barrel for the aforementioned common stream Crude Petroleum as determined under Paragraph II, the difference in cents per barrel shall be calculated and Shipper shall be credited (receives) an amount calculated by multiplying said difference in gravity differential value per barrel by the applicable barrels.
D. If the weighted average gravity differential value per barrel of a Shipper is less than the weighted average gravity differential value per barrel of the aforementioned common stream Crude Petroleum, the difference shall be calculated as above outlined and a Shipper debited (pays) for such difference.
Delivery Calculations:
E. If the weighted average gravity differential value per barrel of a Shipper as so determined under Paragraph I above shall be greater than the weighted average gravity differential value per barrel for the aforementioned common stream Crude Petroleum as determined under Paragraph II, the difference in cents per barrel shall be calculated and Shipper shall be debited (pays) an amount calculated by multiplying said difference in gravity differential value per barrel by the applicable barrels.
F. If the weighted average gravity differential value per barrel of a Shipper is less than the weighted average gravity differential value per barrel of the aforementioned common stream Crude Petroleum, the difference shall be calculated as above outlined and a Shipper credited (receives) for such difference.
II. Sample calculations are attached as Exhibit "B".
10. In order to facilitate equitable adjustment among all Shippers for sulfur differentials arising out of Common Stream operations, Carrier or Carrier's authorized representative shall calculate adjustments for the value of Crude Petroleum of different sulfur content in the manner described herein.
A. A "Sulfur Value" in $/wt% S shall be utilized and shall initially be set at $1.00/wt% S. If desired by Shippers, the Sulfur Value shall be reviewed at the end of each calendar year by an industry consultant. The consultant, if desired by the majority of Regular Shippers, counting all affiliated Shippers as one Regular Shipper, will conduct a study and recommend adjustments to the Sulfur Value as deemed necessary based on a review of oil prices for crudes of like gravity and quality except for sulfur content. The consultant shall perform a regression analysis to determine Sulfur Value for the following year. Since there are insufficient postings in California to perform such a regression, the consultant may consider domestic and foreign crude oil in other regions of the United States to review the Sulfur Value. If the consultant recommends a change to Sulfur Value in the range of $0.50/wt% S to $1.50/wt% S, rounded to the nearest $0.01/wt% S, the Shippers shall adopt this recommendation. If the recommended Sulfur Value is outside of this range, the recommendation shall not be binding on the Shippers, but the recommendation may be adopted by a majority vote of Regular Shippers, counting all affiliated Shippers as one Regular Shipper. If the consultant recommendation is not adopted by a majority of the Regular Shippers, the Sulfur Value will remain unchanged from the prior calendar year.
11. At the close of each month, each Shipper's weighted average sulfur content (% S by weight) shall be determined for all crude oil received from that Shipper into Carrier's Common Stream. Each Shipper's weighted average sulfur content shall be determined by dividing the total number of barrels received from that Shipper into the sum of the products obtained by multiplying the quantity of barrels received from that Shipper by the sulfur content per barrel of the receipt.
12. At the close of each month, the weighted average sulfur content shall be determined for all crude oil received from all Shippers into Carrier's Common Stream. The weighted average sulfur content per barrel of the Common Stream will be determined by dividing the total number of barrels received from all Shippers into the sum of the products obtained by multiplying each receipt volume in such stream by its corresponding sulfur content per barrel.
13. If the weighted average sulfur content per barrel of oil received from a Shipper is less than the weighted average sulfur content per barrel of Carrier's Common Stream, then the Shipper's account shall be credited by an amount which shall be calculated by:
(a) multiplying the differences in sulfur content per barrel by the total barrels received from such Shipper during the month; and,
(b) multiplying the result in (a) by the "Sulfur Value" referred to in Item 150.10.A.
14. If the weighted average sulfur content per barrel of oil received from a Shipper is more than the weighted average sulfur content per barrel of Carrier's Common Stream, then the Shipper's account shall be debited by an amount which shall be calculated by:
(a) multiplying the differences in sulfur content per barrel by the total barrels received from such Shipper during the month; and
(b) multiplying the result in (a) by the "Sulfur Value" referred to in Item 150.10.A.
15. Likewise, in a similar manner each month, the respective weighted average sulfur content per barrel shall be determined for deliveries of all Common Stream crude oil at Avon, CA, Coalinga, CA, or into SJVB at Coalinga. Similar calculations and adjustments to each Shipper's account shall be made as follows:
If the weighted average sulfur content per barrel of oil delivered to a Shipper is less than the weighted average sulfur content per barrel of Carrier's Common Stream, then the Shipper's account shall be debited by an amount which shall be calculated by:
(a) multiplying the differences in sulfur content per barrel by the total barrels delivered to such Shipper during the month; and
(b) multiplying the result in (a) by the "Sulfur Value" referred to in Item 150.10.A.
If the weighted average sulfur content per barrel of oil delivered to a Shipper is more than the weighted average sulfur content per barrel of Carrier's Common Stream, then the Shipper's account shall be credited by an amount which shall be calculated by:
(a) multiplying the differences in sulfur content per barrel by the total barrels delivered to such Shipper during the month; and
(b) multiplying the result in (a) by the "Sulfur Value" referred to in Item 150.10.A.
16. Carrier or Carrier's authorized representative shall net out each Shipper's sulfur differential account and shall render a monthly accounting to each Shipper stating the net credit or debit balance of each Shipper's sulfur differential account. Shippers having a net debit balance shall remit to Carrier or Carrier's authorized representative the amount of the net debit balance within ten (10) days from receipt of the statement of such debit. Carrier or Carrier's authorized representative shall remit the amount of a net credit balance to any Shipper having a net credit balance, after Carrier or Carrier's authorized representative has received the sums from those Shippers having debits. Carrier or Carrier's authorized representative's obligations and liabilities with respect to sulfur differential accounting and adjustments are limited to those specified in the tariff.
17. In order to complete the balance on sulfur for a Common Stream such as SJVH, deliveries into tankage at Coalinga, deliveries directly into SJVB at Coalinga, and deliveries of SJVH at Avon will be treated as destination locations in the monthly analysis.
18. Samples will be collected and tested for sulfur for each receipt and delivery custody ticket number and a duplicate sample will be retained for ninety (90) days after the month of collection. The sample will be tested for sulfur according to an ASTM standard suitable for the API gravity range and typical BS&W content of the sample such as ASTM Standard D-1552 or another method as mutually agreed such as ASTM Standard D-5453. Shipper shall have the right to request a retest of the retain sample for sulfur determination. Requests for retesting must be received by Carrier in writing within thirty (30) days following the end of the month in which the receipt or delivery occurred. Requests beyond the thirty (30) day period will not be honored. Shipper will identify the sample to be retested by the custody ticket number and Carrier will submit a retention sample to a mutually agreed upon laboratory. If the results of the laboratory differ by more than the allowed reproducibility between the original and the second, agreed upon laboratory as defined by ASTM Standard D-1552, then the results of the second laboratory shall be used in the sulfur determinations. The cost of retesting shall be borne by the Shipper.
19. These calculations shall be made for each calendar month and the sum of the adjustments for the system shall be zero +/- One Dollar. If a Shipper shall have a net debit balance in combining the two adjustments made above, the balance shall be remitted to the Carrier within fifteen (15) days from receipt of statement of such debit. If a Shipper shall have a credit, the Carrier shall remit the amount thereof after receipt by the Carrier of the sums from those Shippers having debits as calculated above.
20. Carrier will provide at the end of each month a record of the Shipper's calculation and debit or credit amount.
EXHIBIT "A" TABLES OF DIFFERENTIALS FOR USE IN DETERMINING ADJUSTMENTS FOR | |||||||
API |
DIFF |
API |
DIFF |
API |
DIFF |
API |
DIFF |
10.0 |
0.000 |
15.0 |
2.250 |
20.0 |
4.500 |
25.0 |
6.750 |
10.1 |
0.045 |
15.1 |
2.295 |
20.1 |
4.545 |
25.1 |
6.795 |
10.2 |
0.090 |
15.2 |
2.340 |
20.2 |
4.590 |
25.2 |
6.840 |
10.3 |
0.135 |
15.3 |
2.385 |
20.3 |
4.635 |
25.3 |
6.885 |
10.4 |
0.180 |
15.4 |
2.430 |
20.4 |
4.680 |
25.4 |
6.930 |
10.5 |
0.225 |
15.5 |
2.475 |
20.5 |
4.725 |
25.5 |
6.975 |
10.6 |
0.270 |
15.6 |
2.520 |
20.6 |
4.770 |
25.6 |
7.020 |
10.7 |
0.315 |
15.7 |
2.565 |
20.7 |
4.815 |
25.7 |
7.065 |
10.8 |
0.360 |
15.8 |
2.610 |
20.8 |
4.860 |
25.8 |
7.110 |
10.9 |
0.405 |
15.9 |
2.655 |
20.9 |
4.905 |
25.9 |
7.155 |
11.0 |
0.450 |
16.0 |
2.700 |
21.0 |
4.950 |
26.0 |
7.200 |
11.1 |
0.495 |
16.1 |
2.745 |
21.1 |
4.995 |
26.1 |
7.245 |
11.2 |
0.540 |
16.2 |
2.790 |
21.2 |
5.040 |
26.2 |
7.290 |
11.3 |
0.585 |
16.3 |
2.835 |
21.3 |
5.085 |
26.3 |
7.335 |
11.4 |
0.630 |
16.4 |
2.880 |
21.4 |
5.130 |
26.4 |
7.380 |
11.5 |
0.675 |
16.5 |
2.925 |
21.5 |
5.175 |
26.5 |
7.425 |
11.6 |
0.720 |
16.6 |
2.970 |
21.6 |
5.220 |
26.6 |
7.470 |
11.7 |
0.765 |
16.7 |
3.015 |
21.7 |
5.265 |
26.7 |
7.515 |
11.8 |
0.810 |
16.8 |
3.060 |
21.8 |
5.310 |
26.8 |
7.560 |
11.9 |
0.855 |
16.9 |
3.105 |
21.9 |
5.355 |
26.9 |
7.605 |
12.0 |
0.900 |
17.0 |
3.150 |
22.0 |
5.400 |
27.0 |
7.650 |
12.1 |
0.945 |
17.1 |
3.195 |
22.1 |
5.445 |
27.1 |
7.695 |
12.2 |
0.990 |
17.2 |
3.240 |
22.2 |
5.490 |
27.2 |
7.740 |
12.3 |
1.035 |
17.3 |
3.285 |
22.3 |
5.535 |
27.3 |
7.785 |
12.4 |
1.080 |
17.4 |
3.330 |
22.4 |
5.580 |
27.4 |
7.830 |
12.5 |
1.125 |
17.5 |
3.375 |
22.5 |
5.625 |
27.5 |
7.875 |
12.6 |
1.170 |
17.6 |
3.420 |
22.6 |
5.670 |
27.6 |
7.920 |
12.7 |
1.215 |
17.7 |
3.465 |
22.7 |
5.715 |
27.7 |
7.965 |
12.8 |
1.260 |
17.8 |
3.510 |
22.8 |
5.760 |
27.8 |
8.010 |
12.9 |
1.305 |
17.9 |
3.555 |
22.9 |
5.805 |
27.9 |
8.055 |
13.0 |
1.350 |
18.0 |
3.600 |
23.0 |
5.850 |
28.0 |
8.100 |
13.1 |
1.395 |
18.1 |
3.645 |
23.1 |
5.895 |
28.1 |
8.145 |
13.2 |
1.440 |
18.2 |
3.690 |
23.2 |
5.940 |
28.2 |
8.190 |
13.3 |
1.485 |
18.3 |
3.735 |
23.3 |
5.985 |
28.3 |
8.235 |
13.4 |
1.530 |
18.4 |
3.780 |
23.4 |
6.030 |
28.4 |
8.280 |
13.5 |
1.575 |
18.5 |
3.825 |
23.5 |
6.075 |
28.5 |
8.325 |
13.6 |
1.620 |
18.6 |
3.870 |
23.6 |
6.120 |
28.6 |
8.370 |
13.7 |
1.655 |
18.7 |
3.915 |
23.7 |
6.165 |
28.7 |
8.415 |
13.8 |
1.710 |
18.8 |
3.960 |
23.8 |
6.210 |
28.8 |
8.460 |
13.9 |
1.755 |
18.9 |
4.005 |
23.9 |
6.255 |
26.9 |
8.505 |
14.0 |
1.800 |
19.0 |
4.050 |
24.0 |
6.300 |
29.0 |
8.550 |
14.1 |
1.845 |
19.1 |
4.095 |
24.1 |
6.345 |
29.1 |
8.595 |
14.2 |
1.890 |
19.2 |
4.140 |
24.2 |
6.390 |
29.2 |
8.640 |
14.3 |
1.935 |
19.3 |
4.185 |
24.3 |
6.435 |
29.3 |
8.685 |
14.4 |
1.980 |
19.4 |
4.230 |
24.4 |
6.480 |
29.4 |
8.730 |
14.5 |
2.025 |
19.5 |
4.275 |
24.5 |
6.525 |
29.5 |
8.775 |
14.6 |
2.070 |
19.6 |
4.320 |
24.6 |
6.570 |
29.6 |
8.820 |
14.7 |
2.115 |
19.7 |
4.365 |
24.7 |
5.615 |
29.7 |
8.865 |
14.8 |
2.160 |
19.8 |
4.410 |
24.8 |
6.660 |
29.8 |
8.910 |
14.9 |
2.205 |
19.9 |
4.455 |
24.9 |
6.705 |
29.9 |
8.955 |
EXHIBIT "B"
SAMPLE QUALITY BANK CALCULATION
SAN PABLO BAY PIPELINE SYSTEM COMMON STREAM SJV CRUDE
RECEIPT BANK
SHIPPER |
BBLS |
API GRAV |
FROM EXH."A" |
BBLS RECD. X |
REC'D |
||||
A |
100.00 |
13.0 |
1.350 |
135.00 |
B |
150.00 |
14.1 |
1.845 |
276.75 |
C |
100.00 |
13.7 |
1.665 |
166.50 |
C |
200.00 |
12.0 |
0.900 |
180.00 |
TOTAL |
550.00 |
758.25 |
Common stream weighted average GRAVITY value: 758.25/550= |
1.37864 |
|
Shipper A: |
||
Weighted average GRAVITY value: 135.00/100= |
1.350 |
|
Calculation: (1.37864 - 1.350) x 100 = |
2.86 | |
Total Shipper A pays the bank: |
$2.86 | |
Shipper B: |
||
Weighted average GRAVITY value: 276.75/100= |
1.845 |
|
Calculation: (1.37864 - 1.845) x 150 = |
-69.95 | |
Total Shipper B receives from the bank: |
$(69.95) | |
Shipper C: |
||
Weighted average GRAVITY value: 346.5/300= |
1.155 |
|
Calculation: (1.37864 - 1.155) x 300 = |
67.09 | |
Total Shipper C pays to the bank: |
$67.09 | |
NET |
$0.00 |
DELIVERY BANK
SHIPPER |
BBLS REC'D |
API |
FROM "A" |
BBLS REC'D X |
A |
90.00 |
12.5 |
1.125 |
101.25 |
B |
140.00 |
13.0 |
1.350 |
189.00 |
C |
90.00 |
13.7 |
1.665 |
149.85 |
C |
210.00 |
13.2 |
1.440 |
302.40 |
TOTAL |
530.00 |
742.50 | ||
Common stream weighted average GRAVITY value: |
742.5 / 530 = |
1.40094 | ||
Shipper A: |
||||
Weighted average GRAVITY value: 101.25/90= |
1.125 |
|||
Calculation: (1.125 - 1.40094) x 90 |
-24.83 | |||
Total Shipper A receives from the bank: |
$(24.83) | |||
Shipper B: |
||||
Weighted average GRAVITY value: 189.00/140= |
1.350 |
|||
Calculation: (1.3501 - 1.40094) x 140 |
-7.13 | |||
Total Shipper B receives from the bank: |
$(7.13) | |||
Shipper C: |
||||
Weighted average GRAVITY value: 452.24/300 |
1.508 |
|||
Calculation: (1.508 - 1.40094) x 300 = |
31.97 | |||
Total Shipper C pays the bank: |
$31.97 | |||
NET |
$0.00 | |||
(END OF ATTACHMENT A)
