Mid- Amercia Pipe Co LLC submits FERC 36 which cancels FERC 32 under IS05-156.

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION Trans Alaska Pipeline System, et al. ) Docket Nos. OR89-2-017, et al. THE STATE OF ALASKA BEFORE THE REGULATORY COMMISSION OF ALASKA Trans Alaska Pipeline System ) Docket Nos. P-89-2, et al. Quality Bank Proceedings ) Consolidated BRIEF OF EXXON MOBIL CORPORATION AND TESORO ALASKA COMPANY OPPOSING EXCEPTIONS TO INITIAL DECISION ON RESID VALUATION, HEAVY DISTILLATE VALUATION, VGO VALUATION, AND REFUNDS (ISSUES 1, 2, 4 AND 5) Robert H. Benna Eugene R. Elrod Jeffrey G. DiSciullo James F. Bendernagel, Jr. Wright & Talisman, P.C. Ronald S. Flagg 1200 G Street, N.W., Suite 600 C. John Buresh Washington, D.C. 20005 Kurt H. Jacobs (202) 393-1200 Sidley Austin Brown & Wood LLP 1501 K Street, N.W. Attorneys for Tesoro Alaska Company Washington, D.C. 20005 (202) 736-8000 Robert W. Johnson R. Bryant Siddoway Law Department ExxonMobil Production Company, a division of Exxon Mobil Corporation 800 Bell Street Houston, TX 77002 (713) 656-5286 Attorneys for Exxon Mobil Corporation February 1, 2005 TABLE OF CONTENTS Page TABLE OF CONTENTS................................................................................................................. i TABLE OF AUTHORITIES ....................................................................................................... viii SUMMARY OF ARGUMENT OPPOSING EXCEPTIONS .........................................................2 LIST OF EXCEPTIONS OPPOSED...............................................................................................7 ARGUMENT...................................................................................................................................9 ISSUE NO. 1: RESID VALUATION ............................................................................................9 I. THE EIGHT PARTIES EXCEPTIONS TO THE ALJS FINDINGS REGARDING THE BEFORE-COST VALUE OF THE RESID ARE WITHOUT MERIT. ..............................................................................................................................15 A. The ALJs Decision That Five Assays Should Be Averaged To Determine The Before-Cost Value Of The ANS Resid Is Strongly Supported By The Evidence.................................................................................................................15 B. The ALJs Decision That The FOB Vessel Price For Coke Must Be Adjusted For The Substantial Transportation And Handling Costs That Must Be Incurred By The Refiner To Move The Coke From The Refinery To The Vessel In Order To Reflect The Value Of The Coke To The Refiner Is Strongly Supported By The Evidence...................................................20 1. The Proposed Adjustment Would Not Create Inconsistencies Between The Valuation of Coke And The Valuation Of The Other Coker Products, While The Failure To Make An Adjustment Would Perpetuate Inconsistency................................................................23 2. The ALJs Determ