15 AAC 55.180. Choice of methods for determining reasonable cost of transportation

(a) Except as provided in (b) of this section, the reasonable cost of transportation is the actual cost of transportation as determined in 15 AAC 55.191(a) and (b), if the actual costs incurred are ordinary and necessary transportation expenses.

(b) The reasonable cost of transportation is the fair market value as defined in 15 AAC 55.191(h) if all of the following conditions exist:

(1) the parties to the transportation of oil or gas are affiliated;

(2) the contract for the transportation of oil or gas is not an arm's-length transaction or is not representative of the market value of the transportation; and

(3) the method of transportation of oil or gas is not reasonable in view of existing alternative methods of transportation.

History: Eff. 1/6/80, Register 73; am 1/1/95, Register 132; am 1/1/2000, Register 152

Authority: AS 43.05.080

AS 43.55.020

AS 43.55.110

AS 43.55.150

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