Anadarko Petroleum Corporation and Tesoro Alaska Company re-filing of Public and Confidential Versions of Supplemental Testimony and Supplemental Reply Testimony, originally filed on May 4, 2012, and June 19, 2012 under IS09-348, et al.
09/26/2012AT-286 Page 2 of 216 TABLE OF CONTENTS I. PROCEDURAL BACKGROUND ..................................................................................1 fl. LEGAL STANDARDS ..............................................................................................7 A. Taxation Authority ..................................................................................................? B. Standard of Review and Burden of Proof.. ............................................................. 9 C. History of Ad Valorem Tax Assessments ofTAPS ............................................... 11 Ill. DESCRIPTION OF THE PROPERTY ..................................................................... 19 A. Ownership ............................................................................................................ 19 B. Physical Description .............................................................................................20 C. Original Construction and Strategic Reconfiguration ............................................ 20 D. Limited-Market Property ....................................................................................... 23 E. Special-Purpose Property .................................................................................... .23 F. Integrated Economics ...........................................................................................23 G. Unique Regulatory Status ..................................................................................... 26 IV. PREMISE OF VALUE .............................................................................................27 V. THE OWNERS' MAINTENANCE OF TAPS' CAPACITY OF 1.1 MILLION BBLID WITH UPWARD SCALABILITY TO 2.1 MILLION BBLID ......................................43 VI. CHOICE OF VALUATION METHOD ......................................................................49 VII. THE COST APPROACH ...................................................................... ,................. 53 A. Replacement Cost New ........................................................................................54 1. A Summary of the Cost Studies ....................................................................... 55 2. The Stantec Hypothetical Pipeline Is Not an Acceptable Comparison Property to TAPS for Ad Valorem Tax Purposes ............................................................ 59 a. Legal Restrictions .........................................................................................61 b. The Stantec Design Is Not of Similar Quality and Like Utility ....................... 63 c. Appraisal Theory ..........................................................................................73 d. The Stantec Design Is Unproven and Unknown ........................................... 76 e. The Stantec Design Does Not Capture All Costs ......................................... 80 BP Pipelines, et al. v. State. et al., 3AN-06-08446 Cl Decision Following Trial de Novo- 2007, 2008, 2009 Assessed Valuat