Request for Rehearing of Century Exploration New Orleans, LLC, et. al. under CP12-4, et. al..

UNITED STATES OF AMERICA BEFORE THE FEDERAL ENERGY REGULATORY COMMISSION NuStar Logistics, L.P. ) Docket No. IS12-503-000 RESPONSE OF NUSTAR LOGISTICS, L.P. TO PROTEST OF VALERO MARKETING AND SUPPLY COMPANY 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 July 20, 2012 in the above- captioned docket (Protest).1 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. In sum, the Commission should accept the tariff filing at issue in light of the following: NuStars tariff filing results in increased rates that fall below the 9.88% test recently adopted in another proceeding: the percentage change in costs in the most recent Page 700 (-1.56%), when added to the percentage increase being chosen under the index ceiling (approximately 8.3%), results in a percentage of 9.85%, which is below the 9.88% bright-line threshold enunciated in the June 29 SFPP Order.2 Valero does not contest that NuStar meets standard established in the June 29 SFPP Order. 1 The Valero Protest was also filed in Docket No. IS12-502-000; however, that proceeding was terminated on July 5, 2012 when NuStar withdrew F.E.R.C. Nos. 65.8.0, 66.5.0, 68.4.0, 70.6.0, 73.5.0 and 74.5.0 pursuant to 18 C.F.R. 341.13. 2 SFPP, L.P., 139 FERC 61,267 (2012)(June 29 SFPP Order). Valero raises a number of arguments regarding the calculation of costs in NuStars Page 700 for 2012; NuStar attaches the Affidavit of Matthew Petersen,3 which disproves these claims, but the Commission need not even address these disputed issues. Contrary to Valeros assertions, Order No. 5614 did not contemplate barring pipelines from receiving an index increase if they succeeded in reducing costs, and the Commissions orders since Order No. 561 do not support Valeros claim. Valeros only proposed alternative test blanket denial of any increase to pipelines that reduced costs would punish efficiency and thus discourage it, while failing to achieve the goals of Order No. 561 and EPAct of 1992.5 The Commissions bright line of 10% is neither unsupported nor arbitrary, and in any case Valero ignores the fact that acceptance of an index filing does not insulate the rate from challenge via a complaint. I. PERTINENT BACKGROUND. This proceeding is a reprise, under significantly different facts, of NuStars index filing ...