Texas Pipeline Regulators Side with Eastman in Pipeline Rate Dispute

Texas oil and gas commissioners closed a three-year dispute on Wednesday by ruling that Westlake Chemical cannot charge Eastman Chemical a free-market rate for use of its Texas pipeline.

The dispute began when Eastman Chemical filed a complaint with the Railroad Commission of Texas after Westlake Chemical began to charge Eastman double its rate in 2013, from $1.90 per 100 pounds to $3.50. The Railroad Commission voted 2-1 on Wednesday to set the rate to $2.45 per 100 pounds.

In the midst of the dispute the last three years, several industry leaders had been watching to see if the commission would allow Westlake to set a market rate, which is not yet allowed.

Eastman Chemical proposed a rate of $1.67 per 100 pounds, but the ruling came to $2.45 per 100 pounds, which two of the three commissioners agreed on. Commissioner David Porter had proposed a $1.55 rate.

Although Commissioner Ryan Sitton had voted for the rate of $2.45, he said the case was a missed opportunity “to begin the process of setting market-based rates for common carrier pipelines."

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