PUBLIC VERSION - CONFIDENTIAL PROTECTED MATERIALS REMOVED
Exhibit No. AIR-93
UNITED STATES OF AMERICA
BEFORE THE
FEDERAL ENERGY REGULATORY COMMISSION
Delta Air Lines, Inc., )
Continental Airlines, Inc., )
JetBlue Airways Corporation, )
United Air Lines, Inc., and )
US Airways, Inc. ) Docket No. OR12-28-001
)
v. )
Buckeye Pipe Line Company, L.P. )
PREPARED REBUTTAL TESTIMONY OF DANIEL S. ARTHUR
January 27, 2015
Exhibit No. AIR-93
SUMMARY OF PREPARED REBUTTAL TESTIMONY OF
DANIEL S. ARTHUR
Dr. Arthur is a Principal of The Brattle Group, an economic and management consulting
firm. The purpose of Dr. Arthurs rebuttal testimony is to assess and respond to Buckeye and
FERC Staff witnesses conclusions regarding (1) whether it is reasonable to calculate a cost
of service for a system that includes the rates to the New York City destinations at issue in
the proceeding based on a Long Island System as defined by Buckeye, or on the basis of an
Eastern Products System (including the Long Island System) as Buckeye recommended in
its prior rate proceeding before the Commission, (2) a reasonable allocation of common
origin costs between the Long Island System and the Eastern Products System (excluding the
Long Island System) if the Long Island System is to be broken out from the remaining
Eastern Products System, (3) a reasonable allocation of parent entity common costs to
Buckeye, and a reasonable allocation of Buckeyes common costs to Buckeyes individual
systems, (4) whether a test period adjustment for fuel and power expenses related to the
expiration of a natural gas credit program is reasonable, (5) which legal expenses are
reasonable to include in a surcharge created pursuant to this proceeding, (6) a reasonable
incorporation of oil losses and shortages expenses and revenues into Buckeyes cost of
service, (7) the calculation of costs of service for Buckeyes individual systems for a 2011
Complaint Period and a 2011 Test Period, and (8) the method for evaluating, and the degree
of change in, Buckeyes realized return on equity for purposes of evaluating whether there
has been a substantial change in the economic circumstances regarding any grandfathered
rates.
As a result of Dr. Arthurs analysis, he concludes that Buckeyes proposal to use calendar-
year 2012 data to set going forward rates is not consistent with Commission precedent.
Rather, Dr. Arthur concludes that calendar-year 2011 data is reasonable to use for a 2011
Complaint period. Calendar year 2011 data, with relevant test period adjustments for known
and measurable changes, should also be the test period for establishing going-forward rates
...
For complete details, download the full document: Download