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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Regulatory Commission of Alaska v. Tesoro Alaska Company (03/21/2008) sp-6239

Regulatory Commission of Alaska v. Tesoro Alaska Company (03/21/2008) sp-6239, 178 P3d 1159

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

REGULATORY COMMISSION OF )
ALASKA, STATE OF ALASKA, and) Supreme Court Nos. S- 12352/12391
INDICATED TAPS CARRIERS,)
) Superior Court No. 3AN-03- 11523 CI
Petitioners/Cross-Respondents, )
) O P I N I O N
v. )
) No. 6239 March 21, 2008
TESORO ALASKA COMPANY and)
WILLIAMS ALASKA PETROLEUM,)
INC., )
)
Respondents/Cross-Petitioners. )
)
          Petitions for Review from the Superior  Court
          of   the  State  of  Alaska,  Third  Judicial
          District,   Anchorage,  Peter  A.  Michalski,
          Judge.

          Appearances:  Charles E. Cole, Law Offices of
          Charles   E.  Cole,  Fairbanks,  Stephan   H.
          Williams, Law Offices of Stephan H. Williams,
          Anchorage,   for  Petitioner/Cross-Respondent
          Regulatory   Commission  of  Alaska.    Ethan
          Falatko, Assistant Attorney General, Talis J.
          Colberg,   Attorney  General,   Juneau,   for
          Petitioner/Cross-Respondent State of  Alaska.
          Louis  R. Veerman, Pamela D. Weiss, Molly  C.
          Brown,  Guess & Rudd, P.C., Anchorage, Albert
          S.  Tabor,  Jr.,  John E. Kennedy,  Vinson  &
          Elkins     LLP,    Houston,    Texas,     for
          Petitioner/Cross-Respondent   BP    Pipelines
          (Alaska)  Inc., ConocoPhillips Transportation
          Alaska,  Inc.,  ExxonMobil Pipeline  Company,
          and Unocal Pipeline Company.  Robin O. Brena,
          David  W.  Wensel,  Brena, Bell  &  Clarkson,
          P.C.,    Anchorage,   for   Respondent/Cross-
          Petitioner  Tesoro Alaska Company.   Randolph
          L.  Jones,  Jr.,  Conner  &  Winters,  Tulsa,
          Oklahoma,   for   Respondent/Cross-Petitioner
          Williams Alaska Petroleum, Inc.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, and Carpeneti, Justices.   [Bryner,
          Justice, not participating.]

          MATTHEWS, Justice.


I.   INTRODUCTION
          In  2003  Tesoro  Alaska Company  and  Williams  Alaska
Petroleum,  Inc.,  protested the 19861996 rates  charged  by  the
owners  of  the  Trans-Alaska Pipeline  System.   The  Regulatory
Commission  of  Alaska denied their protest as untimely.   Tesoro
and  Williams appealed to the superior court, which remanded  the
case for further proceedings.  This court granted a petition  for
review.   We  reverse the order of the superior court and  direct
that the decision of the Regulatory Commission be affirmed.
II.  FACTS AND PROCEEDINGS
          The Trans-Alaska Pipeline System (TAPS) began operation
in  1977.   In  1986, after a prolonged dispute about  the  rates
charged  by  the owners of TAPS (collectively the Carriers),  the
State   of  Alaska  and  the  Carriers  submitted  an  Intrastate
Settlement  Agreement (hereinafter the Settlement) to the  Alaska
Public  Utilities Commission1 for approval.2  The Settlement  set
rates  from  the  beginning of the pipeline through  1986.   With
respect  to  future rates, the Settlement set rate ceilings,  but
parties  would  still  be  able to protest  rates  prospectively.
Under  the  Settlement, rates and rate ceilings  were  calculated
using  a  methodology unique to TAPS, called the TAPS  Settlement
Methodology, or TSM.
          The Commission opened Docket P-86-2 in 1986 to consider
the  Settlement. In Order P-86-2(14) (Order 14),  the  Commission
approved the Settlement as to the rates prior to 1986.  Order  14
emphasized the fact that the economically impacted parties . .  .
all  of  which  are  knowledgeable  and  sophisticated  and  have
sufficient  resources to make their views known to the Commission
and, further, have all had notice and an opportunity to be heard,
are  either  silent  or actively support the  imposition  of  the
settlement  rates.  As shippers, Tesoro and Williams3 were  among
the  economically  impacted parties who  actively  supported  the
Settlement.    Since   there  were  no  pending   objections   by
economically impacted parties for periods prior to July 11, 1986,
the Commission approved the rates contained in the Settlement for
that period only.
          One shipper, Petro Star, protested the Settlement rates
as  of  July  11,  1986. Because of this protest, the  Commission
began  the process of determining whether or not the rates  after
that time were just and reasonable.  Order 14 therefore suspended
          the TAPS rates as of July 11, 1986.4
          The  Commissions  investigation of the rates  continued
until 1991, at which time Petro Star and the Carriers submitted a
settlement  (the  Petro Star Settlement) to  the  Commission  for
approval.5  The Commission issued P-86-2(41) (Order 41)  in  1993
addressing   the   Petro  Star  Settlement  and  the   Intrastate
Settlement.   Order 41 accepted the Petro Star  Settlement.6   It
then found that since Petro Star had settled, there was no longer
an   economically  impacted  party  contesting  the  [Intrastate]
settlement.   Order  41 noted that 3 Alaska  Administrative  Code
(AAC)   48.090(d)(2)  enables  the  Commission  to  terminate   a
proceeding if all of the parties stipulate to such a termination,
provided  that  the  Commission did  not  find  that  the  public
interest   requires   the  proceeding  to  be   continued.    The
Commission,  referring to its earlier order   (Order  14),  found
that  the  economically  impacted entities,  including  shippers,
should be deemed . . . to be knowledgeable and sophisticated  and
in  possession of sufficient resources to make their views  known
to  the  Commission.  It also noted that they had notice  and  an
opportunity  to be heard.  Since no economically impacted  entity
was protesting the rates that had been calculated using TSM since
Order  14,  Order  41  held that the public  interest  [did]  not
require  the  proceeding to be continued.  It therefore  accepted
the Settlement.  Order 41 nonetheless continued the suspension of
the  rates  for 19861993 in order to determine that  those  filed
rates were correctly calculated under TSM.
          After  Order 41 was issued in 1993, Tesoro and Williams
did  not  file a motion for reconsideration and did  not  protest
that  the rates calculated under TSM for 19861993 were unjust  or
unreasonable.   Tesoro and Williams7 also  did  not  protest  the
rates  for  1994, 1995, or 1996.8  In late 1996, Tesoro protested
the  rates  filed  by  the  carriers for  1997.   The  Commission
promptly   suspended  the  1997  rates  and  embarked   upon   an
investigation of whether the rates were just and reasonable.   In
November  2002 the Commission issued P-97-004(151)  (Order  151),
which held that the rates set by the Carriers from 19972000  were
not  just  and reasonable and set new rates that were much  lower
than those filed by the Carriers.  Order 151 also noted that  the
Carriers rates through 1997 potentially exceeded their reasonable
costs of providing service by up to 9.9 billion dollars.9
          After  issuing Order 151, the Commission finally turned
its  attention  to the question of whether the  rates  filed  for
19861996  were  correctly calculated under TSM.  It  scheduled  a
prehearing  conference  in March 2003 to  determine  whether  any
party still believed it necessary to verify TSM calculations  and
inputs for 19861996.  A few days before the hearing, Tesoro filed
a  petition  to  intervene and a protest of the  19861996  rates.
Williams  moved  to  intervene shortly  thereafter.   Tesoro  and
Williams  asked  the Commission to adjudicate whether  the  rates
were  just and reasonable.10  The Commission in Order 68 declined
to  expand the scope of its investigation to look at whether  the
19861996  rates  were  just and reasonable  and  found  that  the
Shippers petition to intervene was not timely.
          The  Shippers  appealed  to the  superior  court.   The
          court, in an order dated June 7, 2006, remanded the matter for
further proceedings and instructed the Commission to determine if
it   properly  acted  in  excluding  appellants  as  economically
interested  parties, and emphasized that it should consider  each
year  at  issue  separately.  It also held  that  the  Commission
should  determine the just and reasonable rates for any years  in
which  the  appellants were improperly excluded,  and  for  those
years  from which the appellants were properly excluded, it  must
still  determine  whether  the  rates  at  issue  were  correctly
calculated   under  TSM.  The Commission, the Carriers,  and  the
State of Alaska filed a petition for review of the superior court
order.   Williams and Tesoro filed a cross-petition.   Both  were
granted,  with  instructions for each  side  to  file  a  single,
consolidated brief.11
III. STANDARD OF REVIEW
          When reviewing an order of a superior court acting as a
court  of  appeal  in  an  administrative agency  proceeding,  we
independently review the agency decision.12
          Under  the Pipeline Act, final orders of the Commission
are  subject  to  judicial review under AS  44.62.56044.62.570.13
Alaska  Statute 44.62.570(b), which is part of the Administrative
Procedures Act, provides that the inquiry
          extends  to  the  following  questions:   (1)
          whether the agency has proceeded without,  or
          in  excess of jurisdiction; (2) whether there
          was a fair hearing; and (3) whether there was
          a  prejudicial abuse of discretion.  Abuse of
          discretion  is established if the agency  has
          not  proceeded in the manner required by law,
          the order or decision is not supported by the
          findings,  or the findings are not  supported
          by the evidence.
          
          In  Jager  v.  State  we  held that  [t]he  commissions
decision  to conduct a rate investigation is similar to the  type
of  decision involving agency expertise in a mixed law  and  fact
setting subject to the reasonable basis standard of review . .  .
.14  When applying the reasonable basis test, we give deference to
the  agencys determination so long as it is reasonable, supported
by  the evidence in the record as a whole, and there is no  abuse
of discretion.15
          We  use our independent judgment in questions involving
statutory  interpretation.16  We review an agencys interpretation
of  its  own  regulations under the reasonable and not  arbitrary
standard.  .  . . [This] deferential standard of review  properly
recognizes that the agency is best able to discern its intent  in
promulgating the regulation at issue.17
IV.  DISCUSSION
     A.   The  APUC  May Set Rates Based on a Settlement  Without
          Adjudicating  Whether or Not the  Rates  Are  Just  and
          Reasonable.
          
          The  Shippers argue that once the [Commission] acts  to
set  rates,  the  Alaska Pipeline Act makes it clear  that  those
          rates must be just and reasonable, and they can only be set after
an  investigation  and  a  hearing.   While  conceding  that  the
Commission has the discretion to decide not to investigate  rates
when there is a reasonable basis for the decision[,] the Shippers
state  that  setting just and reasonable rates  on  TAPS  is  not
discretionary    it  is  mandatory.   (Emphasis  added.)    Thus,
according  to  the  Shippers,  it  may  be  appropriate  for  the
Commission  to refuse to initiate an investigation, but  once  it
does act it must finish the investigation and determine just  and
reasonable  rates.  If this were true, then the Commission  would
not be able accept a settlement between a protesting party and  a
Carrier once the Commission undertook a rate investigation  as  a
result of a protest.  For the reasons explained in the paragraphs
that follow we reject the Shippers position on this issue.
          Alaska   Statute   42.06.140(a)(2)  states   that   the
Commission may investigate upon complaint or its own motion,  the
rates  .  .  .  of pipeline carriers.  (Emphasis added.)   Alaska
Statute  42.06.140(a)(3)  states that the  Commission  may  make,
prescribe, or require just, fair and reasonable rates . .  .  for
pipeline  carriers.   (Emphasis added.)  This language  indicates
that  the  Commission has the discretion to determine whether  or
not  to  investigate rates or set new ones.  The use of the  term
may  in subsection .140(a)(3) counters the Shippers argument that
the Commission must set  rather than accept based on an agreement
rates that are just and reasonable.
          The   Shippers  point  to  mandatory  language  in   AS
42.06.370(a), which states that [a]ll rates demanded or  received
by  a  pipeline carrier, or by any two or more pipeline  carriers
jointly,  . . . shall be just and reasonable.  (Emphasis  added.)
But this language specifies what the Carriers are required to do,
not   what   the  Commission  is  required  to  do.   Subsections
.140(a)(2)(3)  fall under Article 1 of the Alaska  Pipeline  Act,
which  is entitled Powers and Duties of Regulatory Commission  of
Alaska.   Thus,  the language indicating that the Commission  has
discretion is found in the part of the Act outlining what  powers
and  duties  the Commission has.  Subsection .370(a) is  part  of
Article  4 of the Pipeline Act, which is entitled Rates and  Rate
Schedules.  The use of the word shall in subsection .370(a)  does
not mean that the Commission must investigate each and every rate
filed by a carrier.  Instead, it sets forth the relevant standard
for rates.
          The Shippers also point to the following language in AS
42.06.410(a):
          When  the  commission, after an investigation
          and  hearing,  finds that  a  rate  demanded,
          observed, charged, or collected by a pipeline
          carrier  for  a  service .  .  .  is  unjust,
          unreasonable,   unduly   discriminatory    or
          preferential, the commission shall  determine
          a  just  and reasonable rate, classification,
          rule, regulation, practice, or contract to be
          observed or allowed and shall establish it by
          order.
          
(Emphasis  added.)  The Shippers argue that this provision  means
that once the Commission initiates an investigation, it then  has
to  complete the investigation and set just and reasonable rates.
The  text  of  the  statute does not support this interpretation.
Subsection  .410(a)  requires the  Commission  to  set  just  and
reasonable  rates  if after an investigation  and  hearing,  [it]
finds  a  rate  . . . is unjust [or] unreasonable.  The  language
therefore indicates that subsection .410(a)s requirement  to  set
just  and  reasonable  rates  only  comes  into  play  after  the
Commission has completed an investigation and found a rate to  be
unjust  or unreasonable.  There is nothing in this language  that
requires  the  Commission  to  complete  every  investigation  it
initiates  or  suggests that the Commission lacks  the  statutory
authority to accept settlements once it has started investigating
a protest.
          The  Shippers note that Order 151, which dealt with the
19972000  rates,  found that the 19861996 rates  were  excessive.
The  Shippers  suggest that this means that  the  Commission  has
already  found the rates to be unjust and unreasonable  after  an
investigation and hearing and should therefore be required to set
just and reasonable rates under subsection .410(a).  While it  is
true  that  the  Commission incidentally reviewed the  rates  for
19861996  in  order  to determine whether or not  the  rates  for
19972000  were  reasonable, it is a  stretch  to  say  that  this
incidental  review  was  the  type of investigation  and  hearing
referred  to in subsection .410(a).  Subsection .410(a)s  use  of
the   term   investigation  and  hearing  refers  to   a   formal
investigation and hearing concerning the rates for the  years  in
question,  not an investigation and hearing concerning rates  for
other  years  that  incidentally  address  the  time  period   in
question.   If we were to find otherwise, then the Carriers,  who
were  not  informed  that the years 19861996 were  on  the  table
during the investigation of the 19972000 rates, would be deprived
of an opportunity to present a full case as to those years.
          Aside  from  their  statutory  argument,  the  Shippers
provide  no other support for the proposition that the Commission
may   not   accept  a  settlement  after  it  has  initiated   an
investigation.   The  Commission  provides  a  cogent   statutory
analysis  and  also relies on case law and its  own  regulations.
These  sources,  as we explain below, provide additional  support
for the Commissions position.
          The  Commission cites two relevant regulations.  First,
3 AAC 48.140(a) states that [i]nformal conferences of the parties
involved in an informal complaint or formal proceeding . . .  may
be held at any time to provide opportunity for the settlement . .
.  of  any  issues  or problems relating to any manner  whatever.
Second,  3  AAC 48.090(d)(2) states that [a]t any  stage  of  the
proceeding, prior to entry of the commissions final order .  .  .
the  proceeding may be terminated by filing a stipulation  agreed
to by all parties of record provided the commission does not find
that the public interest requires the proceeding to be continued.
Thus,  the regulations promulgated by the Commission provide  for
settlement  meetings  and set out the standard  under  which  the
Commission will accept a settlement.
          The  Commission  also relies on Arctic  Slope  Regional
Corp. v. Federal Energy Regulatory Commission.18  In Arctic Slope
a  corporation challenged the Interstate Settlement (under  which
TSM  was used to calculate interstate rates).19  The corporations
argument was similar to that of the Shippers: once the agency has
substantially  completed an investigation, it is obliged  to  see
the  matter through to completion and determine whether the rates
were  just  and  reasonable.20  The D.C. Circuit  looked  to  the
Commissions rules governing settlements and noted that they  were
quite broadly worded.21  It found that neither the statute nor the
agencys corpus of rules requires the Commission under any and all
circumstances to prescribe just and reasonable rates  whenever  a
party   requests   that  it  do  so,  even  after  administrative
proceedings  have  been  underway for some  considerable  time.22
While  Arctic  Slope relies on federal statutes  and  rules,  its
commonsense finding that FERC may accept a settlement even  after
a rate investigation has begun is persuasive.
          The  only related Alaska case, Jager v. State,23 is not
on  point.   That  case  dealt  with  a  situation  in  which   a
residential  customer, Jager, challenged  natural  gas  rates  as
discriminatory.24  Based on the memoranda and exhibits  submitted
prior  to  the formal hearing, [the Commissions predecessor,  the
Public  Utilities  Commission]  concluded  that  Jager  had   not
established a prima facie case requiring an investigation of  the
entire  rate structure.25  This court disagreed and remanded  the
case  for further proceedings.26  Nonetheless, the Jager  opinion
acknowledges the broad discretionary authority the Commission has
over rate investigations:
          There is no right to have the commission act.
          The   matter   of  rate  discrimination   and
          investigation  is  such that  the  commission
          must  be  free to weigh the charges and  data
          presented  and  the costs to the  public  and
          utility,  against which a complaint has  been
          brought,   to   determine   whether   further
          proceedings are in the public interest.[27]
          
Jager does not address the question of whether the Commission can
accept  a  settlement once an investigation has  been  initiated.
Further,  the  situation  in  Jager  cannot  be  likened  to  the
situation at hand, because in Jager there was a pending complaint
that had not been rejected on grounds of untimeliness.  For these
reasons, Jager is not helpful to the Shippers.
          Finally,  the Commission correctly argues  that  Alaska
law  has  long  recognized  the  general  policy  of  encouraging
settlement  of  litigation.   Stipulations  and  settlements  are
favored  in  law  because  they  simplify,  shorten,  and  settle
litigation without taking up valuable court resources. 28   These
concerns are no less compelling in a regulatory context  than  in
the  court  system  they might even be more compelling given  the
highly  technical and complex nature of many regulatory  disputes
and the significant resources required to resolve them.
          For the reasons expressed above, we reject the Shippers
argument on the question under review.
     B.   The  Commission Had a Reasonable Basis for  Denying  as
     Untimely the Shippers Challenge of the 19861996 Rates.
          
          The  Shippers also argue that the Commission  erred  by
concluding in Order 68 that their 2003 petitions to intervene and
protest the 19861996 rates were untimely. As described above, the
Commission  decided to adjudicate the justness and reasonableness
of  the rates established by TSM in response to a rate protest by
Petro  Star  in  1986.  After Petro Star settled, the  Commission
accepted  the  Intrastate Settlement in 1993,  but  continued  to
suspend  the post-July 11, 1986 rates solely for the  purpose  of
determining  whether they were correctly calculated  pursuant  to
TSM.  It still had not made this determination by late 1996, when
the  Shippers protested the 1997 rates.  The Commission  did  not
reach  the  question of whether the 19861996 rates were correctly
calculated under TSM for some time after that, in part because it
was  dealing with the 1997 rate protest.
          After the Commission had completed its investigation of
the  19972000  rates  and issued Order  151,  it  turned  to  the
19861996 rates and scheduled a prehearing conference to  be  held
on  March  7, 2003, to determine whether any party still believed
it  necessary to verify TSM calculations and inputs for 19861996.
Shortly  before this hearing took place, Tesoro filed  a  protest
and  a  petition to intervene.  Williams intervened a  couple  of
days later.  After receiving briefing by Shippers, the State, and
the Carriers, the Commission issued Order 68 in 2003.
          In  Order  68  the  Commission noted  that  Tesoro  and
Williams  wanted to expand the present scope of Docket P-86-2  to
hold a hearing and rule on the justness and reasonableness of the
19861996  intrastate  TAPS rates.  The Commission  decline[d]  to
expand  the  issues in [the] docket, because  fairness,  and  the
reasonable  reliance of the TAPS Carriers on [Order  41]  require
that [it] follow that orders clear intent.
          In  denying the Shippers request, the Commission relied
on its regulations regarding protests and petitions to intervene.29
This  court  review[s]  an  agencys  interpretation  of  its  own
regulations  under  the  reasonable and  not  arbitrary  standard
.   .  .  .   [This]  deferential  standard  of  review  properly
recognizes that the agency is best able to discern its intent  in
promulgating  the  regulation at issue.30   We  will  uphold  the
Commissions  decision in Order 68 to deny the Shippers  challenge
to  the  19861996  rates  as untimely if  the  Commission  had  a
reasonable   basis  for  making  it.   A  reasonable   basis   is
established  if  the  Commissions decision is  supported  by  the
evidence in the record as a whole.31
          With   respect  to  the  petition  to  intervene,   the
Commission  denied  it on the basis of 3 AAC 48.110(b)  and  (d).
Subsection  (b)  of  AAC 48.110 states that  [i]n  passing  on  a
petition  to intervene the Commission should consider the  extent
to  which participation of the petitioner will broaden the  issue
or delay the proceeding.32  Subsection (d) of 3 AAC 48.110 states
that  a  petition for permission to intervene must be filed  with
the commission before the first prehearing conference . . . .   A
petition  for  permission to intervene which is not timely  filed
will  be dismissed unless the petitioner clearly shows good cause
          for failure to file that petition on time.
          With  respect  to  the  rate protests  before  it,  the
Commission  relied  on 3 AAC 48.290(a).  This  regulation  states
that
          [a]ny  person desiring to submit a  statement
          of  interest  in, or objection to,  a  tariff
          filing  may be asked to do so not later  than
          20  days  after the date of delivery  to  the
          commission  unless a longer  period,  not  in
          excess  of  30  days, is  granted  by  public
          notice or by notice in writing.
          
          In  Order  68,  the Commission found that the  Shippers
petitions  to  intervene were untimely under 3 AAC 48.110(d)  and
also  should  be denied under 3 AAC 48.110(b) since, if  granted,
they   would   have  improperly  broadened  the  scope   of   the
proceedings.   The  Commission  also  found  that  the   Shippers
protests  were untimely under 3 AAC 48.290(a).  As  is  discussed
below, the Commission had a reasonable basis for these holdings.
          1.   The Shippers did not timely challenge the 19861993
               rates.
          After   the  State  and  the  Carriers  submitted   the
Intrastate  Settlement to the Commission in 1986, the  Commission
issued Order 14.  Order 14 approved the portion of the Settlement
dealing with the time period prior to July 11, 1986.  Since Petro
Star  protested  the  rates established  by  TSM  as  unjust  and
unreasonable on July 11, 1986, the Commission noted that there is
no  consent  of the directly affected entities after  that  date.
Order  14  therefore  held that the Commission  was  required  to
determine just and reasonable rates for periods after that  date.
This  rate  investigation extended through 1991,  at  which  time
Petro Star and the Carriers submitted a settlement agreement  for
approval by the Commission.  In 1993 the Commission issued  Order
41,  which  accepted  both  the Petro  Star  Settlement  and  the
Intrastate Settlement.33
          The Shippers did not petition to intervene in the Petro
Star  protest  on the issue of whether the rates  were  just  and
reasonable  until  2003.   Under 3 AAC  48.110(d),  the  Shippers
should  have  intervened before the first prehearing  conference,
which was held in January 1987.34  The Shippers argue that it  is
unfair  to require them to intervene in 1987 in order to have  an
opportunity  to  be heard on the TAPS Carriers  rate  filings  in
1988,  1989, 1990, 1991, 1992, 1993, 1994, 1995, and 1996.   This
mischaracterizes the rule.  The Shippers had to intervene  before
the  January 27, 1987 prehearing conference in order to intervene
in  Petro Stars protest of the 1987 rates.  Subsection (d)  of  3
AAC  48.110  requires a showing of good cause  if  they  were  to
protest  after that date.  Once the rate investigation  continued
past the first year, the Shippers might still have had good cause
to intervene as to prospective years.
          Alternatively, the Shippers could have timely protested
each temporary rate that was filed.  The Commission suspended the
rates  filed every year between 1987 and 1993, noting  that  they
were under investigation as just and reasonable, and if they were
          found to be appropriate, the Commission would determine if they
were  correctly  calculated under TSM.  These rate  filings  were
published  along  with a deadline for filing  protests.   Nothing
stopped the Shippers from timely protesting prospective rates  as
they  were  filed.  The key point is that they did  nothing.   No
petitions to intervene or protests were filed as to the  justness
and reasonableness of the rates until 2003.
          By  failing to intervene in Petro Stars protest  as  to
whether  the  rates from 19861993 were reasonable,  the  Shippers
gained  an  advantage.  They did not have to pay for costly  rate
litigation but would have nonetheless reaped the benefits of  any
success  Petro Star may have had in lowering the rates.   At  the
same  time  they  ran a risk that Petro Star would  settle.   The
interests  of  justice and fairness are not served by  permitting
the  Shippers to wait on the sidelines for years and only attempt
to  intervene  as  to  the past rates when Petro  Star  tried  to
settle.   Had the Shippers filed a petition to intervene  between
1991 and 199335 with respect to the 19861993 rates, the Commission
might  very  well  have had a reasonable basis  for  denying  the
petition as untimely.36  But the Shippers waited another ten years
before  trying to intervene.  They have shown no good  cause  for
waiting  until  2003,37 and we therefore uphold  the  Commissions
determination that the petition to intervene was untimely under 3
AAC 48.110(d).38
          Subsection  (b)  of  3 AAC 48.110 provides  a  separate
ground  for  denying  the Shippers petitions  to  intervene.   It
states  that  the  Commission will consider the extent  to  which
participation of the petitioner will broaden the issue.39  As  is
discussed below, Order 41 accepted the Intrastate Settlement  and
continued  to suspend the filed rates for the limited purpose  of
determining whether they were correctly calculated under TSM.  If
the  Commission had accepted the petition to intervene as to  the
issue  of  whether the rates were just and reasonable,  it  would
have significantly broadened the issues before it.  Therefore the
Commission had a reasonable basis for denying the petition  based
on 3 AAC 48.110(b) as well.
          In  2003  the  Shippers also separately  protested  the
19861993 rates as unjust and unreasonable.  This protest  of  the
19861993   rates  was  untimely  under  3  AAC  48.290(a).    The
Commission published notice of temporary rates filed during  that
time  and deadlines for objections.  The Shippers did not protest
any  of  the  rates.   The rates were suspended  because  of  the
pending  rate  investigation, but  there  is  nothing  in  3  AAC
48.290(a)  to  suggest that there is no deadline  for  protesting
suspended rates.  Subsection (a) of 3 AAC 48.290 states that  the
deadline applies to a tariff filing not just to permanent  tariff
filings.   To find that the timeliness requirement did not  apply
to  suspended  rates  would be problematic, since  any  time  one
entity  protested rates in any way, another entity would be  able
to protest any facet of the rates at any time.
          The  Shippers  argue  that 3  AAC  48.290(a)  does  not
govern, and instead the Commissions regulations allow protests  .
.  . to be filed at any time.  They argue that 3 AAC 48.130(a)(4)
only  requires  that  a protest comply with  3  AAC  48.0903  AAC
          48.100.  According to the Shippers, 3 AAC 48.290(a) only
addresses  the  manner  in which a member of  the  public  should
respond to a public notice of a filing.
          This  argument has no merit.  Part 7 of Title 3 of  the
Alaska  Administrative  Code covers the Commission.   Chapter  48
deals with the Commissions practices and procedures.  Part  1  of
Chapter  48,  which contains 3 AAC 48.090100 and  3  AAC  48.130,
outlines  practice before the Commission.  These  provisions  are
not   limited   to  Pipeline  proceedings  and  therefore   cover
procedural requirements for all of the entities regulated by  the
Commission.    The   provisions  set   out   detailed   technical
requirements for formal complaints filed before the Commission.
          The  Shippers argue that because Part 1 of  Chapter  48
contains no timeliness requirement, none exists.  However, as the
Commission  notes,  [t]he requirement that a  protest  adhere  to
formal  and technical pleading requirements does not support  the
conclusion  that  timeliness requirements . .  .  established  in
other  relevant regulations do not apply.  Part 2 of  Chapter  48
expressly  deals  with Utility and Pipeline Tariffs.   This  part
contains  3  AAC 48.290(a), which states that the Commission  may
impose  deadlines  for protests.  The Commissions  interpretation
that this regulation covers protests by parties is reasonable and
one to which we defer.
          In summary, the Commissions regulations provide it with
a reasonable basis for denying as untimely the Shippers petitions
to  intervene  and protests of the 19861993 rates.  The  Shippers
did  not  timely  petition to intervene in Petro  Stars  protest.
They did not protest any of the suspended rates filed during that
time  period.   They  did not petition to  intervene  as  to  the
justness and reasonableness of the rates for any additional years
after 1987.  Order 41 clearly set out the need to protest and the
fact  that, absent a protest, the Commission was going to  accept
the  Settlement and rates correctly calculated under  TSM.   When
Order 41 came out in 1993 the Shippers still did not protest  the
19861993 rates.  Instead they waited almost a decade before  they
tried   to   challenge   the  rates   based   on   justness   and
reasonableness.  They have shown no good cause for such a  delay.
Accordingly, we uphold the Commissions finding.
          2.   The Shippers did not timely challenge the 19941996
               rates.
          Order 41 put the Shippers on notice that they needed to
protest  future  rate filings in order to ensure that  the  rates
would  be investigated.  Order 41 noted that Petro Star  was  the
only   economically   impacted   party   which   requested    the
establishment of just and reasonable rates and that  after  Petro
Star  withdrew from the docket due to its settlement there  would
no  longer  be  an  economically impacted  party  contesting  the
[Intrastate]  settlement.   It  also  noted  that  under  3   AAC
48.090(d)(2) the Commission could terminate the proceeding  prior
to  issuing  a  final order if a stipulation is filed,  which  is
agreed  to by all parties of record provided the commission  does
not  find that the public interest requires the proceeding to  be
continued.   It relied on Order 14 to interpret[] the phrase  all
parties  of record to include only economically impacted parties,
and then held the following:
          Under the standard articulated in [Order  14]
          the  directly affected entities  (which  were
          deemed  by the Commission to be knowledgeable
          and   sophisticated  and  in  possession   of
          sufficient  resources  to  make  their  views
          known  to the Commission and which had notice
          and  an  opportunity to be heard) must either
          actively support the settlement or be  silent
          on the issue.  TSM rates have been calculated
          and filed for six years since the Commissions
          acceptance of past rates in [Order  14].   In
          that time no economically impacted entity has
          protested those rates . . . .
          
          The  Commission also noted that its own staff  and  the
Alaska   Public  Interest  Research  Group  still   opposed   the
Settlement, but found the following:
          Those  parties  have  not  demonstrated   any
          plausible  reason  why the Commission  should
          mandate  litigation of rates which are  being
          charged  by  the Carriers without protest  by
          any  ratepayer or other economically impacted
          entity.   Entities impacted by  oil  pipeline
          rates    are   sophisticated   and    capable
          financially  and  practically  of  protecting
          their  own  interests.   Not  one  has   come
          forward   to  contest  the  TAPS  Settlement.
          Under   these   circumstances,   the   public
          interest   does   not   require   that   this
          proceeding be continued.  The TAPS Settlement
          should  be accepted, subject to the condition
          that  Petro  Star file a notice of withdrawal
          in Docket P-86-2.
          
Thus, based on the fact that there were no pending protests filed
by  economically  impacted entities, Order 41 accepted  the  TAPS
Settlement  and specified that the TAPS Carriers  were  under  an
obligation to file TAPS rates no higher than the maximum  tariffs
calculated  under  TSM.   The  emphasis  on  the  fact  that  the
Commission  only accepted the Settlement because no  economically
impacted  entity contested it gave the Shippers notice that  they
had to protest a Settlement rate before it would be investigated.
          The  complicating factor is that Order 41 held that the
suspension of the TSM rates filed between 1986 and 1993 would not
be vacated until the Commission determined that those filed rates
were  correctly calculated under TSM.40  The Shippers argue  that
the  rates  for 19861996 were not final because they  were  still
suspended.  Therefore, according to the Shippers, they  were  not
required to object to the rates in a timely manner.
          This  argument is unpersuasive.  Order 41 is clear that
it  accepted the Settlement and only suspended the rates for  the
limited  purpose  of  determining whether  they  were  calculated
correctly   under   the  TSM  methodology  established   by   the
          Settlement.  Order 41 also makes it clear that the Shippers would
have  to  protest  future rates in a timely manner  in  order  to
obtain an adjudication of the question of whether the rates  were
just  and reasonable, as opposed to the question of whether  they
were  correctly calculated under TSM.  It states that [e]ach  new
rate  filed  by the TAPS Carriers under the Intrastate Settlement
Agreement  is  considered  a  revised  tariff  filing  under   AS
42.06.400.  Alaska Statute 42.06.400(a) governs the suspension of
tariff  filings.  It states that [w]hen a tariff filing  is  made
containing  an initial or revised rate . . . the commission  may,
either  upon  written  complaint or upon its  own  motion,  after
reasonable   notice,   conduct  a  hearing   to   determine   the
reasonableness  and  propriety of the filing.  (Emphasis  added.)
Subsection  .400(a)  then  goes on to  discuss  the  process  for
suspending  the  operation of a tariff [p]ending  a  hearing.  By
referring  to this statute, Order 41 put the Shippers  on  notice
that  they must protest a rate to ensure an adjudication  of  its
reasonableness.
          Order  41 also stated that each new rate filed  by  the
Shippers is subject to the same standards and procedures to which
it would have been subject if the Intrastate Settlement Agreement
had   not  been  accepted.   As  discussed  above,  one  of   the
regulations  governing  the  filing  of  a  new  rate  is  3  AAC
48.290(a),  which enables the Commission to set  a  deadline  for
objecting  to rates.  The Commission provided public  notice  and
notice  to  the Shippers of the Carriers rate filings  for  1994,
1995,  and  1996,  and  this  notice  included  a  deadline   for
objections.
          Therefore,  even though the Commission stated  that  it
was  going  to  suspend the rates in order  to  review  them  for
compliance  with the Settlement, Order 41 gave clear notice  that
this  review  would not include a determination  of  whether  the
rates were just and reasonable.  The Shippers were informed  that
each  rate filing after 1993 would be considered a revised tariff
filing  under AS 42.06.400, which would enable them to object  to
it.  They were also told that each filing would be subject to any
standards  and procedures that it would have been subject  to  if
the  Settlement had not been approved. This information put  them
on  notice that the Commission could set a deadline for  protests
under  3  AAC  48.290(a).  Then, as required by 3 AAC  48.290(a),
each  time  the  Carriers filed a rate the  Commission  gave  the
Shippers notice of the rate and specified a deadline for comments
and  petitions.   It is highly unlikely that the  Shippers  could
have  misunderstood the requirement that they object to the rates
in  a  timely manner in order to ensure that the Commission would
adjudicate  the  question  of whether the  rates  were  just  and
reasonable.   In fact, in 1996 they did timely protest  that  the
1997  rates  were  unjust and unreasonable.   As  the  Commission
points  out,  Tesoros timely protest of the 1997  rates  confirms
that Tesoro was fully aware of the requirement of filing a timely
protest  in  order to challenge TSM rates on grounds  other  than
whether they were correctly calculated under TSM.  We agree,  and
thus  uphold the Commissions decision that the Shippers challenge
to the 19941996 rates was untimely.
          3.   Concerns  similar  to  those underlying  the  rule
               against  retroactive ratemaking provide additional
               support for the Commissions decision.
               
          In Order 68, the Commission found that:
          [Order  41]  is not a procedural  order.   In
          that  order [the Commission] found  that  TSM
          was   an   acceptable  method  to   calculate
          intrastate  rates  for  1986  to  1996.    It
          accepted   the   filed   rates   subject   to
          verification   that   they   were   correctly
          calculated.   Shippers  had  the   right   to
          challenge any rate calculated under TSM.  The
          particular  shippers who  now  challenge  the
          rates  have  had full knowledge of  TSM,  the
          methodology  used to calculate  their  rates,
          and  all  its provisions, during  the  entire
          period   at   issue.  .  .  .  Fairness   and
          confidence  in  the regulatory  process  both
          require  that  we  not  disturb  [Order   41]
          without good cause.
          
This reasoning alludes to prudential concerns.  In its brief, the
Commission  points to the rationale underlying the  rule  against
retroactive ratemaking as support for its finding.  As we pointed
out  in  Matanuska  Electric Assn v. Chugach Electric  Assn,  [a]
fundamental  rule  of  ratemaking is that rates  are  exclusively
prospective in nature.41  This rule is critical for a utility  to
plan  its  finances.  Other purposes for prohibiting  retroactive
rates include investor confidence, utility credit rating, and the
integrity of service.  And retroactivity, even where permissible,
is  not  favored,  except  upon the  clearest  mandate.42   These
concerns provide policy support for Order 68.
          The   Commissions   regulations  and   orders   clearly
communicated  the  need to protest rates and  the  deadlines  for
protests  and petitions to intervene.  The Shippers have provided
no  good  reason  for why they waited until 2003 to  protest  the
rates.   Based  on  the  analysis above,  the  Commission  had  a
reasonable basis for denying the Shippers protests and  petitions
to  intervene between 1986 and 1996.43  We therefore uphold Order
68.
     C.   The Shippers Other Arguments Are Unpersuasive.
          The Shippers make several other arguments which we deal
with briefly below.
          The  Shippers  argue that AS 42.06.400(b) requires  the
Commission to hold a hearing and complete its investigation prior
to  vacating an order suspending rates. Subsection .400(b) states
that:
          An  order suspending a tariff filing  may  be
          vacated   if,   after   investigation,    the
          commission  finds that it is in all  respects
          proper.  Otherwise the commission shall  hold
          a  hearing on the suspended filing and  issue
          its  order,  before the end of the suspension
          hearing,  granting, denying or modifying  the
          suspended tariff in whole or in part.
          
The Shippers argue that because there was no investigation, there
could be no finding that the rates were proper.  They argue  that
this  Court should reverse and remand this decision on this point
alone.  However, there is nothing in the statute suggesting  that
the Commission cannot, pursuant to its investigation, find a rate
to  be  in  all  respects  proper because  it  is  made  under  a
settlement  approved by the Commission.  As  with  the  arguments
discussed  in Section A above, to find otherwise would mean  that
the  Commission  could  never accept a settlement  without  first
adjudicating rates.
          The   Shippers   also  argue  that   [t]he   Commission
wrongfully concluded that Williams and Tesoro were not parties in
Docket  P-86-2.  However, the Commission did not base its finding
on  the party status of the Shippers.  Rather it relied upon  the
untimeliness of their requests.
          The  Shippers  emphasize the fact that  all  rates  for
19861996  were  protested  by  one or  more  interested  parties.
However,  they  do not point to a single instance in  which  they
protested a rate between 19861996.  They cannot rely on the  fact
that other parties, such as the Commission staff, Petro Star,  or
the Alaska Public Interest Research Group, protested the rates.44
They did not invest the significant costs involved in undertaking
rate  litigation.   While they might hope  that  the  efforts  of
others  will be successful, they cannot initiate an investigation
years after the other efforts fail on the basis that they did not
have to timely protest because others did.
          The   Shippers  also  suggest  in  passing   that   the
Commission erred by accepting the filed rates without determining
whether they were correctly calculated under TSM.  The Commission
scheduled a prehearing conference in Docket P-82-2 for  March  6,
2003,  to determine whether any party still believed it necessary
to  verify  TSM calculations and inputs.  In the days immediately
prior  to  the  hearing, the Shippers filed  their  protests  and
petitions to intervene.  These filings did not protest  that  the
rates  were not calculated in compliance with TSM.  The  Shippers
were  on  notice that the rates were going to be approved  if  no
party requested a formal verification of the TSM calculations and
inputs,  but they did not request this verification.  On  May  6,
2003,  the Commission gave notice that it was going to  deny  the
Shippers  protests and petitions to intervene, and  on  June  23,
2003,  the  Commission issued Order 68 stating its decisions  and
more  fully  explaining them.  This order  also  stated  that  it
approved the unchallenged intrastate TAPS rates [for 19861996] as
permanent rates.  The rates were then formally established  in  a
subsequent  order.45  Because the Shippers  did  not  express  an
interest  in  verifying  TSM calculations  and  inputs  in  their
filings  and  they had notice that the rates would be established
as final if no one requested verification of the TSM calculations
and   inputs,  the  Commission  was  within  the  bounds  of  its
discretion when it decided not to conduct a further investigation
of whether the 19861996 rates complied with TSM and approved them
          as permanent rates in Order 68.
          Finally, the Shippers argue that the Commission  failed
to   resolve  crucial  regulatory  issues  that  could  lead   to
inconsistent  results.  However, these arguments miss  the  basic
point:   the  Commission  accepted  the  rates  pursuant   to   a
Settlement.   The  rates therefore do not need to  be  consistent
with  the  rates that were determined as a result of adjudication
following a timely protest.
V.   CONCLUSION
          The  Shippers  claim that the Commission must  complete
every  rate investigation that it initiates and therefore has  no
ability to accept a settlement.  This claim has no support in the
statutes, case law, or regulations.  We decline to reverse  Order
68 on the basis of this argument.
          The  Shippers  claim that their petitions to  intervene
and  protest  were  timely  is  also  unpersuasive.   Tesoro  and
Williams  (then MAPCO) could have timely petitioned to  intervene
in  Petro  Stars protest in 1987.  They could have protested  the
temporary  rates  filed between 1986 and 1993.  They  could  have
tried to intervene in Petro Stars case any time between 1986  and
1991, when Petro Star and the Carriers submitted a Settlement  to
the  Commission for approval.  They could have tried to intervene
after  Petro Star submitted the Petro Star Settlement and  before
the Commission approved it in Order 41, which was issued in 1993.
They  could have submitted a motion to reconsider Order 41.  They
could  have objected to the 19861993 rates in response  to  Order
41.   They  could have timely protested the 19941996 rates  after
they were sent notices of rates filings containing deadlines  for
protesting.  They even could have tried to object to the 19861996
rates  when they timely protested the 1997 rates.  They did  none
of  these  things.  A review of the record as a whole shows  that
the  Shippers  had ample notice and opportunity  to  protest  the
rates but failed to do so.  The Commission had a reasonable basis
for denying their 2003 protests as untimely.
          Accordingly, we REVERSE the order of the superior court
of June 7, 2006, and REMAND this case with instructions to affirm
Commission Order 68.
_______________________________
     1      The  Alaska  Public  Utilities  Commission  was   the
predecessor  to  the Regulatory Commission of  Alaska.   In  this
opinion, both entities are referred to as the Commission.

     2     In re Amerada Hess Pipeline Corp., Order P-97-004(151)
(Order  151) at endnote 2, at 5 (Regulatory Commn of Alaska  Nov.
27,               2002),               available               at
http://www.state.ak.us/rca/orders/pipeline/1997/p97004_151.pdf
(giving   an  overview  of  TAPS  rate  litigation).   The   rate
litigation  before  the  Commission  only  concerned  rates   for
intrastate  shipments  of  oil, which constitute  less  than  ten
percent  of the oil that goes through the pipeline.   Id.  at  2.
The  Federal  Energy Regulatory Commission (FERC)  regulates  the
rest of the oil throughput as interstate commerce.  Id.

          There  was prolonged federal rate litigation  prior  to
1986  as well, id. at endnote 2, at 3-5, which was resolved  when
FERC  approved an Interstate Settlement Agreement in  1985.   The
Intrastate Settlement was modeled after the Interstate Settlement
and  set the same rates and rate ceilings as those for interstate
oil shipments.

     3     At  that  time  Williams was  known  as  MAPCO  Alaska
Petroleum.

     4    The Commission  noted that it could not sever the Petro
Star  complaint and approve the Settlement only as to  the  other
shippers,  since treating similarly situated shippers differently
raises the spectre of undue discrimination under AS 42.06.380.

     5     Petro  Star  was  also  party  to  federal  and  state
proceedings  challenging  the  inclusion  of  costs  related   to
corrosion.   Under the terms of the Petro Star Settlement,  Petro
Star agreed to withdraw from all three proceedings in return  for
$2,500,000.

     6     Technically,  the Commission accepted the  Petro  Star
Settlement  in  Order  40.  Order 41  contained  the  Commissions
findings and conclusions regarding that acceptance.

     7    Tesoro and Williams are collectively referred to as the
Shippers in this opinion.

     8     These rates were also suspended solely for the purpose
of determining if they were correctly calculated under TSM.

     9    Order 151 at 8, 42, 131.

     10     They  made no challenge to the accuracy  of  the  TSM
calculations.

     11    This opinion refers to the arguments in the petitioners
brief  as the Commissions arguments, but it should be noted  that
the  brief  actually encompasses the arguments on appeal  of  the
Commission, the Carriers, and the State.

     12     Cook Inlet Pipe Line Co. v. Alaska Pub. Utils. Commn,
836  P.2d 343, 348 (Alaska 1992); Jager v. State, 537 P.2d  1100,
1106 (Alaska 1975).

     13    AS 42.06.480(a).

     14     537 P.2d at 1107 (citing Kelly v. Zamarello, 486 P.2d
906, 916-17 (Alaska 1971)).

     15     Cook Inlet Pipe Line Co., 836 P.2d at 348 (quotations
omitted).

     16    McMullen v. Bell, 128 P.3d 186, 190 (Alaska 2006).

     17    Stoshs I/M v. Fairbanks N. Star Borough, 12 P.3d 1180,
1183 (Alaska 2000) (citation and quotations omitted).

     18    832 F.2d 158 (D.C. Cir. 1987).

     19    Id. at 163.

     20    Id.

     21    Id. at 164 (citing 18 C.F.R.  385.602(h)(1)(ii)(B)).

     22    Id. at 165.

     23    537 P.2d 1100 (Alaska 1975).

     24    Id. at 1104.

     25    Id. at 1105.

     26    Id. at 1111.

     27    Id. at 1106 (citation omitted).

     28     Quoting Interior Credit Bureau v. Bussing,  559  P.2d
104, 106 (Alaska 1977) (citation omitted).

     29     A  protest occurs when an entity directly protests  a
rate  filing by the carriers. A petition to intervene occurs when
an  entity  tries to join in an existing rate protest.   In  2003
Tesoro filed both a protest and a petition to intervene.

     30    Stoshs I/M v. Fairbanks N. Star Borough, 12 P.3d 1180,
1183 (Alaska 2000) (citation and quotation omitted).

     31     Cook Inlet Pipe Line Co. v. Alaska Pub. Utils. Commn,
836 P.2d 343, 348 (Alaska 1992) (quotation omitted).

     32    3 AAC 48.110(b)(7).

     33     The  Commission suspended 1986 rates after  July  11,
1986,  and continued to suspend them up until it issued Order  41
in  1993.  Order 41 therefore covered rates for all of the  years
from 19861993.

     34    The Shippers argue that they filed a timely petition to
intervene  because a prehearing conference was held on  March  6,
2003.  But 3 AAC 48.110(d) requires a petition to intervene to be
filed  before the first prehearing conference.  (Emphasis added.)
The  first  conference  was  the 1987 conference,  not  the  2003
conference.

     35    The time period from 1991 to 1993 corresponds with the
time  period  between Petro Star and the Carriers submitting  the
settlement  agreement  to the Commission  for  approval  and  the
Commission accepting the agreement in Order 41.

     36     In fact, in 1991 Williams (then MAPCO) unsuccessfully
tried  to  intervene   in Petro Stars protest  of  the  corrosion
costs.  In explaining its denial of the intervention attempt, the
Commission noted the following:

               The  existence of Petro Stars  challenge
          of  TAPS  rates  on three fronts  created  in
          other    shippers,   including   MAPCO,    an
          expectancy   that,   if   Petro   Star   were
          successful on any of those fronts, they would
          receive  a  reduction in rates  identical  to
          that  received by Petro Star.  In  order  for
          that  expectancy to come to fruition, it  was
          necessary   for  Petro  Star  to  engage   in
          expensive and complicated litigation in which
          other shippers were not participating and for
          which  they  were not paying (except  through
          funding  legal expenses of the TAPS  Carriers
          under TSM).
          
               Petro Star could have, unilaterally, for
          any  reason, withdrawn from some  or  all  of
          this  litigation.  It was under no obligation
          to   anyone,  other  shippers  included,   to
          continue the litigation.
          
     37     Williams argued that it did not intervene earlier  in
the  proceedings because it only learned that certain projections
in  the 1986 settlement offer provided by the TAPS Carriers  were
incorrect  during hearings on Docket P-97-4.  We agree  with  the
Commission  that  Williamss allegations  did  not  provide  clear
evidence of misleading information.  In addition, Williams  chose
to file pleadings in support of the settlement agreement in order
to expedite payment to itself of intrastate refunds without first
conducting an investigation of the settlement.  Williams does not
explain why this business decision should provide it with a  good
cause  excuse for its failure to confirm the information provided
to it by the TAPS Carriers and the State of Alaska.

     38     Tesoro  also  argues that it did timely  petition  to
intervene  since  it  had  six pending,  unopposed  petitions  to
intervene  before  the prehearing conference  in  1987.  However,
Tesoro withdrew those petitions pursuant to an agreement with the
Carriers.

     39    3 AAC 48.110(b)(7).

     40     Between  1993  and 1996 the Commission  continued  to
suspend rates solely for the purpose of determining whether  they
were correctly calculated under TSM.

     41    53 P.3d 578, 583 (Alaska 2002) (quotations omitted).

     42    Id. (quotations and citations omitted).

     43    The Shippers due process claim is rejected for the same
reason  that  Order 68 is upheld. As described  in  the  analysis
above, the Shippers had notice and an opportunity to be heard.

     44     The Shippers also point to the fact that in Order 14,
the  Commission  declared  that  the  Commission  Staff  was   an
appropriate  and  independent  competent  party  to  protest  all
present  and  prospective rates on behalf of the future  shipping
public.  .  . .  They argue that the Commission abruptly  changed
course in Order 41 when it held that the staffs protests were not
sufficient  to stop it from accepting the Settlement because  the
staff was not an economically impacted party.

          There are two problems with this argument.  First,  the
Commission  did  not change course.  In Order 14  the  Commission
accepted  the  Settlement  over the opposition  of  some  parties
because  those parties have not presented sufficient argument  or
evidence  to  convince  the Commission  that  acceptance  of  the
settlement  rates  .  .  . is contrary to  the  public  interest.
Similarly, in Order 41 the Commission accepted the Settlement  as
applied to rates after July 10, 1986, over the arguments  of  its
staff, explicitly comparing its action with the decision it  made
in  Order  14.   The Commission stated that the opposing  parties
have  not  demonstrated any plausible reason why  the  Commission
should  mandate litigation of rates . . . without protest by  any
ratepayer  . . . . Under these circumstances the public  interest
does  not  require  that  this  proceeding  be  continued.    The
Commission  never  stated  that it was  bound  to  continue  rate
litigation  based on the objection of its staff if the Commission
determined that doing so was not in the public interest.

          Second,   as  with  many  of  the  Shippers   arguments
concerning  Order  41,  even if it did have  merit  it  does  not
explain  why  they did not protest the rates for the years  after
1993, when Order 41 was issued, until 2003.

     45     In re Amerada Hess Pipeline Corp., Order P-86-002(69)
(Regulatory   Commn  of  Alaska  Feb.  9,  2004),  available   at
http://www.state.ak.us/rca/orders/pipeline/1996/p86002_69.pdf.

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