Answer of NuStar Logistics, L.P. to Protest of Valero Marketing and Supply Co under IS12-314.

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION NuStar Logistics, L.P. ) Docket No. IS12-314-000 RESPONSE OF NUSTAR LOGISTICS, L.P. TO PROTEST Pursuant to Rule 213 of the Rules of Practice and Procedure of the Federal Energy Regulatory Commission (Commission), 18 C.F.R. 385.213, and to 18 C.F.R. 343.3(b), NuStar Logistics, L.P. (NuStar) respectfully submits its Response to the Motion to Intervene and Protest of Valero Marketing and Supply Company, filed on June 13, 2012 in the above- captioned docket (Protest). NuStar requests that the Commission dismiss the Protest and deny the relief requested by Valero Marketing and Supply Company (Valero), for the reasons set forth in detail below. Valeros challenge to NuStars indexed rate increases is premised on a selective and mistaken reading of the Commissions policy regarding challenges to indexed rates, as well as on an inaccurate assessment of NuStars accounting treatment of its non-transportation revenues. The Commission should follow its rule of reviewing an index filing in light of the Page 700, rather than engage in this setting in complex revisions to the Page 700 data. Moreover, the adjustments sought by Valero would be inaccurate and contrary to accepted Commission accounting. NuStars index filing should also be viewed in light of its years-long decline in volumes. Valeros requests for rejection, suspension or for re-examination after the re-filing of the Form 6, should all be denied. Attached to this Response as Attachment A is the Affidavit of Matthew Petersen (Petersen Affidavit), addressing the appropriate accounting and regulatory treatment of the revenues that are the subject of the Protest, as well as other relevant facts. I. Background: the Tariff Filing and the Protest. In its May 29, 2012 filing in this proceeding, submitting proposed increases to its current rates on file with the Commission based on the index published by the Commission on May 15, 2012, and supporting that increase by a schedule demonstrating that each rate increase was at or below the ceiling level of the rate, in accordance with the Commissions ceiling regulations. In addition, the tariffs contained some minor administrative changes.1 Valeros Protest does not contest the accuracy of NuStars indexed rate calculations. Valero does not maintain that any of the increased rates would exceed the applicable ceiling level as of July 1, 2012. Instead, Valero argues the following: The Commissions test for determining whether an index filing is subject to challenge by a protesting party is whether it would result in ...