Section 11.25.130. Location differentials.

	(a)  The commissioner will establish location differentials to  
		(1) calculate the destination value of qualified gas at a destination upstream of a first destination market; or  
		(2) calculate the destination value of a gas plant product or component other than methane in a first destination market if a published price for that gas plant product or component is not available or is not reliable.  
	(b)  To establish a location differential, the commissioner will consider  
		(1) the difference between a reliable published price for residue gas or a gas plant product in a market with a reliable published price and the price paid for residue gas, a gas plant product, or unprocessed gas in the market without a reliable published price;  
		(2) the cost of transportation between the market with a reliable published price and the market without a reliable published price;  
		(3) other factors relevant to differences in value that result from the market location.  
	(c)  The commissioner will give notice of location differentials established under this section by posting a list on the department's website. The commissioner may add to, replace, or remove entries on the list of location differentials by posting a revised list of location differentials on the department's website at least 15 days before the first day of a royalty reporting period affected by the action. A location differential posted by the commissioner to the department's website under this section is not subject to retroactive change.  
	(d)  If the commissioner is notified in writing at least three months before a first shipment that a lessee or its affiliate will transport qualified gas to a destination upstream of a first destination market, the commissioner will post a location differential for that destination on the department's website at least 15 days before the first day of a royalty reporting period affected by the posting.  
	(e)  If the commissioner is not notified in writing at least three months before a first shipment that a lessee or its affiliate will transport qualified gas to a destination, and the commissioner has not posted a location differential for the destination on the department's website, the destination value and location differential for that destination may be adjusted by the commissioner based on the criteria for destination value set out in this chapter and the criteria for location differentials set out in this section. An adjustment under this subsection is retroactive to the date of first shipment.  

Authorities

38.05.020;38.05.180;43.90.310

Notes

Reference

11 AAC 25.060
11 AAC 25.100
11 AAC 25.120
11 AAC 25.310

Authority

AS 38.05.020 AS 38.05.180 AS 43.90.310

History

Eff. 5/29/2010, Register 194