December 19, 2018 / 6:59 PM / a year ago

Colonial shipper says halting incentive program would cost $550,000

NEW YORK, Dec 19 (Reuters) - Total Specialties USA Inc. (TSUSA), a refined products shipper on Colonial Pipeline, claimed the pipeline operator's termination of an incentive program would cost it $550,000 in the first half of 2019, according to a letter to regulators.

In late November, Colonial Pipeline Co said it planned to discontinue a program that allowed shippers who delivered a minimum volume to various destinations along the pipeline route to be eligible for certain rate incentives.

Shippers that received these incentive rates in the past would begin paying existing base rates instead. The plan has to be approved by the U.S. Federal Energy Regulatory Commission.

Cancelling the program would add about $550,000 in additional costs in the first six months of 2019, TSUSA said in a letter to FERC on Dec. 14, asking the agency not to approve Colonial's request.

Colonial, in a letter to FERC on Tuesday, responded that it is not proposing new tariff rates, only eliminating discounted incentive rates, in line with FERC precedent.

Colonial Pipeline connects Gulf Coast refineries with markets across the southern and eastern United States through more than 5,500 miles (8,851 km) of pipelines. (Reporting by Stephanie Kelly Editing by Chizu Nomiyama)

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