Request for Rehearing of Allegheny Defense Project, et. al. of the November 19, 2015 Order under CP14-555.

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Osage Pipe Line Company, LLC ) Docket No. OR15-8-000 REPLY AFFIDAVIT OF DR. GEORGE R. SCHINK March 31, 2015 TABLE OF CONTENTS I. INTRODUCTION..............................................................................................................1 II. PURPOSE OF THIS AFFIDAVIT...................................................................................1 III. SUMMARY DISCUSSION OF CONCLUSIONS REGARDING DR. ARTHURS CRITICISMS OF THE OSAGE APPLICATION ...................................2 A. OVERVIEW OF DR. ARTHURS INCORRECT CLAIMS ..................................2 B. DR. ARTHURS INCORRECT CLAIMS REGARDING OSAGES PRODUCT MARKET DEFINITION .....................................................................4 C. DR. ARTHURS INCORRECT CLAIMS REGARDING OSAGES ORIGIN MARKET .................................................................................................................5 D. DR. ARTHURS INCORRECT CLAIMS REGARDING OSAGES DESTINATION MARKET .....................................................................................9 1. Geographic Market Definition And Identification of the Currently Active Good Alternatives ............................................................................9 2. Definition of the Competitive Price ...........................................................12 3. New Entry ..................................................................................................13 4. Osages Competitive Tariff Rate Estimate ................................................14 5. Osages Delivery Volume to Hollyfrontiers El Dorado Refinery ............16 IV. DETAILED DISCUSSION OF SELECTED INCORRECT CLAIMS BY DR. ARTHUR ..........................................................................................................................17 A. DR. ARTHURS MISREPRESENTATION OF THE ROLE OF THE CROSS ELASTICITY OF DEMAND ..................................................................17 B. DR. ARTHURS INCORRECT CLAIM THAT OSAGES PRODUCT MARKET IS NOT PROPERLY DEFINED .........................................................20 C. DR. ARTHURS INCORRECT CLAIM THAT OSAGES DESTINATION MARKET IS NOT PROPERLY DEFINED .........................................................24 1. Osages Destination Market Is Properly Defined in the Osage Application.................................................................................................24 i TABLE OF CONTENTS (Cont.) Section Page 2. Dr. Arthurs Improper Definition of the Osage Destination Market As Osages El Dorado Delivery Point.............................................................28 3. Dr. Arthurs Improper Excuse for Excluding the Alternatives Available to NCRA ....................................................................................32 4. Dr. Arthurs Improper Omission of Destination Market Competitive Alternatives .................................................