America’s energy market regulator, known as the Federal Energy Regulatory Commission (FERC), has issued a suggested policy statement providing guidance for oil and petroleum products pipeline operators, concerning tariff rates and terms of conditions related to affiliate contracts.
FERC’s detailed proposals allow affiliates to continue to take part in oil pipeline open seasons and even become committed shippers on their affiliated pipelines. In addition, the guidance would not prevent oil pipeline carriers from fulfilling contract rates and terms and conditions pursuant to
affiliate contracts. It is made clear that the proposed guidance is not intended to reflect any view by the federal energy regulator, that pipelines are currently engaging in practices that afford their affiliates an undue preference, or that they unduly discriminate against non-affiliated shippers in open seasons, or that affiliate contracts are inherently discriminatory.
In fact, the proposed guidance is divided into four categories, these are:
1. Identifying affiliate contracts.
2. Information that could demonstrate an open season process was not unduly discriminatory.
3. Methods for showing that rates and terms pursuant to an affiliate contract are just,
reasonable and not unduly discriminatory.
4. Ensuring that sufficient access to pipeline capacity is reserved for uncommitted shippers.