TransCanada Keystone Pipeline, LP submits tariff filing per 342.2 or 342.4: TransCanada Keystone FERC 6.17.0 to be effective 6/1/2015 under IS15-264 Filing Type : 830
04/28/2015PUBLIC VERSION HIGHLY CONFIDENTIAL PROTECTED MATERIALS REDACTED Exhibit No. BPL-1 Page 1 of 115 1 UNITED STATES OF AMERICA 2 BEFORE THE 3 FEDERAL ENERGY REGULATORY COMMISSION 4 5 Guttman Energy, Inc. d/b/a ) Guttman Oil Company, and ) PBF Holding Company LLC, ) ) Complainants, ) ) ) v. ) Docket No. OR14-4-000 ) OR14-4-001 ) Buckeye Pipe Line Company, ) L.P. and ) Laurel Pipe Line Company, L.P., ) ) Respondents ) 6 7 8 ANSWERING TESTIMONY 9 OF 10 DR. GEORGE R. SCHINK 11 ON BEHALF OF 12 BUCKEYE PIPE LINE COMPANY, L.P. 13 14 15 16 17 18 19 20 21 22 January 20, 2015 PUBLIC VERSION HIGHLY CONFIDENTIAL PROTECTED MATERIALS REDACTED Exhibit No. BPL-1 Page 2 of 115 1 TABLE OF CONTENTS 2 3 Section Page 4 I. IDENTITY AND QUALIFICATIONS ........................................................................... 5 5 II. PURPOSE, SUMMARY, AND ORGANIZATION OF MY TESTIMONY ............... 8 6 A. Purpose....................................................................................................................... 8 7 B. Summary of the Results of My Analyses .................................................................. 9 8 1. Buckeyes Pittsburgh and Harrisburg Destination Markets.............................. 9 9 2. Buckeyes Philadelphia Origin Market ........................................................... 11 10 a. Dr. Arthurs Definition of Buckeyes Philadelphia Origin Market ........... 11 11 i. Dr. Arthurs Error in Calculating the HHI for His Definition of 12 the Philadelphia Origin Market ............................................................ 12 13 ii. Dr. Arthurs Omission of Crucial Procompetitive Factors in 14 His Philadelphia Origin Market .......................................................... 16 15 b. My Definition of the Philadelphia Origin Market ..................................... 20 16 C. Organization ............................................................................................................. 21 17 III. BACKGROUND AND OVERVIEW OF DR. ARTHURS TESTIMONY .............. 24 18 A. The Complaint and the Commission Order Establishing a Hearing ........................ 24 19 B. Overview of Dr. Arthurs Testimony and Its Numerous Errors .............................. 27 20 IV. THE COMMISSIONS COMPETITIVENESS STANDARD FOR AN OIL 21 PIPELINE TO BE ALLOWED TO CHARGE MARKET-BASED RATES ........... 30 22 V. MARKET CONDITION CHANGES SINCE BUCKEYE OBTAINED 23 MARKET-BASED RATES AND THE COMPETITIVENESS 24 IMPLICATIONS OF THESE CHANGES................................................................... 34 25 A. Introduction .............................................................................................................. 34 26 B. Overview .................................................................................................................. 35 27 C. Buckeyes Pittsburgh Area and Harrisburg Area Destination Markets ................... 38 28 1. The HHI Analyses that the Commission Relied on in Its Buckeye 29 1990 Order ............